Sep 15, 2017 - Market Update (US inflation surprise making Dec Fed hike a 50/50 game, Weidmann like Draghi...eyeing his job?, Oil above USD 50 a stability for US shale, GBPUSD up to 1.3500, but weak USD can push it to 1.4000 despite heavy short specs, Trump trade making US small caps rally)

Short recap

Asian in red on NoKo playing with fire again but market corrected quickly

Europe opening mixed

ECB’s Weidmann out with comments like Draghi…getting ready for his job?

Aug US inflation at 1.9%, core 1.7%, higher than expected

Bringing Dec Fed hike to 50/50 probability

But economists predict Fed pausing…

Equities

Rupert Murdoch’s takeover of Sky not a done deal yet

Nestle taking over Blue Bottle Coffee

Low commodity prices make CNOOC stop a feasibility study of a LNG terminal in BC

Oil price above USD 50 bringing stability to US shale

Upcoming Trump trade shadow and tax deal making US small caps rally

France expects other EU members to join the tax fight against online companies like Amazon, Google

Bonds

10-yr Trys yield at 2.18% vs 2.19% yesterday

10-yr Bund yield at 0.41% vs 0.40% yesterday

GBPUSD

BoE surprisingly very hawkish yesterday, opening the door to 1.3500

If USD takes a hit after today’s retail sales, can march higher towards 1.4000

Despite heavy short specs betting on Brexit mess

Platina

In case of risk off mood, can do much better than gold

As it trades at huge discount to it

Data/events

ECB’s Lautenschlaeger (0815 GMT)

Sep 19-20 FOMC – not expecting anything special

Fed is on the way to start USD 10 bln tapering as of Oct 1

Sep 21 – Brexit – a major speech from May expected

Is UK sort of reshuffling priorities or looking at a reset of talks?

Oct 18 – China National Congress

Oct 26 ECB

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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June 28, 2017 - Market Update (Draghi's reflation & Yellen's “no new financial crisis in our lifetime” words, Cyber attacks - a new era to come? Bonds, equities down - a new risk off combination? JPY a perfect summer carry trade)

Short recap

Asia down inspired by US session after another delay of healthcare bill vote

Europe opening lower

World coping with another cyber attack – a new era to come?

Draghi replaced deflationary forces by reflationary ones and pushed EUR higher

Sounds like woo-doo to me when we talk about “forces”…

But overall his speech was in line with dovish policy. More link  

Yellen was out with “no new financial crisis in our lifetime” comment, meaning as long as she is alive. More link

Healthcare reform vote delayed as Republicans score a goal to their own net

Bonds and equities on defensive overall yesterday what makes an interesting risk off combination

Carry trades to suffer, thus EM and high yield DM not to do well if current setup continues

Equities

Techs, biotechs and EM bleeding

Nestle to buy back CHF 20 bln worth of shares over 3 years

Option traders looking at AstraZeneca from a short side as the market positions itself for lung cancer trial results

Alphabet hit by EUR 2.4 bln fine from EU for abusive behaviour in search engine

Not effecting long term business as the fine is just 3% of cash/1.5 month of cash flow

Facebook at 2 bln user mark, doubling since 2012

Syngenta (owned by Chinese) interested in Bayer assets that need to be sold

As a part of Monsanto takeover deal

Bonds

10-yr Trys yield at 2.22% vs 2.14% yesterday

10-yr Bund yield at 0.39% vs 0.25% yesterday

DXY

Support 95.90, then 94.70 (61.8% Fibo)

Resistance 96.44 (50.0% Fibo)

EURUSD

Market was caught by surprise with Draghi’s reflationary forces comment

What was also confirmed by price action

If we see the 1.1295/1300 holding, we are likely marching through 1.1400

But the historical supply range comes towards 1.1500 (check the weekly chart)

Central bankers to drive the show today too

Support at 1.1366, 1.1300

Resistance at 1.1400, 1.1415/30, 1.1464, 1.1500

Weekly chart (Source: Saxo Bank)

Daily chart (Source: Saxo Bank)

USDJPY

Dip buying as a strategy? As some may see carry trade going to summer pushing JPY lower

Exporters holding sell orders at 112.50

Bids towards 112.00, more below

Support 111.80 (100 DMA) and then 111.50 with USD 2.5 bln option expiring

Resistance 112.24 (61.8% Fibo), 113.05 (76.4% Fibo)

Data/Events

Fed’s Williams (0730 GMT)

Central bankers meeting in Portugal:

ECB’s Mersch (0900 GMT), Lautenschlager (1045 GMT), Constancio (1130 GMT), Draghi (1330 GMT),

BoE’s Carney (1330 GMT)

BoJ’s Kuroda (1330 GMT)

BoC’s Poloz (1330 GMT)

Thu

Fed’s Bullard (1700 GMT)

US Trade deficit report to be released – what accusations can we expect?

July 7/8 – G20 meeting – will Trump meet with Putin?

July 20 – ECB meeting

July 26 – FOMC meeting

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

  

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June 26, 2017 - Market Update (Low yields to pressure US banks, Italian tax payers taking EUR 17 bln bill, FX options - implied vols making lows, VIX at 10, Fed to keep hiking, EUR longs trimmed)

Short recap

Asia up

Europe opening higher

Trump ok to cooperate with Senate on healthcare bill

Mester/Williams to keep hiking

Goldman Sachs sees 25% probability of a recession in US over the next 2 years

BIS was out with very positive annual report saying global growth to reach long-term average levels

Sees high risk of still growing debt level due to low rate environment and productivity growth

Arguing central banks should normalise their policies. More  link

FX options – implied vols making new lows

Similar picture in VIX, trading around 10 level

Equities

Pre-earnings – investors looking forward to see strong earnings in order they feel comfortable with current market valuation (highest since 2004)

Low yields to bite US banks, may see the pressure this week in case of risk off

As the valuations of US banks need to reprise given the low yields

Takata filling for bankruptcy after worldwide airbag recalls

Chinese bank regulator pushing banks to implement reforms

Intesa Sanpaolo to receive assets, senior bonds from two failed Italian regional banks

Gov to cover EUR 17 bln hole, subordinated debt holders to take the hit

Nestle having a new shareholder (Third Point) that pushes for squeezing more juice out of the company for shareholders

Looks like GE’s acquisition of Alstom’s power biz is paying off with a new contract for power plant supplies in Romania

IT companies like Cisco, IBM or SAP are pushed by Russia to share cyber security info

Bonds

10-yr Trys yield at 2.15% - not much movement

10-yr Bund yield at 0.25% - despite the mess with banks in Italy, the IT-GE yield spread stable after huge drop in June

The hit subordinated bond holders took in IT can spread around within this space in EZ

EURUSD

COT report as of Tuesday last week:

EUR longs 45k vs 79k previously - after the highest since 2007, EUR long specs trimmed positions

US yields to set the direction today

Range 1.1100-1.1300 this week likely

Support at 1.1187 (23.6% Fibo)

Trading above 10 DMA at 1.1176

Just out of curiosity Morgan Stanley was out with 'Strategic FX Portfolio Trade Recommendations' – Limit order from May 18:

Entry: 1.1030

Target: 1.1800

Stop: 1.0800

The rationale:

“We expect the USD to rally modestly against EUR as the market reprices its Fed expectations. We would use that rally in the USD to sell vs the EUR.

Increased signs of pro-integration pressures emerging in Europe (eg. Macron, Portugal - Fitch upgraded outlook from stable to positive ... improvement in the periphery)

Stronger growth environment should bring inflows into the equity market. The risk to this trade is a slowdown in equity market”.

Data/Events

Fed’s Williams

ECB’s Draghi (1730 GMT)

Tue

ECB’s Draghi (0800 GMT)

Fed’s Williams (0805 GMT)

BoE’s Carney (1000 GMT)

Fed’s Harker (1515 GMT)

Fed’s Yellen (1700 GMT)

Fed’s Kashkari (2130 GMT)

Wed

Fed’s Williams (0730 GMT)

Central bankers meeting in Portugal (1330 GMT):

ECB’s Draghi, Constancio, Mersch

BoE’s Carney

BoJ’s Kuroda

BoC’s Poloz

Thu

Fed’s Bullard (1700 GMT) 

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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June 16, 2017 - Market Update

Short recap

Asia flat

Europe opening higher

BoJ no change, upgrading consumption, domestic and global growth

To keep support as inflation is far from 2%

Greece getting EUR 8.5 bln loan

What about central banks raising the inflation targets to 3-4% range instead of 2% one?

Would it create the psychological pressure on households and corporates to spend/invest more?

Fed ok with hikes despite lower inflation pressures and job market is still strengthening

As financial markets conditions constantly improving since Mar 2016

Equities

US retailers suffer with almost 300 bankruptcies this year

US techs fall out stopped again around 5650 area for NASDAQ

Seems like correction without any panic is welcome

Nike to cut jobs and streamline offering

Apple suffering the most from techs selloff

Facebook fighting terrorism via removing content

Uber looking at trucks

BHP with new Chairman

Nestle likely to sell US business of Butterfinger and BabyRuth

BP and Reliance Industries to take on gas production in India (USD 6 bln)

Bonds

10-yr Trys yield at 2.17%

10-yr Bund yield at 0.28%

EURUSD

Support at 1.1120 (38.2% Fibo)

Resistance at 1.1187 (23.6% Fibo)

USDJPY

Digesting FOMC

While BoJ seems off the interest of markets

Resistance at 111.24 (50.0% Fibo), then 111.37 and 112.00 Ichimoku

100 DMA at 111.88

Support at 110.50 (61.8% Fibo) and 110.58 (200 DMA)

Descending trendline around 111.00

Closing today above 110.80 level would be a bullish outside week signal

With potential to look at 114.36 after breaking 111.24 level

DXY

Close to resistance at 97.62, then 97.85 (50.0% Fibo)

And descending trendline around 97.98

Gold

Under pressure post-FOMC

Expecting a wait-and-see game, as there is still decent physical demand due to geopolitical risks

While investors need to assess upcoming US data to get more comfortable with Fed’s hawkish tilt

Support at 100 DMA at 1247, 1245 (61.8% Fibo), 200 DMA at 1237 and 1234 (76.4% Fibo)

Resistance at 1255 (50.0%)

Upcoming Data/Events

Fed’s Kaplan (1645 GMT)

Sunday – French Legislative (Parliamentary) elections

Monday – Brexit talks starting ?

Thursday – EU Summit

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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