Oct 2, 2017 - Market Update (Catalan 90% vote, Johnson-May old friends, DAX attacking 12 954 on weaker EUR, 10-yr Trys yield bullish close, Global equity funds enjoying the money in rally)

Short recap

Asian up

Europe opening higher

Catalonian 90% vote for independence

Madrid and police not comfortable with it

Declaration of independence likely to come in 48 hours

Boris Johnson sees Theresa May gone within the year (friends…)

Boeing-Bombardier dispute a proof of UK-US Trump kind of preferential partnership

Warsh the new Fed’s head after meeting with Trump

Used to be a Fed gov (2006/11) but resigned over disagreement over bond buying

Other candidates might be: Yellen, Cohn, Powell, Hubbard

ECB close to tapering? What about the business and consumer confidence hitting multiyear highs…

Equities

Volkswagen making up the diesel scandal bill up to USD 30 bln

Global Logistic Properties buying Gazeley (USD 2.8 bln) to enter EU as a lucrative market

Germany eying to buy warplanes from Boeing

Bombardier goes short against Boeing but seals USD 1.7 bln deal with SpiceJet from India to sell 50 planes

Global equity funds still growing in size as investor poor money in

Cryptocurrency exchanges still facing the security and fraud issues

DAX to benefit from weaker EUR, next stop 12 954 or higher?

Source: Saxo Bank

Bonds

10-yr Trys yield at 2.58% vs 2.58% on Friday – had a bullish close on Friday posting outside month/monthly reversal

10-yr Bund yield at 1.67% vs 1.07% on Friday

Spanish bonds - Catalan vote impact – we need to see market reaction first

As we balance between the independence and strong economy

COT report as of Tue last week

USD: Leveraged funds net sellers

Shorts at the highest level since May 2014

EUR: Largest net buying

Longs at 88k vs 62k previously

GBP: First net longs since Oct 2015

Longs 5k vs shorts 10k previously

EURUSD

Gapped lower but Catalan vote to have a short-lived impact

Unless we see a deep constitutional crisis in Spain

Support at 1.1762 (Ichimoku) 1.1720 (38.2% Fibo), 1.1708 (200 WMA)

Resistance at 1.1862 (23.6% Fibo), 1.1844 (50 DMA)

USDJPY

Worth of watching as DXY is getting some bullish signs

And Trump is moving with tax reform

Cross posted also a bullish monthly reversal on Friday

And trades above the descending trend line)

What may open the door towards 114.36-50 range (recent highs)

Or even 118.60/65 if we seen the Trump trade back

Resistance at 113.25

Support at 111.85 (23.6% Fibo), 112.28 (10 DMA)

Gold

Catalan vote had no major impact

Other geopolitical risks: NoKo, Kurdistan-Turkey, Iraq, Iran

Resistance at 1281 (50.0% Fibo)

Support at 1272 (100 DMA), 1263 (61.8% Fibo)

Data/events

ECB’s Linde (0930 GMT)

ECB’s Praet (1015 & 1300 GMT)

Fed’s Kaplan (1800 GMT)

Oct 1-4 – UK’s Tory party meeting

Oct 1-7 – Golden week holiday in China/Korea

Tue

Fed’s Powell

Thu

ECB Minutes

Fed’s Dudley

Fed’s Powell

Fed’s Williams

Fed’s Harker

Fri

US NFPs – 98k exp vs 156k prev

Unemployment rate at 4.4%

Earnings +0.3% vs +0.1% prev

Fed’s Bullard

Fed’s Kaplan

Oct 18 – China National Congress

Oct 22 – Japanese elections

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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Sep 21, 2017 - Market Update (FOMC - market not a strong believer of Fed talk, EURUSD sitting at strong support 1.1870/80, Gold at crossroad between 1290-1300, UniCredit to buy Commerzbank, Apple slowing, Huawei, Oppo, Samsung speeding up, EU to redo taxation of digital world)

Short recap

Asia in red

Europe opening higher

EU-CA free trade deal in effect starting today

EU to redo taxes on digital companies

Goldman Sachs expect USD 1 trln tax cuts (0.4% of GDP) over 10 yrs

FOMC – no change, rates 1.00-1.25%

Taper starting in Oct to get cushion for next crisis

Expecting 1 more hike this year, 3 hikes next year

Market pricing Dec hike at 66% vs pre-FOMC 46%

But market still not a strong believer in Dec hike yet

Fischer out, Yellen likely out next year want to make a point

Low inflation transitory but with question mark

BoJ – no policy change

Short term rates target at -0.1%

10-yr JGB yield target at 0%

Bond buying at JPY 80 trln annually

Who holds the most assets?

Fed 23% of GDP – on the way to trim

ECB 40% of GDP – Draghi was late to the QE party but did well

BoJ 60% of GDP – no signs of slowing…

Equities

Delphi & BlackBerry to work on self-driving cars software

Google eying HTC Corp (USD 1.1 bln)

UniCredit interested in merging with Commerzbank

New Apple watch experiencing connectivity issue

Apple slowing in innovation while Chinese rivals (Huawei & Oppo) growing on design and price

Amazon screening website for ingredients used to make bombs

Something different... Amazon is the New Tech Crash  link

Bonds

10-yr Trys yield at 2.27%

10-yr Bund yield at 0.45%

EURUSD

Completed bearish outside day

Sitting slightly above the strong support zone 1.1870/80

Post-FOMC flows to show direction today

Support provided also from rising trendline (since April) and 1.1862 (23.6% Fibo)

Then 1.1837, 1.1823, 1.1808 (50 DMA), 1.1727 (200 WMA), 1.1720 (38.2% Fibo)

If we see a consolidation 1.1600/1.1500 may be a target

Resistance at 1.1943 (10 DMA), 1.1966 (55 HMA)

USDJPY

Fed moving, BoJ on hold makes bearish tone for JPY

Resistance around 112.60-70, stops above up to 113.00

Then 113.14 (23.6% Fibo)

Support found from 112.20 lower with bids starting at this level

112.31 (38.2% Fibo), 112.18 (200 DMA), descending trendline

Gold

USD and higher yields putting pressure

Rocket man and Barking dog providing support

Support at 1281 (50.0% Fibo)

Resistance 1299 (38.2% Fibo), 1300, ascending trendline

All critical levels

Data/events

ECB General Council meeting

ECB’s Praet (0930 GMT)

ECB’s Draghi (1330 GMT)

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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July 12, 2017 - Market Update (All about Yellen today, Merkel flying EUR high, Siemens chasing their turbines, Chinese banks another opportunity, Trump and Russia (but Junior this time), 10-yr Bund yields jumping above 0.60% mark)

Short recap

Europe opening higher

Trump Jr – Russia blow here but markets focus on Yellen

Trump administration constantly distracted, not focussing on proper work

Gary Cohn Trump’s candidate to replace Yellen

Fed’s Mester likes taper sooner rather than later

Merkel putting pressure on ECB to raise rates

JPM’s Dimon – taper can caught people by surprise

Chinese media speculations – PBOC should widen the 2% CNY daily trading band

Funds kept selling USDCNH overnight

Quarels as a Trump Fed nominee getting first oppose comments

Due to his ties to Wall Street and possibility that oversight of huge banks would be softer

Moody’s – Lack of clarity in Brexit making question marks around UK’s credibility

Equities

BlackRock - Investors need to take more risk  link

US asset managers underallocated EM stocks 

Total to invest USD 3.5 bln in Qatar offshore oil

Siemens chasing their turbines in Crimea even legally

Chinese banks underperformed their global peers but offer lower valuations and decent yields

Regulators were out saying the risk is in control

Snap hit by downgrade from Morgan Stanley (underwriter) on slower ad development

Instagram is biting in to Snap’s largest user base among young

Bonds

BoJ increased bond purchases in 3-5 yr space

10-yr Trys yield at 2.35% but 5-yr/10-yr may experience some correction after recent move higher (support around 2.30%)

10-yr Bund yield at 0.61% - sharp jump from around 0.55% after yesterday’s comments from Merkel

EURUSD

Merkel, Trump Jr. – Russia thing, dovish Fed comments behind the move

1.1450 broken, on the way to 1.1580 as short term longs were open

Likely looking at 1.1615 as long as 10 DMA (1.1407) not clearly broken on dips

Next the 1.1714 and 1.1750 may come

Bear in mind that any rally above 1.1600 is way overstretched and likely not lasting

All about Yellen today, watch especially her remarks on inflation

But market is very very complacent about Fed moving…

USDJPY

Resistance at 114.36 high

Stops at 113.50 hit but dip demand helped

Support at 113.30 (10 DMA), 113.05 (76.4% Fibo), descending trendline

Dips below 113.00 may be a good point to renter longs

But 112.00 level can serve as a stop level

Expiring options USD 1.3 bln between 113/114.00

Market is very long USDJPY but short gamma

And 50/100/200 DMA at 111.89/78/66 very close

Again all about Yellen today

Gold

Support at 1214 low held, no more technical selling through

Resistance at 1231 (200 DMA), 1234 (76.4% Fibo) and rising trendline

If broken along with 16.20 in Silver we can see more short covering

But Yellen today again…

Data/Events

Yellen testifying (1400 GMT) before Congress Committees today/tomorrow (prepared text to be released at 1230 GMT)

Likely to confirm the continuation of normalization

Do financial conditions continue to ease

Job market and inflation

Balance sheet reduction – suspension of reinvestment policy coming announcement in Sep ?

Another rate hike in Dec ? Currently priced at 49%

ECB’s Linde 

ECB’ Dalhau, Dombret

Fed Beige Book (1800 GMT)

Fed’s George (1815 GMT)

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 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 14, 2017 - Market Update

Short recap

Asia mixed

The Russian dust around Trump is settling down

And we go back to work to crunch through hard data and policy execution

Softer Brexit talk and EU is opening the door for UK to stay

Equities

Renault-Nissan surprised investors with specially created vehicle for undisclosed bonuses for top management

A shadow of unclarity surrounding Banco Popular fall down

Verizon-Yahoo deal done, Mayer is a history

GM taking it seriously about electric autonomy cars

Apple issuing USD 1 bln of special bonds in a support of green projects

As Trump backs away from Paris climate agreement

…a nice action with a bit of branding building

Postponed US banking reform to postpone global initiatives

Bonds

10-yr Trys yield at 2.20%

10-yr Bund yield at 0.26%

DXY

Markets have experienced recently some USD buying from leverage names against EUR and CHF

While selling from real money going to FOMC

Should FOMC keeps hawkish wording, USD to benefit

If not, USD sell off to be small and short

Support at 96.44 (61.8% Fibo), 96.90 (10 DMA)

Resistance at 97.85 (50% Fibo), followed by 99.26 (38.2% Fibo)

EURUSD

What’s next? 1.0500 again or 1.1500?

Resistance at 1.1231 (10 DMA), 1.1284, then 1.1300

Support at 1.1200, 1.1180 (23.6% Fibo) and 1.1114 (38.2% Fibo)

USDJPY

Critical resistance at 110.50 (61.8% Fibo) and 110.58 (200 DMA)

Support at 109.60 (76.4% Fibo), then at 108.12

Gold

Double top

Resistance at 1275 (10 DMA), 1276 (23.6% Fibo)

Support at 1264 (38.2% Fibo), 1261 (50 DMA), 1255 (50.0% Fibo)

Eventually, 1245 (61.8% Fibo and 100 DMA) depending on how hawkish FOMC wording will be

Upcoming Data/Events

IMF’s Lagarde speaking

ECB’s Weidmann speaking

ECB’s Constancio speaking (0815 GMT)

FOMC meeting

Dovish hike priced in

Market can get surprised if Fed keeps talking hawkish

Forward guidance critical (Yellen holds a press conference) in the light of inflation development

Economic projections to be released

As well as details on balance sheet reduction (USD 4.5 trln) are expected

…all of that in the light of today’s US CPI release

Do not forget that US economy usually doing better in H2

Thu/Fri – EcoFin meeting to discuss Greece

Fri – Fed’s Kaplan speaking

June 18 – French Legislative (Parliamentary) elections

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 12, 2017 - Market Update

Short recap

Asia lower taking clues from Nasdaq and its heavy weights

Europe opening lower

FR parliamentary elections – Macron’s party winning a huge majority in Lower House

What will make the reform package likely to happen

Traditional parties dying , Le Pen heavily down

China opening to foreign investors more, to cut restrictions on FDI

While reports of falsified provincial economic data

Fitch, Moody’s, S&P – no changes in UK rating but keep negative outlook

GBP waiting for clues

All points to softer Brexit as May’s coalition partner doesn’t want to have a border controls and customs union with Ireland

UK employers not really prepared for possible immigration changes

Equities

Apple – new iPhone may be lagging the download speed against its rivals

Elliott Advisors increasing the share in Akzo Nobel to 5%, becoming the largest shareholder

SoftBank entering the field of robotics by buying the business from Alphabet

EU to investigate Qualcomm-NXP (USD 38 bln)

NASDAQ sold off, driven by Apple (iPhone upgrade issue) and NVIDIA (casino stock label)

Investors may be caught by surprise as the volatility in techs is extremely low

Bonds

10-yr Trys yield at 2.22%

10-yr Bund yield at 0.25%

DXY

Should FOMC keeps hawkish wording, USD to benefit

If not, USD sell off to be small and short

Support at 96.44 (61.8% Fibo)

Resistance at 97.85 (50% Fibo), followed by 99.26 (38.2% Fibo)

EURUSD

Resistance at 1.1200, 1.1231 (10 DMA), 1.1284, then 1.1300

Support at 1.1180 (23.6% Fibo)

Lots of options expiring today within the range of 1.11-1.1200

So the trading should be contained here as we wait for FOMC

COT report – speculative longs in EUR increased by 1k to 74k, largest long positioning since 2007

USDJPY

Yields to lead the game ahead/after FOMC

Crucial resistance at 110.50 (200 DMA and 61.8% Fibo)

Support at 109.60 (76.4% Fibo), then at 108.12

Gold

Double top

Resistance at 1276 (23.6% Fibo)

Support at 1264 (38.2% Fibo), 1255 (50.0% Fibo)

Eventually, 1245 (61.8% Fibo) depending on how hawkish FOMC wording will be

COT report - saw long liquidation ahead of FOMC

Upcoming Data/Events

Tue – US Attorney General to testify before Congress over Comey and meeting with Russians

Tue/Wed – FOMC meeting

Dovish hike priced in

Market can get surprised if Fed keeps talking hawkish

Forward guidance critical (Yellen holds a press conference)

Economic projections to be released

Thu/Fri – EcoFin meeting to discuss Greece

Fri – Fed’s Kaplan speaking

June 18 – French Legislative (Parliamentary) elections

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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May 5, 2017 - Market Update

Short recap

Asia lower on commodities losing the ground on worries about the global growth

Europe opening lower

DAX printing new historical high

Praet pushed EURUSD higher with ECB guidance shift to focus on data

House approved new healthcare bill

Now it is heading to Senate where it will face a strong opposition

EZ to grant a relief on Greek debt but reforms first

Equities

Ferrari driving super high

Having the room to go even higher among luxurious brands based on fundamentals?

Johnson & Johnson to pay USD 110 mln in cancer dispute

CIBC making offer for PrivateBancorp better (USD 4.9 bln)

Earnings season,

Berskshire Hathaway reporting, the annual shareholders meeting to follow

Bonds

Bond markets pricing in Macron’s win

FR-GE spread down to 44 bps

10-yr Trys yield at 2.35% - substantial rise on June hike expectations

10-yr Bund yield at 0.38%

EURUSD higher ahead of French elections

Move in EUR, not USD

Strong resistance at 1.1020 (descending trendline on daily chart)

But USD strength can come from much better headline NFPs or earnings rising more than +0.3%

Eventually, the rising peripheral spreads

Data

US: NFPs – market not expecting any surprise based on strong ADP

Full focus on earnings growth given the full employment

Headline +185k exp. vs +98k prior

Unemployment rate 4.6% exp. vs 4.5% prior

Average hourly earnings +0.3% exp. vs +0.2% prior

Fed speakers (GMT):

Fischer 15:30

Williams 16:45

Yellen, Evans, Rosengren, Bullard 17:30

Upcoming

Sunday – French presidential elections 2^nd round (Macron/Le Pen – 60/40)

May 25 – OPEC/Non-OPEC meeting

Jun 11/18 – French Legislative (Parliamentary) elections (a big question mark for Macron to gain majority)

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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Apr 11, 2017 - Market Update

Short recap

Asia cautious under geopolitical risks (Syria, N. Korea and upcoming FR elections on Apr 23)

Europe opening lower

China said No, thank you to coal from North Korea and fully loaded ships are heading back home

G7 pressuring Putin to stop supporting Syria regime

Yellen said nothing new yesterday

Looks like Fed is happy where they are right now

Trump meeting top business leaders today to discuss their support for his plans in infrastructure and taxes

Elliott Management working on changes at BHP Billiton to benefit the strategy

Bain Capital and Cinven on the way to acquire Stada (EUR 5.3 bln)

Swift and Knight Transportation planning to merge their operations (USD 5 bln)

Gold-S&P 500 correlation - S&P 500 way above Gold since Nov elections

Which one will give up?

Either S&P 500 will correct or Gold will spike to catch up…

S&P 500 – support at 2280 (38.2% Fibo), may be looking at resistance at 2390 or higher to 2430

But bear in mind that “Sell in May and Go away” is very close

DAX – below former support 12 190 and then 11 850 to keep the medium term rising view in place

EURUSD – support at 1.0566 (23.6% Fibo)

Trading slightly below the rising support trendline

Bollinger bands started to expand what may indicate bearish view if EURUSD stays below trendline

Yesterday’s bond buying report from ECB showed that the bank keeps firing at full cylinders and is buying corps heavily

Daily purchases were at around EUR 483 mln level (as mentioned yesterday the average was EUR 365 mln)

All of that is happening despite the taper in place since Apr

If the ECB is tapering while corps buying is much higher than before, it points to ECB is buying much less govies

Not to forget we may have seen some pre-loading before Easter’s low liquidity in corps space as well

10-yr Trys yield at 2.34%

10-yr Bund yield at 0.19% - very close to the lows

French elections

Question is how much risk is priced in EUR and Bunds ahead of FR elections

Are we going to see the risk-on moves and a huge risk repricing in EUR and Bunds?

At the moment the EURJPY steady decline may be an indication of what market thinks…

GE-FR yield spread widening again as we are getting closer to Apr 23

EURUSD 1m ATM implied vols jumped substantially to 12.58 level from around 8.50 just few days ago

Goldman Sachs was out yesterday recommending to short OAT futures as a strategic positioning ahead of elections

Data

EZ: Industrial Production expected to edge higher

US: NFIB Small Business Optimism Index to keep the positive trend

US: Job Openings & Labor Turnover Survey expected slightly higher

Short week ahead of Easter holidays, thus lower liquidity

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 2^nd 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. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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Apr 10, 2017 - Market Update

Short recap

Asia with some caution

Europe opened higher but mixed now

Trump-Xi meeting – both declared friendship, trust and ready to work together…but no agreements

No real consensus on North Korea, US trade deficit on the table over the next three months

Chinese in South Korea to discuss North Korea

US NFPs lower on weather and layoffs in retail sector

Underlying theme staying strong with good household survey and unemployment rate down to 4.5% (full employment) without any change in participation rate

Canada still not sure about how US is committed to introducing a border tax

Oil looking for a balance between Syria, higher demand and drilling activity in US

Deutsche Bank raised EUR 8 bln of fresh capital what can please regulators

And help with new investments and legal expenses

Rio Tinto had a lower tax bill globally due to lower earnings

Fox (part of Murdoch’s group) to acquire Sky

US equity funds experienced a huge outflow

As US investors search for better opportunities overseas going to Q1 earnings season

10-yr Bunds yield at 0.23%

10-yr Trys yield at 2.39% - after US NFPs the yield dipped below 2.30% support but recovered quickly

Trys kept selling off as market focussed on positive part and Dudley downplayed the impact of reduction in balance sheet on the pace of rate hikes

And confirmed the reduction start at the end of 2017 or early 2018

Moves in USD and Trys yields after NFPs clearly point to stronger USD and higher US yields

ECB to publish bond buying data (first after lowering the monthly buying amount)

Used to buy EUR 365 mln a day

Staying close to EUR 300 mln a day may have a positive effect on corporates but negative on govs

Recall – ECB has not specified about the split: govs/corps, sector…etc.

COT report

EUR staying pretty flat after adding few shorts

GBP near record shorts after trimming them a bit

USDJPY – traders not sure about risk off mood as the JPY weakens (after NFPs/Dudley)

If we get well above 112.00, we are likely on the way higher towards 115.00

Gold 3m vols very low close to 2013/2014 levels

If geopolitical/risk off even or 200 DMA at 1255 broken

We can see a sharp move higher

Data

EZ: Sentix Investor Confidence Index expecting higher print

US: Labor Market Conditions Index expecting a lower number

US: Employment Trends Index to provide a bit more clarity on Friday’s NFPs

G7 foreign ministers meeting in Italy today

Yellen speaking (2000 GMT)

Short week ahead of Easter holidays, thus lower liquidity

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 2^nd 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. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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Mar 28, 2017 - Market Update

Short recap

Asia up on signs of stabilization in US stocks and USD

Europe opening higher

Chinese HNA Group in talks to acquire Forbes

Credit Suisse to make decision on capital increase soon

BoE asked UK banks to take steps their lending activities stay unaffected in case of full Brexit

Dow Chemical-DuPont merger (USD 130 bln) gets a green light from EU on asset sales plan

Westinghouse (Toshiba US) likely to file for bankruptcy today

PE fund Elliot giving the financial hand to a Chinese investors to buy AC Milan

Qatar wealth fund to be present in Silicon Valley

Ericsson under pressure on provisions

Saw some rebound in US stocks but it was weak

In general US stocks seem to be 20% overpriced compared to Europe

Gold – not able to break through, facing the profit taking

Correction can be within the range 1228-1236 despite positive tailwinds

Bunds – saw sharp rejection of 161 level yesterday

As markets may be refocussing more on high-yield space on the back of better macro data from EU

10-yr Trys yield at 2.39%

10-yr Bunds yield at 0.41%

EURUSD

Closed below the high from Dec 8 at 1.0873

200 DMA at 1.0878 and descending trendline kept the bulls

Bit of caution – As Le Pen is still part of presidential race in FR

It is prudent to still take this risk into account

In case of her win, the current rally would be strongly reversed

As the risks would need to be repriced across many asset classes

Betting suggests lower odds to her victory than official polls show

DXY

Got some technical support: from trendlines and 200 DMA

Otherwise can revisit 96 level

Data

US: Consumer Confidence Index – expecting slightly lower but confirming the trend

Fed speakers (GMT):

Yellen (1630)

George (1645)

Kaplan (1700)

Powell (2030)

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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Mar 23, 2017 - Market Update

Short recap

Asia slightly up

EU opening higher despite risk off sentiment still present in the markets and not a very great start of Chinese earnings season (Tescent disappointed)

US session showed hesitation with rebound in equities

As only techs experience a correction higher while financials, energy and materials ended the day on a lower note

Banking lobbying groups do not see any revamp of Dodd-Frank soon, may take the initiative and prepare their own proposals

Donation scandal in Japan

Sentiment in financials (banks) can be effected by the last round of LTRO from ECB

Consensus looks at allocating EUR 110 bln (last time it was EUR 62 bln)

Two more regional banks in Italy ready for a bail out what may not be welcome by EU regulators

Westinghouse Electric (Toshiba US) likely facing bankruptcy

GE linking top execs bonuses to cost cutting success

Enbridge looking to cut 1000 infrastructure positions after taking over Spectra Energy

S&P 500 below 2350

Nikkei 225 still flirting with 19 000, the 18 700 is the next

VIX (12.66) and stronger JPY not proving the rebound yet

Bit of fundamental view: Fed on the path of rising rates, political risks in Washington, not clear signs of what Trump really wants to do, risk of wave of protectionism, debt burden is huge around the world, population in developed markets getting older, overall there is an excess of production capacities

Gold taking a break before 1250 (50 % Fibo) and 1258 (200 DMA)

At the moment 200 DMA needs to be broken for further buyers to get attracted

Iron ore keeps falling

Supported by China tightening monetary conditions to address excessive leverage

Also refocussing away from infrastructure and property investments what in turn has negative effects on commodities (iron ore including)

OPEC meeting in Kuwait this weekend

10-yrs Trys yield at 2.41%

10-yr Bunds yield at 0.41% - lower after indecision from previous sessions as the higher rates expectations and QE coming to an end still present in the market

Lower USD making monetary conditions more accommodative

Data

UK: Retail Sales to accelerate

EZ: Consumer Confidence Indicator higher print is expected

Fed speakers: Yellen (1245 GMT), Kashkari, Kaplan

ECB speakers: Lautenschlaeger (1500 GMT)

US House voting on Obamacare repeal – expected at 1500 GMT but still not specific time is set. The leaders need to make sure they will have sufficient votes before actually, calling for a vote

Super important event in terms of whether Trump can/is able to deliver or not

Or in case of yes vote how it will turn out with respect to different lobby groups around Republican party

As the US political system is not complicated enough, Trump needs to win the votes of sceptical members of the House Freedom Caucus

Should you have any questions feel free to contact us 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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Mar 6, 2017 - Market Update

Short recap

Asia in red on Fed rate hike prospects and slowing China

China working on reforms to reign in the debt load, put in place measures to contain future financial crisis and shift the export lead to consumer oriented economy

North Korea playing with fire again

German Private banking association don’t see the need for ultra-loose policy from ECB anymore

Oil lower on Russia production cut compliance

Trump verbally dumping MXN lower but is it really what he wants?

Weaker MXN means Mexico more competitive

Gold – net longs up 48% hitting 3-month high (COT)

Deutsche Bank selling EUR 8 bln of shares and stake in Asset management business

Need to strengthen position and increase the capital ratios

If sold at EUR 11.65 per share would bring the CET1 to 14.1%

A small surprised in dividend of EUR 0.19 while market not expecting anything

Peugeot-Citroen helped GM to exit from Europe by buying Opel-Vauxhall

OMV buying a share in Russian gas field (EUR 1.75 bln)

Yellen’s speech on Friday:

“A rate increase at next meeting "would likely be appropriate" if Fed determines that data on employment and inflation are continuing to move in line with expectations.”

Well a magic word “if”…

EURUSD and USDJPY – back to square one

Pace of rate hikes not expected to changed on Mar 15 even if Friday’s NFPs are strong

That’s why USD reaction on Fischer and Yellen muted

Do we really have more USD strength in store?

COT report – cutting USD long posit

EURUSD daily levels:

3^rd res 1.0789

2^nd res 1.0706

1^st res 1.0664

Pivot 1.0581

1^st sup 1.0539

2^nd sup 1.0456

3^rd sup 1.0414

USDJPY daily levels:

3^rd res 115.47

2^nd res 115.11

1^st res 114.53

Pivot 114.17

1^st sup 113.60

2^nd sup 113.23

3^rd sup 112.66

FX OPTIONS

EURUSD - Saw a massive selloff in the middle and longer end of the curve on Friday due to:

Le Pen losing ground, risk on in stocks, spot higher from 1.0500 despite Fed speakers and US data, and March hike already priced in

1w covering ECB and NFPs at 7.5 vol, what is the spot range of 110 pips

3m ATM down 0.9 vol to 9.35 level (3m covering FR elections)

BONDS – A heads up…

10 yr Trys yield at 2.47%

10 yr Bunds yield at 0.35%

A bit of divergence (more than 200 bps) between 10 yr Trys and Bunds

Is the market really reflecting the reality of rise in price and economy growth in EZ that way?

More reasonable level for Bunds yield would be around 1% than 0.35% now

Just imagine the shift if it materializes

ECB – QE and wording on inflation/growth crucial

As the political risks in EZ are fading away (Le Pen)

Data

The whole week will be about the below. Today we have EU Summit but no major headlines expected.

Thu:

ECB – expecting just some verbal tweaks on QE, bond buying, may be reshuffle of maturities…etc.

Markets will be searching for any hints on change in the position on rise in prices and growth

No major change expected despite Buba seeing world differently

Fri:

US NFPs – headline figure, unemployment rate and Average hourly earnings will be watched

Earnings is the number to look at if no bad surprise in headline

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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Mar 3, 2017 - Market Update

Short recap

Asia in red

EU opening lower

Smaller companies in UK getting ready for Brexit as they keep cash and reduce investments  

Peugeot-Opel deal may be announced in a couple of days

Henkel bidding for Darex Packaging (USD 1.05 bln)

Alcoa consolidating internally

FX brokers tempted by US market on upcoming financial deregulations

Snap up 41% first day on NYSE in most prominent tech IPO since Alibaba

May be reminding us 1999-2000 year with techs flying high, CBs supporting markets with cheap money

Kind of scenario when the last 1-2 years of bull market are very strong

US stocks valuation overstretched

But looking at Europe can be an option, especially if political risks are off the table

Gold consolidating, support at 1220

Silver dropped 4%, support at 17.38/17.73

US 10 yr Trys yield at 2.47%

Very busy day for Fed’s officials as they have last chance to tweak the market about March hike (now priced at 90%):

Evans, Lacker (1515 GMT)

Powell (1715 GMT)

Fischer (1730 GMT)

Yellen (1800 GMT)

If Fed hikes in March, the wording about potential acceleration of hikes will be crucial for the market

EUR – political risks in EZ vs better incoming data, risk of taper from ECB

USD – Trump stimulus policies, hikes

EURUSD – no change, overall market is positioned neutral in EUR

Res 1.0526 (61.8% Fibo)

Sup range 1.0500/20

Sup 1.0453-61

Sup 1.0340

Closing below 1.0460 important for big players as bears worked well the whole week. EUR may get stronger but against CHF, JPY, AUD…etc.

The risk are Fed speakers, if we do not manage to close below 1.0460/80 range (as something may be cooking around) the caution next week is warranted (ECB, US NFPs).

Reuters poll:

EURUSD at 1.0400 in 6m, 1.0300 in 12m

Trump not clear on USD

EURUSD options

Seen realized vols trading lower

1w Implied much higher at 9 than Realized at 4

1w expiry is covering Yellen tonight and US NFPs next Friday

RRs keep strongly favoring puts as we are sitting close to 2017 low of 1.0340

FR elections – despite recent opinion polls the expiries covering 2^nd round of vote on May 7 still trading at high end of volatility curve

Data

Fri:

EZ: Retail sales to print higher but trending lower

US: ISM Non-manufacturing activity index – expecting no change

US: NFPs only next week on Mar 10

Next Friday:

US: NFPs

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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