Short recap
Asia on a safe side on geopolitical risks, JPY, gold and
VIX up
Europe opening higher
Kuroda – BoJ easing for price stability and
not to target FX levels
Will keep going with easing to reach 2%
inflation
BoJ reduced 3-5 yr bond purchases
Xi sent a message to Trump to solve the
situation in North Korea in a peaceful way
Japan joining US in North Korea muscle flexing on
the sea
US Sec Tillerson in Russia today
Merkel against EZ mutual debt to distinguish
herself in election year from Schulz
Greece and Portugal would need to address
debt sustainability anyway
China PPI at 7.6% but serious real estate
problem
Economy way overleveraged (80% of GDP)
Will be negatively impacted by deleveraging that
would need to take place at certain point in time anyway
VIX was up to 15.88% despite S&P 500 just
slightly lower
BHP Billiton rejected any attempts to change the
corporate strategy from Elliott Management side
Siemens to partner with Bombardier in train
production to better position themselves against Chinese CRRC Corp
United shares hit by passenger issue due to
overbooking
It seems like a very common practise by airliners to
overbook and then offer you an incentive or compensation for
not flying or flying another day
Dialog Semiconductor may lose deal with Apple
10-yr Trys yield at 2.30% (dropped to
2.28%) - should be temporary on geopolitical risks (Trump acting as a
policeman)
While June rate hike is priced at around 60%
If the rate drops further below the 2.30% level it would
express the level of doubt of bond market about Fed raising rates sooner than
later
10-yr Bund yield at 0.20%
GE-FR spread rising to 74.50 bps again on the back of leftist
Menchelon gaining momentum
His surprise win may be a risk event reflected in USDJPY
decline
FX options
EURUSD 1m RR dropped sharply, trading below Brexit
vote levels
Traders favoring put options (getting more
expensive than calls)
Market was buying strikes around French elections
heavily yesterday
In a protection move
1w vols dropping sharply yesterday
EURUSD spot flat
EURUSD 1m vols spiking to 12.47 from below 9.00
level
12.50 vols is equal to a spot move of 76 pips a day
EURUSD 1m 25 RR heavily favoring puts
But…
EURUSD 1w vols trading at historically low levels
and keep moving lower
What may be due to implied vols underperforming
And market using 1w strikes to finance strikes
covering French elections (Apr 23/May 7)
USDJPY – with ease through 110.00
Sitting at descending trendline
But close to 200 DMA at 108.70
Are the bears strong enough to take it below 200 DMA?
Similar picture as for EURUSD
1m vols spiking to 12.48 from above 11.00
1m 25 RR dropping sharply following spot and favoring
puts
Liquidity to disappear quickly as we get closer to
Easter holidays
Shouldn’t experience any change unless we really have a
huge event this week
Than we can see sharp moves either way
6m vols trading very cheap compared to risk events
as French & German elections, North Korea, Syria are
Data
UK: Labour Market Report to stay resilient
Kaplan (Fed) speaking at 1400 GMT
Apr 23 – French presidential elections
Apr 29 – EU Summit to sign off the Brexit negotiations
guidelines – until then we won’t have clearer EU position on Brexit
May 7 – French presidential elections 2nd
round
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.
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