July 7, 2017 - Market Update (Good NFPs may trigger collapse in bonds/stocks, EZ stocks under pressure from higher yields/EUR, BoJ buying and buying, ECB not respecting allocation key, thus pushing core yields/EUR higher, EUR - make it through 1.1500 or ? Berkhsire to buy Oncor, Celgene/BeiGene to cooperate)

Short recap

Asia in red

Europe opening lower

Flash crash in Silver

Trump to meet with Putin

Very good US NFPs numbers may trigger collapse in bonds and stocks

As the risk of rising rates further will all implications will be higher

ECB Minutes with some tightening of financial conditions

Central Banks’ Reversals Signal the End of One Era and the Beginning of Another (Bridgewater CIO)  link

Equities

EZ stocks under pressure from higher rates and stronger EUR (like capital/debt intensive utilities)

But banks/financials doing well

In general financials (higher profits), health care (defensive play), consumer staples and techs (low debt) generally doing better

China pushing GM, Mercedes and Volkswagen to recall vehicles with air bags produced by Takata

Volvo selling 25% stake in Deutz

Berkshire to buy Oncor (utility)

Microsoft to cut 30k jobs (mostly outside US)

Dish Network and Amazon.com in talks about partnership

Knee surgery done by robots? Top medical techs working on…

Axis Capital to buy Lloyd’s Novae

EU to fine Merck, GE and Canon

Celgene and BeiGene agree on tumor cancer treatment cooperation

Bonds

BoJ to purchase an unlimited amount of 10-yr bonds at 0.11% yield

10-yr Trys yield at 2.39% vs 2.33% yesterday morning

10-yr Bund yield at 0.57% vs 0.47% yesterday morning

Broke an important 0.50% level, next is 0.60% and 1.00%

Looks like the move higher in core EZ bond yields comes from ECB

As it has not purchased assets fully in line with allocation key

What in turn supports EUR

Higher gov bond yields represent a risk for bonds with long durations and EM as such

EURUSD

Bounced off the pivot 1.1300 (post election high)

As mentioned on Monday getting way over 1.1600 not sustainable

Trading right below strong resistance from descending trendline and 1.1445, then 1.1615 high

If above resistances are broken we can eventually get ready for a move towards 1.2000/1.2500

With first target at 1.1714 (1.1750)

In order to look at 1.1580 need get through 1.1450

On the top of very strong resistance range

1.1400, 1.1344 (38.2% hourly Fibo) and 10 DMA at 1.1365 providing some support

But bear in mind that financing long EURUSD positions is pretty expensive swap wise

USDJPY

Pretty resilient in risk off mood

Broke descending trendline

Resistance at 114.36 high

Support at 113.05 (76.4% Fibo)

Gold

Getting support from geopolitical risks

Support at 1214 low

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

Data/Events

US NFPs

Payrolls 179k exp vs 138k prior

Unemployment rate 4.3% exp vs 4.3% prior

Earnings 0.3% exp vs 0.2% prior

Participation …. vs 62.7% prior

Fed to publish its semi-annual report on mon pol (1500 GMT)

July 7/8 – G20 meeting

To discuss terrorism, free trade and climate

Trump meeting Putin while Merkel hosting them

Trump readying for a steel fight and withdraw from international talks on financial regulation

July 12 – Yellen testifying before Congress (prepared text to be released at 1230 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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July 3, 2017 - Market Update (Trump, Xi, Abe, China-Hong Kong bond connect on, Banco Popular clean up, Buffett banking at BofA, FX markets to become very sensitive to data beats/misses, Trump to fight the steel and bank regulation at G20)

Short recap

Asia in green

Europe opening higher

Overall markets are still digesting last week’s movements

Low liquidity due to July 4 US Independence day holiday

Japanese PM Abe hit by the significant loss in Tokyo elections, likely to face more troubles in the future

Trump had a call with Xi and Abe discussing North Korea and pushing China on trade issues

Abe’s advisor was out with a new BoJ governor idea

US trade deficit report delayed again as Trump is getting ready to fight steel at G20

Investors lowered their exposure to US stocks on valuations

While increased EZ assets to 2yr high

US data keep disappointing, lower expectations likely to come

What may turn into new data beats

Qatar getting 2 more days to fulfill requests

China-Hong Kong bond connect up an running

Linking foreign investors with USD 9 trln Chinese bond market

Citi of London delegation on the way to Brussels

But what the welcome there would look like?

Equities

After taking over Banco Santander Banco Popular is looking to sell EUR 30 bln of nonperforming assets in order to clean up the mess on its books

BMW is testing UK as an investment destination as it moves the decision about where to build a new electric Mini car

Buffett is taking it at full speed at BofA

Deal of Nike with Amazon is a first major hit to retailers

Baidu looking at autonomy vehicles field

Bonds

10-yr Trys yield at 2.33% (up from 2.28% on Friday morning)

Posted outside week

10-yr Bund yield at 0.47% (up from 0.46% on Friday morning) – on the way to reach the high from March at 51 bps?

Yields are up as markets have less worries about low inflation pressures

And see normalization of rates in Europe too

COT report

EUR longs at 59k vs 46k previous week

JPY shorts at 61k vs 50k previous week

GBP shorts at 39k vs 38k previous week

USD longs hitting 1yr low, cut by 50%

DXY

Lower summer liquidity and more sensitive market reactions to data beats/misses to be part of the game

Support at 94.70 (76.4% Fibo)

Resistance at 96.44 (61.8% Fibo)

EURUSD

USD weakness likely to continue this week too

But getting way over 1.1600 not sustainable

Trading right below strong resistance from descending trendline  and 1.1495 & 1.1615

If broken we can eventually get ready for a move towards 1.2000/1.2500

With first target at 1.1714 (1.1750)

Getting through 1.1450 will help us to look at 1.1580

USDJPY

USJDPY lagging higher yields

But staying resilient after Abe’s Tokyo defeat

Breaking 112.92 can open the door to 114.36

Support at 112.24 (61.8% Fibo),

Resistance at 113.05 (76.4% Fibo)

Gold

Suffering from CBs upcoming normalization

Support at 1233 (200 DMA) and 1214

Resistance at 1245 (61.8% Fibo)

Data/Events

Fed’s Bullard (0830 GMT)

July 5 – FOMC minutes

July 6 – ECB Minutes

Fed’s Williams speaking

July 7 – US NFPs

July 7 – Fed to publish its semi-annual report on mon pol (1500 GMT)

July 7/8 – G20 meeting

Trump meeting Putin while Merkel hosting them

Trump readying for a steel fight and withdraw from international talks on financial regulation

July 12 – Yellen testifying before Congress (prepared text to be released at 1230 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 30, 2017 - Market Update (Markets getting ahead of themselves, US Q1 GDP revised up, S&P - Fed to start taper in Sep, Bunds-Trys spread at 183 bps, Raiffeisen Bank having difficulties with IPO, Small techs smashed on low liquidity)

Short recap

Asian down on risk off flows from EU/US

Europe opening mixed

This week we witness lots of end of month, quarter and half a year flows/positions squaring

Market is ahead of itself based on reactions, valuations, low vols, complacency

China manufacturing up on good production/new orders

US Q1 GDP revised up on consumer spending

Well, never underestimate the consumption power of Americans as history proves

According to S&P Fed will start taper in Sep and rise rates one more time in 2017

Higher German inflation did not help USD yesterday

US trade deficit report not published yet as it is under review at White House

Can be released anytime…or tweeted…

Equities

Deutsche Bank defending bank privacy in Trump’s case

Raiffeisen Bank International having difficulties with IPO of its 15% stake in Polish lender

As profitability is questioned

Fox bidding for Sky to face hurdles

Gabriel Resources asking USD 4.4 bln in damages from Romania

Icahn backing a break up of AIG

Good results of stress tests opens the door for buybacks and dividend rises at US banks

What in turn pushes their shares higher

Techs on a roller coaster but NASDAQ likely to target 5300 area

Small techs smashed as they were first to go on their low liquidity

Bonds

10-yr Trys yield at 2.28%

10-yr Bund yield at 0.46% - reaching the Jan/Mar highs around 50 bps

Central banks in sort of harmony

But market is pricing the ECB rate hike well well in 2018

Bund-Trys spread keeps narrowing to 183 bps

EURUSD

Right below strong resistance from descending trendline and 1.1495 & 1.1615

If broken we can eventually get ready for a move towards 1.2000/1.2500

With first target at 1.1714 (1.1750)

Decent offers seen towards and above 1.1450

Still well bid on market perception of hawkish ECB, thus downside limited

But big option expiries around 1.1350-75 area (EUR 1.7 bln)

Support at 1.1400 and from options

USDJPY

Corrected despite higher US yields but yield spread as a driving force to stay

On position squaring flows, crosses were heavy too

In general the underlying theme is up, choppy, consolidating

But central banks comments still in the air

Offers ranging 112.00/15

Bids from 111.50

Support 111.93/79 (Ichimoku), 111.78 (100 DMA), 111.76 (10 DMA)  and then 111.53/50 (50 DMA)

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

Gold

Not doing well on a sell off in bonds and JPY

Resistance at 1245 (61.8% Fibo) and ascending trendline, then 1250 (100 DMA) and 1254 (50 DMA)

Support at 1234 (76.4% Fibo), 1233 (200 DMA)

Data/Events

ECB’s Lautenschlager (1130 GMT)

ECB’s Nowotny

ECB’s Coeure (1200 GMT)

US trade deficit report can be released anytime

...or tweeted…

July 5 – FOMC minutes

July 6 – ECB Minutes

July 7 – US NFPs

July 7 – Fed to publish its semi-annual report on mon pol (1500 GMT)

July 7/8 – G20 meeting – Trump meeting Putin

July 12 – Yellen testifying before Congress (prepared text to be released at 1230 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 23, 2017 - Market Update (Tough on Qatar, Soros: UK & EU may remarry, Morgan Stanley moving to Frankfurt/Dublin, Biotech on fire, FX option ruling EURUSD, USDJPY, Bonds on summer vacation)

Short recap

Asia flat

Europe opening lower

Tough conditions for Qatar to comply within 10 days

Will spur the risk off

Carlyle Group – Fed to keep hiking, no problem from higher rates

Soros on "Brexit In Reverse" - if all goes well UK & EU may remarry even before divorce  link

North Korea firing again

Equities

Morgan Stanley to move EU HQ and broker-dealer operations to Frankfurt and asset management to Dublin

Airbus & Boeing to face competition from RU, CN and JP in the future

Qatar Airways looking to buy 10% of American Airlines

US House not happy with Deutsche Bank’s rejection to share information about Trump’s finances with respect to Russia investigation

Biggest US banks passed the stress test

Biotech on fire without any particular reason

Index breaking through strong resistance

Few names to check: Gilead Sciences, AbbVie, CSL, Biogen, Amgen, Shire, Genmab, Celgene, Regeneron, Vertex, Alexion, Incyte (first three worth of looking at)

BlackBerry reporting Q1 earnings with focus on turnaround

Bombardier cutting more than 2k jobs in GE

Tesla to build a factory in China

Foxconn planning a USD 10 bln display factory in US

Bonds

10-yr Trys yield at 2.16% - not reacting to Bullard, more focussing on balance sheet reduction

10-yr Bund yield at 0.26% - no change from yesterday

EURUSD

No clear direction

Still stuck close to large option expiries strike levels within 1.1100-1200 range

Next week there are not that many, so we should be able to see a bit more moves

Expiring today EUR 1.97 bln at 1.1190-1200

Market watching interest rates differentials and ECB/Fed speakers

Next resistance at 1.1187 (23.6% Fibo)

10 DMA at 1.1175

Gold

Consolidating towards 1255 (50.0% Fibo)

Support from 100 DMA at 1249

Seen some risk off flows from energy

As prices of oil are very vulnerable on OPEC (in)action

Data/Events

ECB’s Draghi at European Council meeting

Fed’s Bullard (1515 GMT)

Fed’s Mester (1640 GMT)

Fed’s Powell (1815 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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May 24, 2017 - Market Update

Short recap

Asia effected by China downgrade

Europe opening lower

Markets shifting focus from risk off set up to June FOMC meeting

1^st Trump budget sent to Congress, being ignored as such?

Moody’s downgraded China to A1 from AA3, outlook to stable from negative

On the back of debt burden and its implications on public finances, and slowing growth

Only 12% of debt owned by foreigners, should not send shock waves across EM

Bernanke – BoJ should coordinate fiscal spending plan with gov to reach 2% inflation

While staying debt neutral

US housing on track

Equities

Bunge declined any talks with Glencore 

FiatChrysler officially facing an emission cheating legal action

Apple and Nokia friends and in love again, Apple looking to buy more from Nokia

Or more tighter partnership coming? Health, patents, royalties…

Shell selling its stake in Canadian Natural (CAD 4.1 bln)

Cyber security demand pleasing BlackBerry

McDonald’s to face some protests about wages, unions

HP should benefit from more stability in PC market and effects of restructuring

Bonds

10-yr Trys yield at 2.28%%

10-yr Bund yield at 0.41%

Market getting more comfortable with June rate hike (probability of 78%, two more hikes this year probability at 43%)

As the yield in 52-week bill auction comes to 1.145%, highest since 2008

And 2-yr note at 1.316% (strong auction) highest since 2008 (May 10 high at 1.360%)

EURUSD

US yields helped USD

Still need a deeper break of 100 HMA at 1.1182

Support clinging around 1.1160 with orders sitting there

But market is looking at 1.1100 now

Market keeps speculating about ECB change of rhetoric at June 8 meeting

Despite recent speeches by officials - not open to such thoughts: QE taper first, then rate hikes

USDJPY

Offers likely above 112.00 (38.2% Fibo at 111.98 and USD 2.6 bln option with strike at 112.00 expiring today)

Ichimoku at 111.81, bids likely below 111.70

50 DMA at 111.32 and 50% Fibo at 111.24 acting as support

Iron ore down approx. 7% on China downgrade

While its inventories keep rising in China

Prices hitting the lows of the cycle, negatively impacting AUD as well

Crude oil

Oil remains bid but further rise is limited due to US shale and slowing China

Crucial whether the potential cut is also on export side, not just in production

Upcoming

ECB’s Praet (0830 GMT)

ECB’s Draghi (1245 GMT)

Fed’s Kaplan (2200 GMT)

Fed’s Kashkari

FOMC Minutes – to bring a bit of hawkish tone as Fed feels that Q1 data were transitory

Minutes remind market that Fed is on the watch list going to June meeting again

Focus on interpretation of inflation, taper strategy and job market (slack/no slack)

Thu – OPEC/Non-OPEC meeting

OPEC meeting 0800 GMT

OPEC/Non-OPEC meeting 1300 GMT

OPEC Joint press conference 1500 GMT

Full schedule  link

Expect headlines as attendees arrive

Fri – G7 meeting

May 31 – former FBI director James Comey to testify before Senate

June 8 – ECB meeting

June 8 – UK elections

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

June 13/14 – 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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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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