Feb 9, 2018 - Market Update

European equities seem to be in a quite and cautious mood today after yesterday's red day. US futures are up a what gives additional comfort to the market is also the calm in FX. Bonds are getting slightly sold but yields are not moving very high.

It is an interesting situation when stocks got sold off heavily over the last two weeks but bonds and FX were not significantly impacted. In other words, there was no direct rotation out of stocks to bonds, what may be seen as a profit taking in stocks only as bonds barely moved.

Bond yields remain elevated but not spiking or moving rapidly higher. JPY is a proxy of safe heaven flows is offered today but seeing a bit of unrest in EM space. Let's see what will come up with US open and where we close tonight.

At he moment, despite lots of cautious about another wave of algos and systematic investors selling to adjust to their portfolios based on risk/volatility inputs we see currently S&P 500 around 2600/10 level and DAX around 12 100/200 as good points to re-enter the market to benefit from FOMO flows that may eventually start even today.

But bear in mind to manage your risk appropriately also in the light of upcoming weekend, especially if we do not see the US stocks moving higher on FOMO flows. If that happens, we can also get ready for another Monday risk off sentiment behaviour as there is still lots of moving sitting in selling volatility related products.

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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Jan 25, 2018 - Market Update (Trump up, Mnuchin down but market is concerned about who will buy US debt; ECB - just up is a problem but Draghi likely not to say anything again); EURUSD set to check 1.2500; Weaker USD good for equities; Gold - make or brake the 1380, then 1484...?; BofA with most blockchain patents; Qualcomm fined USD 1.2 bln by EU; Mexican drug cartels stealing fuel

Short recap

Asia mixed to lower

Europe opening lower

Trump a year ago – USD strength means confidence in US and his presidency

Mnuchin yesterday – USD weakness good for US economy

…and market took it as a future direction of US policy

In other words the US trade war has begun and weak USD is part of it

Market is concerned about widening current account deficit (a problem for USD)

But bigger one is that there are still less and less international investors who like to buy Trys

IMF’s Lagarde – USD value determined by markets

Bitcoin buyers getting more ground

China to tighten control over offshore private equity fundraising

Mexican drug cartels stealing fuel from refineries (USD 1 bln of lost government revenues)

ECB today

Lots of speculations about policy shift – not expecting any change, may be some word playing in March

Recent move in EUR creating some headaches for ECB as inflation levels still low

Unlikely ECB will come up with something hawkish, we need to wait until summer

So growth and inflation have more time to surprise

Draghi to touch FX rates with dovish comments after recent rise in EUR

EUR not overvalued

S&P – strong EUR to delay tapering

EURUSD

USD still under pressure with psychological 1.2500 in sight

Likely to test important 1.2516 (38.2% Fibo of 1.6038/1.0340 move)

Then 1.2597 (61.8% Fibo of 1.3992/1.0340 move)

Support from descending trendline (highs 2008, 2011, 2014)

The 1.2400 may help to push some longs off, to open door towards 1.2300-90 zone

1.2166 (50.0% Fibo), then 1.2092

USDJPY

Interest in USD from importers and retail after o/n decline

Bids sitting at 108.50

Large options (USD 2.3 bln) with strike at 110.00 expiring today

Support 109.06 (76.4% Fibo) and 108.12 & 107.31 lows

Resistance 110.14 (61.8% Fibo)

Equities

Lower USD = higher global equities for time being…

As we have easier credit conditions

And profits of US companies artificially higher due to weaker USD

BofA owning more blockchain patents than peers

SEC looking into GE’s huge insurance charge

Company planning to sell USD 20 bln of assets

Goldman Sachs and Citibank shortlisted to bid for metal business of Scotiabank

EU fines Qualcomm (USD 1.2 bln)

Bombardier and Boeing to hear decision over dispute on Friday

Earnings

Reporting today: Biogen, 3M, Caterpillar, Intel (update on security issues), Western Digital, Celgene, Starbucks

Bonds

10-yr Trys yield at 2.64% vs 2.62% yesterday

10-yr Bund yield at 0.58% vs 0.56% yesterday

No boom to doom for central Europe's bonds when ECB stimulus ends  link

Gold

Facing strong resistance zone where it got rejected in 2014/16/17

Mnuchin, weak USD, inflation up, geopolitical risks supporting gold

More investors using gold as a hedge for potential spike in volatility

With HFs aggressively buying since Dec

Resistance 1375 high, 1380 (38.2% Fibo), 1484 (50.0% Fibo) both based on 2011/15 decline

Source: Saxo Bank 

Data/events

ECB rate decision

Jan 26 – Trump speaking in Davos (1300 GMT)

Will be interesting to see Macron/Merkel and the world

Against protectionism of Trump/US

Jan 30 – US State of the Union

Trump to announce an infrastructure plan but is not clear who would build the infrastructure

Because of his anti-immigration policies, may be Norwegian workers

But having no idea how many of them will come

Also to announce a new security policy moving away from fighting terrorism

And focussing on challenges from growing military strength of Russia and China (more military spending coming)

Jan 31 – FOMC

Feb 3 – Powell taking office as Fed Chair (he is lawyer and not economist)

Feb 16 – Chinese New Year

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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Jan 18, 2018 - Market Update (Apple with USD 38 bln tax bill, bringing home USD 250 bln; Renault-Nissan a king over Volkswagen; Goldman Sachs dropping bond trading?; GE still on short side; Junk bonds spreads at record lows, China/Japan getting rid of Trys - nothing new; USDRUB floor between 55.70-56.00; Brent having hard time to stay above USD 70 mark; Biggest Bitcoin mines in China)

Short recap

Asia hitting record levels

Europe opening higher on bullish sentiment from US and Asia 

China growing too fast with respect to economic and pollution standards

Trump fighting back China with intellectual property breaches (likely getting ready for Davos)

Loud calls for EZ reform with new fiscal rules (GE) and joint safe assets (FR)

Equities

Cyber security start-ups having hard time

As very crowded market is moving fast and facing criminal predators, competition is a tough job

Volkswagen produced 10.7 mln cars last year

But the crown goes to alliance of Renault-Nissan though

Peugeot looking to come back to US market using know-how of Opel

Chinese interested in diabetes business from Johnson&Johnson (USD 3-4 bln)

Apple planning to open 2^nd Campus in US that is a part of 5-yr USD 30 bln investment package

And also repatriate USD 250 bln of overseas cash, thus paying USD 38 bln of taxes

Looking to create 20k jobs in US, focussing on data centers for iCloud, AppStore and Apple Music

Earnings

Goldman Sachs hit by a drop in bond trading

What makes question marks about keeping bond trading in current form

Or searching for new profit generating activities

Adjusted profit beat expectations but company is having harder time in trading than rivals

GE shares keep declining on USD 11 bln of charges and likelihood of a breakup

…already touched the GE story: Nov 15, 2017 – Story of the Week: Comparing old and new economy…General Electric and Tesla  link

Morgan Stanley, Bank of New York Mellon, IBM, AMEX reporting

New US corporate tax cut should help earnings to be revised higher

Bonds

10-yr Trys yield at 2.59% vs 2.56% yesterday

10-yr Bund yield at 0.57% vs 0.55% yesterday

Not only China but also Japan is lowering their Trys holdings  link

Back in 2004/05 both China and Japan held 50% of all Trys held by foreigners

And now they do 36% only

Junk bonds - The Great Credit Dilemma: When to Quit After Historic Rally?  link

Corporate bonds too expensive to own, but too valuable to sell

Schroder, Aberdeen fund managers plot exit strategies

USDRUB

Rising oil makes Russian officials not comfortable with strong RUB

As we saw back in 2017, they are quite good at defending certain levels

Support at 56.20 and 55.72 (Apr 2017 low)

Resistance at 56.73 (10 DMA), 56.76 (Sep/Oct 2017 lows), 57.20 (23.6% Fibo)

USDRUB weekly

Source: Saxo Bank

Crude Oil

Supported by decline in private inventories in US

And attacks from rebels in Nigeria

EIA inventories and OPEC Monthly report out today

With speculations about another decline in oil stocks and substantial rise of shale production

Brent having difficulties to stay above USD 70 level

Support 69.06 (10 DMA), 68.19 (23.6% Fibo), 66.84 (38.2% Fibo), 64.91 (50 DMA)

To watch the 66.84 key level

Source: Saxo Bank

WTI

Support 63.15 (10 DMA), 62.75 (23.6% Fibo), 61.43 (38.2% Fibo), 58.77 (50 DMA)

Source: Saxo Bank

Bitcoin miners locations

…or where is the cheap electricity and smart people are…

Data/events

ECB’s Weidmann (0800 GMT)

ECB’s Coeure (1430 GMT)

ECB’s Villeroy (1730 GMT)

Fed’ Mester (2305 GMT)

IMF’s Lagarde to speak today as well

Jan 19 – US fiscal deadline

Jan 23-26 – Trump in Davos with his crew

Will be interesting to see Macron/Merkel and the world

Against protectionism of Trump/US

Jan 23 – BoJ – any hints on potential taper?

Jan 25 - ECB

Jan 30 – US State of the Union

Trump to announce an infrastructure plan but is not clear who would build the infrastructure

Because of his anti-immigration policies

Jan 31 – FOMC

Feb 5 – Powell as Fed Chair

Feb 16 – Chinese New Year

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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Jan 11, 2018 - Market Update (Crytpos getting hit in SoKo, Chinese like Trys anyway, 10-yr Trys yields holds above 2.50% despite China/BoJ, USDJPY looking towards 110.00 ?, VIX above 10 but still very low, Bayer hoarding cash by selling more Covestro, Aramco seeking cheap loans ahead of IPO, PIMCO to buy more Trys on recent weakness, SNB with profit of USD 55 bln)

Short recap

Asian in red as stocks getting nervous, VIX above 10

Europe opening lower

Cryptos – SoKo preparing a trading ban, tax authorities cracking on some exchanges

China – halt of Trys buying based on wrong info (I like it as some made a nice money..)

US attacking NAFTA, opting for more protectionism

While French Macron signing nice contracts in China

Equities

Volatility still remains low but that can change quickly

As markets may get nervous at current record levels

Will get more hints from Q4 earnings season kicking off 

Earnings may be irrelevant to some extent and investors will be more interested in discussing:

US effective tax rates, CAPEX outlooks and buybacks/dividend payouts

…what about positioning ourselves in cash, gold and bonds without any equity link in 2018?

Bayer selling bigger stake in Covestro (EUR 1.5 bln) to hoard the cash

Intel may go short on security issues against its competitors

Aramco seeking cheap loans before IPO

Canada speeding up Basel rules implementation

Likely this year

PIMCO may buys some US Trys on the recent weakness

Berkshire Hathaway moving higher on Buffett’s succession moves

By adding Abel, Jain to the board

SNB with USD 55 bln profit in 2017  link 

From its USD 800 bln holdings of US/EU stocks, bonds and gold

Bonds

10-yr Trys yield at 2.53% (printing high at 2.59% yesterday)

Surprisingly staying above 2.50% level despite China denouncing halt of Trys purchases

10-yr Bund yield at 0.47%

Spikes in US 2-yr and 5 yr yields were translated yesterday into 10-yr Trys/Bunds as well

Chinese slowdown or hald of Trys purchases and speculation about BoJ taper were the main triggers

Investors look at US inflation linked bonds as economic growth, rising oil and commodity prices

Are likely to spur inflation

BoJ keeps bond buying unchanged despite news from yesterday 

EURUSD

Resistance at 1.1962 (23.6% Fibo), 1.1994 (10 DMA), offers sitting above 1.2000

Support at 1.1915, 1.1831 (10/50 DMA)

Source: Saxo Bank

USDJPY

111.71 (200 DMA) may act as a support for correction higher

112.00 again in sight but seller sitting here

Resistance at 111.89 (38.2% Fibo), 112.24 (100 DMA) and 112.37 (Ichimoku)

The potential rally should fade here as well

JP investors like US yields but unhappy with recent moves in JPY

Chinese Trys plans and BoJ potential tapering as themes fade away

BoJ hates volatility – likely to keep all under control as they proved with no change to JGB buying today

Interesting to see USDJPY not bouncing higher after China/BoJ today and higher Trys yields?

One may think that further JPY strength is to come…

Support at 111.02 (50.0% Fibo), then 111.26 and 110.83 (short specs may bail out here)

And we can see a dip to 110.14 (61.8% Fibo) with psychological 110.00 level next

Source: Saxo Bank

Gold

After consolidation on rising yields higher

As the news about China slowing down/halting Trys purchases and BoJ potential tapering (resulting in stronger JPY/weaker USD) pushed gold higher

Still feels support from stocks in red and rising physical demand from China

But need a correction before moving higher again

Support at 1314 (10 DMA), then 1300 and 1290 (100 DMA)

Resistance at 1321 (23.6% Fibo)

Source: Saxo Bank

Data/events

Fed’s Dudley (2030 GMT)

Eurogroup president speaking about future of EZ (1630 GMT)

Jan 19 – US fiscal deadline

Jan 23-26 – Trump in Davos

Jan 23 – BoJ – any hints on potential taper?

Jan 25 - ECB

Jan 30 – US State of the Union

Jan 31 – FOMC

Feb 5 – Powell as Fed Chair

Feb 16 – Chinese New Year

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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Nov 15, 2017 - Market Update (Xi to visit NoKo one day, Mohammed El-Erian a new Fed vice-chair?, Stocks not comfortable with no new catalyst, GE story, Airbus – a new USD 40 bln order?, Volkswagen and police/tax authorities again, Loxo partnering with Bayer, US yield curve flattening despite 2-yr yield hitting a 9-yr high, EURUSD - forget about H&S, looking at 1.1900, USDJPY to dip below 112.00)

Short recap

Asia in red but BoJ active in ETF buying

Europe opening lower

Special envoy from China heading to NoKo on Nov 17

Central bankers talking about an end of easy money

Mohammed El-Erian a new Fed vice-chair?

Risk bubbles rising across EMs:

Military taking over in Zimbabwe, where is Mugabe?

Venezuela defaulting, South Africa to be downgraded

Equities

Stocks not comfortable with no new catalyst, GE story

And getting nervous about upcoming Fed tightening

Airbus – a new USD 40 bln order for 400 planes coming?

Volkswagen having issues with police and tax authorities

Loxo Oncology entering into collaboration with Bayer (USD 1.6 bln)

Biotech firms focusing on using bacteria in cancer research

Bombardier signing a USD 1.1 bln deal with EgyptAir

Earnings

Cisco – expecting decline in revenue from traditional products

Target

Bonds

10-yr Trys yield at 2.36%

2-yr Notes touched a 9-yr high but the yield curve keeps flattening

10-yr Bund yield at 0.39%

EURUSD

Huge H&S reversal is over after breaking 1.1700

Decisive break of 1.1615 (high from May 2016), 1.1649 (200 WMA), 1.1670 and descending trendline connecting the lows of Oct 2008, Jul 2012

Also broke 1.1736 (100 DMA) 1.1785 (50 DMA), 1.1810 (38.2% Fibo of 2014-2015 decline) and 1.1822 (50.0% Fibo)

Next resistance Oct highs and 1.1886 (61.8% Fibo)

 Source: Saxo Bank

USDJPY

Resistance at 113.65 (10 DMA), 113.00, 112.97 (23.6% Fibo),

Support at 112.47 (50 DMA)

Closing below 23.6% Fibo will expose 111.90 (38.2% Fibo), 111.76 (200 DMA) and 111.72 (100 DMA)

Data/events

EU General Affairs Council meeting

Fed’s Evans (0800 GMT)

ECB’s Praet (1000 GMT)

Fed’s Rosengren (2110 GMT)

Nov 28 – Powell before Senate Banking Committee

Dec 13 – FOMC

Dec 14 – ECB

Dec 14-15 – EU Summit talking Brexit

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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Nov 13, 2017 - Market Update (May on the way out, Upcoming 2-3 weeks will shape the form of Brexit deal/no deal, Alibaba on fire with global Singles' Day sales, Uber heading to IPO with Softbank getting closer to the deal, US inflation to show direction for yields, EURUSD back to range 1.1570/1.1670, Gold - long liquidation below 1280 level?)

Short recap

Asia in red as investors becoming cautious on ability of US lawmakers to work out the tax reform

Europe opening higher

South China Sea disputes on again

Upcoming 2-3 weeks will shape the form of Brexit deal

As May is under enormous pressure from her own political party to step down

While EU made it clear that UK needs to honor its commitments (in other words how much they will pay for divorce)

Meanwhile EU getting ready for no agreement with UK

As UK not open to offer any new divorce figure

Equities

Alibaba on fire with Singles’ Day sales up 39% y/y hitting USD 25 bln globally

Uber heading to IPO at certain point with Softbank getting closer to company with USD 10 bln deal

PSA to build cars in Algeria

Visa sees a cut in UK spending

Soros, Tepper, Einhorn, Icahn to issue a regulatory fillings Mon/Tue

A nice reading that will show the changes their stock/asset holdings

Earnings

Home Depot, Tencent, Cisco, Applied Materials, Target, Best Buy, Wal-Mart

Bonds

10-yr Trys yield at 2.39% vs 2.34% on Friday morning

10-yr Bund yield at 0.41% vs 0.37% on Friday morning

US CPI & US Retail sales on Wed two of last major data ahead of Dec Fed hike decision

Especially inflation will have significant impact on yields

EURUSD

Still consolidating, no decision on H&S

Consolidating above 1.1605 (50.0% Fibo), 1.1615 (high from May 2016), 1.1623 (200 HMA), 1.16256 (10 DMA)

And below 1.1649 (200 WMA), 1.1670 and descending trendline connecting the lows of Oct 2008, Jul 2012

What’s next? Any continuation of 1.1570-1.1670 range?

Source: Saxo Bank

USDJPY

Bids sitting below 113.25, larger seen at/below 113.00

Offers seen ahead of 114.00 with stops above

Resistance at 113.79 (10 DMA), 114.40/50

Support at 113.00, 112.97 (23.6% Fibo)

Gold

Back to mid-range also with the help of 4 mln ounces sell order on Friday

Ongoing no major upside interest can turn into longs liquidation below 1280

US bond yields higher having greater impact than potential delay in US tax reform or Brexit developments

Even the uncertainty in Middle East doesn’t seem to have a big impact for now

Resistance 1277 (10 DMA), 1278 (100 DMA), 1281 (50.0% Fibo), 1293 (50 DMA)

Support 1263 (61.8% Fibo/200 DMA)

 

Source: Saxo Bank

Data/events

ECB’s Constancio (0900 GMT)

ECB’s Nowotny (1600 GMT)

BoJ’s Kuroda (1745 GMT)

EU Foreign Council meeting

Tue

Fed’s Evans (0805 GMT)

ECB’s Lautenschlaeger (0900 GMT)

Fed’s Yellen (1000 GMT)

BoJ’s Kuroda (1000 GMT)

ECB’s Draghi (1000 GMT)

Fed’s Bullard (1315 GMT)

ECB’s Coeure (1330 GMT)

Fed’s Bostic (1805 GMT)

Nov 28 – Powell before Senate Banking Committee

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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Nov 8, 2017 - Market Update (EURUSD - H&S almost done, US yields not supporting further USD strength - a correction coming?, Oil - China demand lower on pollution cuts, Gold stuck in 1263-1282 range, ECB Governing Council meeting - watch the comments as more hawks on the Board, Apple - EU asked for more details about tax structure, Bitcoin an asset class?)

Short recap

Asia up

Europe opening lower

Trump in China to ask for China cutting financial ties with NoKo

US-Chinese companies signed USD 9 bln deals

USD impacted by headwinds/slowdown related to tax reform (implementation in 2019)

As the tax cuts will spike the budget deficit and will have only temporary effect on the economy (according to Fitch)

Brexit - EU preparing tough transition terms for UK (duration, scope and obligations)

According to CME Bitcoin is a new asset class, not crypto currency

ECB caught by bad loans in Italian banks

More leaning towards hawkish side what may support EUR

Equities

Apple – EU asked for details about tax structure

Monte dei Paschi in profit after some one off items (Q3)

Qualcomm-Broadcom merger under Chinese scrutiny

Valeant profits up

Funo (BoJ) – Japan stock prices not overheating, reflect global investments and corporate earnings

Nikkei 225 close to level last seen in 1992 on relatively low valuations, profit growth and weak JPY

Are US stocks too high?

As mentioned few days ago, the sentiment index (bulls/bears ratio) is close to 1987 highs what may be seen as bears completely giving up. Would feel like there are no more bears left to be converted to bulls and push the market higher. What’s next?

Yes, the valuations (S&P 500 with 19x forward PE) are high but we need a trigger. Is it going to be a weakness in US economy or substantial increase in rates? We believe that missing higher yielding alternatives than dividends are behind all low volatility and investors not caring. Of course US companies do well from earnings and revenue perspective but we truly lack an alternative. Even thought Fed is on a hike path, the bond yield remains flat, thus not attractive enough to trigger a cyclical rotation of capital.

Techs (lately Apple) do support the rally heading towards Christmas. A small correction or hesitation may come on the back of Trump tax reform hurdles. US macro is good, EBITDA at higher than in 2007, revenues growing almost 11% y/y as weaker USD gave a hand.

S&P 500 - we see a divergence on a daily chart, moving higher in a narrow channel and any decisive break up/down can start the correction.

Volatility is at extreme lows again prompting a China story from Aug 2015 to our minds. If you feel so, check this out…

 Warren Buffett’s favorite market metric suggests investors are ‘playing with fire’  link

 …and you may get some chips off the table now.

Bonds

10-yr Trys yield at 2.31% - very low, not lending any support to USD vs EUR, JPY

10-yr Bund yield at 0.33%

Periphery saw rally yesterday with Bunds almost unchanged

IT/PT to Bunds spread keeps declining

EURUSD

USD on negative, not helped by low US rates

As the yields remain low, USD need positive news from data or tax reform effort

Otherwise the recent USD rally is due for correction

H&S formation almost complete, Bear sitting above 1.1600 level

Resistance at 1.1595 (55 HMA), 1.1605 (50.0% Fibo), 1.1615 (high from May 2016), 1.1623 (10 DMA), 1.1658 (200 WMA), 1.1670 and descending trendline connecting the lows of Oct 2008, Jul 2012

Support at 1.1550, 1.1500, 1.1490 (61.8% Fibo)

USDJPY

Heavy activity expected above 114.00

As there are bids from lows and above 114.00

Nikkei 225 to test 23 000 level

Goldman Sachs looking to invest in Japan

Resistance at 114.40/50

Support at 113.82 (10 DMA)

Source: Saxo Bank

Oil

Crack on corruption and fight for power a new daily norm in Saudis

Speculative demand for front end contracts (backwardation) drives oil higher

While sellers sitting on sidelines and supply unaffected

Be aware that this speculative longs may create a misleading feeling about market tightening

Geo political risks to support oil further along with likely OPEC cuts extension

Overnight corrected on lower China imports as country is reducing production due to pollution over winter months

EVs can create a plateau in 2030

Gold

Stuck between 1263 (61.8% Fibo) and 1282 (50.0% Fibo)

Sitting above 1277 (100 DMA) with further level of note 1300/1306

Which may be in focus once 1282 is broken and net sellers turn to buyers

Data/events

ECB Governing Council meeting

To watch any comment as more officials lean to hawkish side

Are US rates dependent on the height of the Chair? Enjoy...  link

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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Oct 26, 2017 - Market Update (ECB day today but should they do anything?, Turkish CB in the spotlight too, EURUSD range 1.1660-1.1860/1.1900+, Airbus-Bombardier deal a China story?, Brazil yields up on elections risk, VIX to loo for too long - recall the Aug 2015 China blow...)

Short recap

Asia flat

Europe opening flat

China going for USD denominated bonds again (first issue from 2004)

ECB day today - lots of uncertainties around QE cut back (low inflation, strong EUR vs growing economy)

Still not clear whether ECB should do it today or not

A Turkish Central Bank announcement important today

As there are speculations about Germany (EU) to cut funding for Turkey

Equities

GaxoSmithKline likely to boost their consumer health business via acquisitions

Airbus deal with Bombardier might have had more to do

With technology and production shift to China than with Boeing

As some Chinese investors were looking at Bombardier as well

Earnings

Microsoft – expecting higher revenue on cloud business

Alphabet – expecting higher revenue on mobile, YouTube, Play Store and cloud

Intel – to benefit from stable PC market and very good growth from data centers

Amazon.com – retail and cloud should help while new markets and acquisitions weight

Ford – question is how the weak sales in Europe and Chine effect the results

Planning to cut USD 14 bln and focus more trucks and electric/hybrid cars

Newmont Mining – market is looking at higher revenue on more effective production of gold

Teck Resources – expecting a nice surprise on higher prices of coal, zinc and cooper

Bonds

10-yr Trys yield at 2.43%, above technical 2.40% level

10-yr Bund yield at 0.48%

Brazil – the yields highlight upcoming volatility before next year’s presidential elections

Stocks at records highs, BRL is stable but investors are getting nervous whether new president

Will keep up with reform process

VIX

What a nice ride for all of those who bet on falling risk

But…things may change, be aware of that

As the Chinese blow out from Aug 2015 shows

What about VIX spiking again 96% ?

Source: Saxo Bank

EURUSD

Easy hawkish surprise but difficult to sell the market dovish view

Draghi to have a hard time to talk down EUR based on ongoing price action despite higher US yields

Saw some short covering going to ECB & because of new question marks appeared around US tax reform

Markets expect dovish taper

See range of 1.1660-1.1860/1.1900+

Resistance at 1.1850 (50 DMA), 1.1862 (23.6% Fibo)

Support at 1.1793 (10 DMA), 1.1783 (200 HMA), 1.1750/60, 1.1720 (38.2% Fibo)

USDJPY

Selling interest above 114.00

Huge expiring options with strikes 113.50-80 and 114.50/115.00

Bids a 113.50, more towards 113.00 with stops below

Support at 112.99 (10 DMA)

Trading around descending trendline after getting close to recent high at 114.50 from July

Gold

Taylor or Powell ? Taylor can make a hit on gold

As he favours quicker rate hikes and return back to normal

Resistance at 1281 (50.0% Fibo), 1285 (10 DMA)

Support at 1275 (100 DMA)

Data/events

ECB (1145 & 1230 GMT)

Fed’s Kashkari (1430 GMT)

Fri

ECB’s Praet (0715 GMT)

Trump announcing a new Fed chair

Nov 1 – FOMC

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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Oct 12, 2017 - Market Update (FOMC Minutes - debated inflation, JPMorgan & Citigroup reporting, Goldman Sachs back to investment banking?, EURUSD above 1.1830, heading to 1.2000 but..., CZK on the horse, Gold - which way now?, Homework time for Catalonia until Monday)

Short recap

Asia up reaching 10 yr high

Europe opening flat to lower

Spain gave until Monday Catalonia to drop independence

Otherwise will take over all powers over the autonomy region

Oil inventories rising even though OPEC is cutting production

FOMC Minutes – inflation debate intensified

Some patience to assess inflation path warranted

But others are looking at Dec hike

Doves and Hawks at Fed  chart

Repatriation tax rate at 10% according to Trump

Equities

A bit of reminder of .com area – A Biotech Company Changed Its Name to ‘Riot Blockchain’ and Its Stock Is Surging  link

Japanese equities may still look interesting but don’t forget that BoJ is still active in the market

Better days for banks ahead?  link

May get support from rising rates that will translate to higher profit margins

Citron (short seller) – looking to publish more of their research on Shopify

JPMorgan – should report a bit better results, focus on trading and loan business

Citigroup – expecting slight disappointment earnings

BlackRock enjoying the bull run as index investors take the AUM to USD 6 trln

Goldman Sachs looking to return to investment banking as it is looking for new deals

Bonds

10-yr Trys yield at 2.34%

10-yr Bund yield at 0.46%

Wealth manager warns on bond markets creating the 'biggest financial crisis of our lifetime'  link

Are bonds ready for a quick reversal as central banks look to remove QE?

Bond markets are at certain point illiquid

Guessing that ECB knows this one better as they have sometimes troubles to find suitable available bonds to buy

EURUSD

Catalonia is over for now, markets turning attention back to EZ macro

Back above 1.1830, opening the door for 1.2000

Resistance at 1.1910

Support at 1.1862 (23.6% Fibo), 1.1845 (100 DMA)

USDJPY

Resistance at 112.61 (10 DMA), 112.70 (Ichimoku turning line)

Support at 111.89 (200 DMA), 111.85 (23.6% Fibo)

EURCZK

CZK on the rising wave, now below 26.00

Resistance at 25.88 (10 DMA), 25.97

Support at 25.47

Bear in mind that it is still too early read the charts after CNB 27.00 floor adventure

But at least weekly chart can give us some clues where we are heading to

CNB sitting on tons of foreign reserves and now losing money

Some politicians calling for joining EUR

General elections taking place on Oct 20-21

 Source: Saxo Bank

Gold

Resistance at 1295/96 (highs), 1297 (50 DMA), 1299 (38.2% Fibo)

Support at 1281 (50.0% Fibo)

Source: Saxo Bank 

Data/events

ECB’s Draghi (1430 GMT)

ECB’s Praet (1430 GMT)

Fed’s Brainard (1430 GMT)

Fed’s Powell (1430 GMT)

ECB’s Coeure (2000 GMT)

ECB’s Lautenschlaeger (2010 GMT)

Fri

Fed’s Rosengren (1230 GMT)

ECB’s Constancio (1415 GMT)

Fed’s Evans (1425 GMT)

Fed’s Kaplan (1530 GMT)

Fed’s Powell (1700 GMT)

Oct 18 – China National Congress

Oct 22 – Japanese elections

Oct 26 – ECB

Nov 1 – FOMC

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 4, 2017 - Market Update (UN meeting on North Korea, Little risk in FX world warranted, EU/China economies to cool down, FiatChrysler declining and takeover offer, Merger completed, new DowDuPont is alive, Highly rated corporate bonds to benefit, Bund yields may go again to zero, EURUSD - Attempts above 1.2000 to hit the heavy resistance, USDJPY - ceiling at 110.00, Gold - eying 1375)

Short recap

Asian in red on safe haven flow

Europe opening lower

US/CA Labor Day holiday today

UN Security Council to meet on North Korea

US Secretary of Defence Mattis joining Trump in his rhetoric (not a good sign)

Little risk in FX world warranted

Despite North Korean likely not to escalate situation further as it hit the ceiling with hydrogen bomb test (50 KT)

Oil supplies to North Korea likely to be cut off

Brexit no deal outcome at 25% probability

Moscovici (EU) – strong EUR not a threat to EZ firms

Trump looking to withdraw from free trade deal with South Korea

Another strong hurricane Irma creating

EU/China economies to cool down too after US growth eased

Equities

US stocks printed new highs on Fri

Volkswagen recalling 1.8 mln vehicles in China

FiatChrysler declining and takeover offer

Legend Hodlings buying 90% of Banque Internationale a Luxembourg (EUR 1.5 bln)

Dow and DuPont merger completed (USD 130 bln)

Historically, Sep not a perfect month for S&P 500 with most of the time ending in red

Bonds

10-yr Trys yield at 2.16% - finally picking up

10-yr Bund yield at 0.38%

Highly rated corporate bonds to benefit either from dovish ECB or escalation of tensions

As Bunds may hit again zero level yield range

COT report as of last Tue

EUR longs at 87k vs 88k week before – after hitting the high in EURUSD, spot moving lower could put additional pressure on long speculative positions and spark selling

JPY shorts at 69k vs 74k week before – USDJPY hitting the lows, some relief for JPY shorts may be in sight

GBP shorts at 52k vs 46k week before

Overall net short USD positions making new records since 2013

EURUSD

EUR may act as a safe haven currency, small bias higher

Attempts above 1.2000 to hit the heavy resistance

USD did well going to close despite a bit weaker NFPs

As the ECB is very concerned about EURUSD level & pushing any taper talks to Dec

If no geopolitical events, may revisit 1.1700/50 area

Resistance at 1.1910, 1.1980, 1.2071

Support at 1.1885 (55 DMA), 1.1878 (10 DMA), 1.1845 (23.6% Fibo)

Real yield differentials pointing to significantly overvalued EUR

USDJPY

Gap down after nuclear test recapped back later

110.00 a ceiling due to risks

Expiring option (USD 800 mln) at 110.00 to cap the flow as well

Gold

Well supported by general safe haven flows

On the back of North Korea, US-Russia diplomatic war, US debate over tax and debt ceiling

Topped by dovish Fed

Resistance in sight at 1375

Strong support at 1300/10

Data/events

ECB’s Mersch (0740 GMT)

BRICS’ summit starting today in China

Tue

Kashkari (Fed)

Kaplan (Fed)

Brainard (Fed)

Thu

Mester (Fed)

Dudley (Fed)

ECB – Draghi to address a strong growth and low inflation vs still rising EUR

ECB is very concerned about EURUSD level & pushing any taper talks to Dec

Expecting dovish ECB with no hawkish surprise at all

Draghi to talk down EUR

Let’s get ready for low yield for longer period (not only from ECB)

Economic growth not impacted by strong EUR yet

Fri

Harker (Fed)

Sep 19-20 FOMC

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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