Oct 20, 2017 - Market Update (US Senate moving on budget, US jobless claims hitting multidecade low - positive on spending/GDP/inflation/USD, Catalonian bank run, S&P 500 tested the support around 2544/40, Earnings to set the tone for today's trading, Schlumberger results important for correction in energy stocks)

Short recap

Asia up after some hesitation at the beginning

Europe opening higher

US Senate moving on 2018 budget, next step towards tax reform

US jobless claims hitting multidecade low what means more people working, more money for spending

As consumption is 60% of US GDP, we can see in the future higher GDP growth pressuring up inflation

Merkel positive on Brexit progress but not at the stage to move to trade talks

Catalonian separatists supporting bank run what may send shockwaves across equity markets in Europe

BoJ’s Kuroda – to continue with powerful QE

Equities

Stocks had a test day yesterday on Catalan risk, speculations about high valuations and weaker earnings

Bias still negative today – a correction before weekend coming? Well, depends on earnings now…

S&P 500 tested the support (now around 2544/40) with resistance between 2573/75

But US Senate move with 2018 budget to reflect positive in today’s session

Apple hit by weak demand for iPhone 8

Greek banks Piraeus, National and Alpha looking to sell EUR 5.5 bln of bad loans

Nestle beefing up restructuring cost

Earnings

Weak in Europe – a strong EUR an issue or what?

Not stellar in US with slow revenue growth – are investors going to punish companies with sell off?

On the other hand low bond vs dividend yields still supportive for equities

Today: Daimler (disappointed), GE, Schlumberger, P&G, Honeywell

Energy market will focus on Schlumberger as any disappointment in outlook

Can translate into energy stocks correction that is already sitting on support

Little bit of perspective of Black Friday sell off in Oct 1987:

Few words as well…  link

  

…and back to today’s reality:

If all market participants are buying, there is no bear that can get converted to bull

If it is the case, there are no other buyers left…

  

But still some thoughts from Warren Buffett – video (49 min)

Bonds

10-yr Trys yield at 2.36%

10-yr Bund yield at 0.39%

EURUSD - ready to correct big time and trading below parity? Next week's ECB holds the key as the 2yr Trys-Bunds spread is at extreme  link

  

DXY

200 WMA at 93.05 critical

EURUSD

Expiring options at 1.1800 (EUR 1.5 bln), then 1.850-55 (EUR 1.4 bln)

Likely to range 1.1800/50 today unless we get a surprise…

Resistance at 1.1847 (50 DMA), 1.1862 (23.6% Fibo), 1.1880, 1.1910

Support at 1.1800/10 (200 HMA), 1.1787 (Ichimoku), 1.1750, 1.1720 (38.2% Fibo)

Source: Saxo Bank

USDJPY

Supported by higher yields on US budget news

Resistance at 113.43 with stops sitting above 113.50

To test 114.00, then 114.50 but stops above both levels

Exporters can be seen above 113.50

Support at 112.48 (10 DMA)

 Source: Saxo Bank

Gold

Resistance at 1289 (10 DMA)

Support at 1281 (50.0% Fibo), 1276 (100 DMA)

Source: Saxo Bank 

Data/events

China National Congress (Fri/Sat)

EU Summit (Fri/Sat)

Czech parliamentary elections (Fri/Sat)

BoJ’s Kuroda (0635 GMT)

Fed’s Mester (1800 GMT)

Fed’s Yellen (2330 GMT)

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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Aug 4, 2017 - Market Update (NFPs 183k/Earnings 0.3% expected, US yields reaction to NFPs crucial for USD, USDJPY, Gold, EURUSD above 1.1876 but below 1.1900, Siemens to build wind power plant in Turkey, Goldman Sachs buying USD 10 bln of Aramco's credit facility, Tesla - market betting heavily on Model 3 success, Trump productivity stats)

Short recap

Asian slightly higher

Europe opening lower

Russian case moving with subpoenas issued for Trump’s son and his son-in-law

A new India-China stand off in Himalaya?

Toronto home sales down 40% y/y, 4^th month of decline

Average purchase price is CAD 746k vs CAD 920k in April

Trump should speak on actions against China but the speech may be cancelled

Trump – productivity stats: In the office for 6 months, played golf for 40 days, Congress has passed 0 pieces of major legislation

Equities

Toyota and Mazda entering joint venture building of plant in US (USD 1.6 bln)

Siemens to build wind power plant in Turkey (USD 1 bln)

Seems like money talks and not NATO issues or politics in this case

Tesla up as market is betting on Model 3 success

Enbridge having some troubles with Line 3, rising costs

Goldman Sachs bought part of Aramco’s credit facility (USD 10 bln)

In a push to secure the role in Aramco’s upcoming IPO

Amazon.com spending big time in Hollywood (USD 4.5 bln)

But the profitability of such activities is still questionable

EU is targeting Visa over the fees it charges merchants for payments made  by non-EU customers within the EU

RBS moving the trading desk to Amsterdam from London

Bonds

10-yr Trys yield at 2.23% - down after BoE took no action and downgraded inflation and economic forecast

Reaction to NFPs will be very closely watched

10-yr Bund yield at 0.45%

DXY

According to BAML USD is not that weak as it may seem

Still 10% overvalued vs its long-term equilibrium

And 12% above its 20-year average in real effective terms

Only tax reform and better US data to help dollar

For the time being they respect market momentum until contrarian signs

Strong support zone (92.64 and 91.88) holding, weekly close crucial for further direction

Levels correspond with 1.2000 level in EURUSD

Combined with 200 WMA at 92.37 helped to support USD over the last 2 years

EURUSD

Trading steady going to NFPs

Moved above 1.1876 (low from June 2010) but stayed below 1.1900

Does it mean a correction coming?

Breaking the 1.1900 is important for bullish momentum to continue

Further resistance of 1.1200 more psychological of nature

Support 1.1768 (10 DMA), bullish bias to stay unless 10 DMA is broken

1.1786 (200 WMA) – a weekly close above?

Expiring options EUR 1 bln at 1.1850 strike

USDJPY

As weak ISM Non-manufacturing keeps pressure on USD

NFPs will be crucial for further USDJPY direction

But all will depend on US 10-yr yield reaction to payrolls anyway

Upside limited on weak USD, low US yields

Resistance 110.14 (76.4% Fibo), then 110.97 (61.8% Fibo)

Rising trendline acts as a support

Bids sitting at 109.85

Expiring options USD 1 bln at 109.45-50

Gold

Getting support from weak USD

But saw some position squaring yesterday going to NFPs today

Global demand is down 14% in H1 as the ETFs demand declined substantially

Resistance at 1274 (76.4% Fibo)

Support at 1261 (61.8% Fibo)

Ascending/descending trendline can also be of note

But US yields and USD direction crucial for further moves

Data/events

US NFPs – 183k exp vs 222k previously

Unemployment rate at 4.3% exp vs 4.4% previously

Average earnings at 0.3% exp vs 0.2% previously

Weekly jobless claims steadily falling down, thus pointing to tightening job market in US

More and more industries facing shortage of qualified labor

Aug 24-26 Jackson Hole

Draghi’s show up highly expected in the light of potential tapering

Any clues on EUR 60 bln monthly purchase being taken down o 40…or?

Sep 7 - ECB

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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Aug 1, 2017 - Market Update (Can Trump hit rock bottom? Weidmann – EZ needs a reform, Chinese Anbang Insurance Group to sell overseas assets & bring cash home, Europe experiencing the strongest earnings season since 2017, EURUSD above 1.1785 (200 WMA))

Short recap

Asia slightly up

Europe opening higher

Can Trump hit rock bottom?      

Trump looking at executive action on healthcare

North Korea can hit most of US

ECB’s Weidmann – EZ needs a reform

Oil popped over USD 50 on high fuel demand and HF short covering

While supply still high

Equities

Shell putting a financial hand in solar firm Sunseap Group

BNP Paribas interested in Strutt & Parker

Brexit to increase the needs for capital by 30% and costs by 4% for banks

Trump taking on insurers after Obamacare repeal vote failed again

LabCorp eyeing Chiltern (USD 1.2 bln) to expand oncology activities

Tesla down on “manufacturing hell” as Elon Musk commented the production of Model 3

That may last 6 months until the cash burn ends and company will start to make profits

China asked Anbang Insurance Group (huge insurer) to sell its overseas assets and bring cash home

A sign of troubles coming… More here & here

Earnings

Europe experiencing the strongest earnings season since 2017 with EBITDA at record highs

US doing well too witnessing sales and EPS acceleration

Apple – market is expecting an increase in revenue on the back of higher sales of its smartphones while checking also on a new release if iPhone that may be delayed until Oct

Pfizer – to report higher earnings supported by breast cancer treatment sales. The drag on earnings might be (as of other peers too, the patent expirations)

FireEye, Devon Energy, Under Armour

Bonds

10-yr Trys yield at 2.30% vs 2.28% yesterday

10-yr Bund yield at 0.54% vs 0.54% yesterday

EURUSD

Broad weakness pushed EURUSD higher

Higher EZ inflation making market believe in a hawkish ECB

But looking at Fed not hiking this year again

Support 1.1690 (10 DMA), 1.1785 (200 WMA) – checking what’s going on there

Resistance 1.1200 more psychological of nature

USDJPY

Heavy on USD weakness

Bids at 110.00 (around option barrier)

Also some options (USD 1 bln) expiring around this level

Speculators may be hunting stops below 110.00

Resistance 110.97 (61.8% Fibo)

Support 110.14 (76.4% Fibo)

Data/events

Wed

Fed’s Mester (1600 GMT)

Fed’s Williams (1930 GMT)

Fri

US NFPs – 173k exp

Aug 24-26 Jackson Hole

Draghi’s show up highly expected in the light of potential tapering

Any clues on EUR 60 bln monthly purchase being taken down o 40…or?

Sep 7 - ECB

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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July 18, 2017 - Market Update (Trump not able to deliver anything, EURUSD above 1.1500 but below 1.1600 ahead of ECB, 10-yr Trys yield positioning ahead of FOMC, Gold shorts to get squeezed?, UniCredit selling EUR 18 bln of bad loans, ETFs outflow to trigger next downturn, Citi in Frankfurt)

Short recap

Asia in red

Europe opening lower

After 2^nd Obamacare repeal vote failure

Doubts about ability of Trump administration to deliver anything on the rise

Markets getting more comfortable with Fed slowing its hiking pace and all USD negative Trump news

Since US elections S&P 500 is up 13.7% vs Gold being down 7.7%

Equities

Lufthansa rising profit target on higher summer bookings

UniCredit selling EUR 18 bln of bad loans to Fortress and Pimco

Citigroup picking Frankfurt as EU base for trading and sales after Brexit

Rio Tinto lowering iron ore shipment forecast due to weather and infrastructure upgrade

Cutting fees by BlackRock doesn’t help earnings and getting new cash

But watch the flows to ETFs and passive investments as they may trigger next market decline

FedEx warning about cyber attacks impact on earnings

Valeant close to selling Obagi (USD 190 mln)

Earnings

BofA – market is already prepared for lower trading earnings, so the cost cutting plans are a questions

Goldman Sachs – lower trading and investment banking volumes to make a print on results

Johnson & Johnson – Obamacare repeal, sales and benefits of Actelion acquisition (USD 30 bln) to be scrutinized

IBM – markets are more and more negative

Lockheed Martin – expecting better results as governments spend more money on defence, guidance for 2018 may bring more light

Harley-Davidson – not to impress on lower sales in US

Bonds

10-yr Trys yield at 2.30% - drop is likely positioning for upcoming FOMC next week

10-yr Bund yield at 0.58%

EURUSD

Obamacare repeal mess/failure creating strong reaction along with stops at 1.1500 pushing USD lower

But political stuff likely off the table soon as we head to ECB on Thu

Next resistance 1.1580, then 1.1615

Followed by 1.1714, 1.1750

Staying above 1.1600 is way overstretched, 1.1615 should hold ahead of ECB

USDJPY

JPY experienced strong buying across crosses

Bids may be sitting above 112.00

Expiring options around that level too

50/100/200 DMA at 111.84/78/84 very close

Resistance at 112.31 (38.2% Fibo) and 113.14 (23.6% Fibo)

Gold

Above 200 DMA at 1229, 1234 (76.4% Fibo)

If we see another move higher, shorts may get well squeezed

From macro perspective (US data), has a room to go higher

Rising trendline, 1245 (61.8% Fibo) and 50/100 DMAs (1248) acting as resistance

Data/Events

BoE’s Carney (1330 GMT)

Thu

ECB meeting – no change in policy

Dovish wording from may push traders to reassess their stance as EUR had a very nice run

And is hitting few important resistances

Very likely Draghi doesn’t want to repeat his hawkish speech from Sintra sending 10-yr Bund yield above 0.50% from around 0.25% level

Markets pricing a 10 bps hike of deposit rate (-0.4%) over the next year

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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May 11, 2017 - Market Update

Short recap

Asia up on stock markets gains led by rising energy sector

Trump falling deeper into the election scandal orchestrated by Russians

An impeachment coming at certain point...?

Or at the best the tax and biz reforms being delayed…

Six Canadian banks downgraded on ongoing concerns about expanding levels of private-sector debt across the country

And not just situation in real estate

CAD caught in between rising commodity prices, bubbling housing and appreciating USD

Market very negative sentiment on CAD

Rosengren played hawkish yesterday with gradual reduction of balance sheet and 4 hikes this year

Draghi just repeated himself, didn’t please German hawks

As EZ economy is solid but it is too early to pull out the QE (EUR 2.3 bln)

Hinted some changes though

Equities

Standard Life to merge with Aberdeen Asset Management, cutting 10% of jobs

NYSE (after LSE) trying to charm Saudis to gain the Aramco IPO

Tesla open for solar roofs orders

Mylan not comfortable with FDA

AXA to float its shares of its US life insurance and asset management business in US

Looking to free some capital and refocus

Earnings

UniCredit doing better as restructuring pays off

Following the path of CH banks and dropping complex activities, simplifying and focusing on the core

NVDIA benefiting from data centers and automotive

Enbridge (CA) expected lower profit due to rising costs

Others to report: Macy’s, Kohl’s, Nordstrom, Teva Pharmaceuticals, Aegon, Wells-Fargo, Dow Chemical, Bombardier (CA), Magna (CA)

Bonds

2-yr Trys yield at 1.35% marching towards 1.40% level

10-yr Trys yield at 2.40% - 10-yr auction disappointed yesterday

10-yr Bund yield at 0.44%

EURUSD – pivotal level 1.0850

Then 1.0825/30 area (21 & 200 DMA) – if broken, likely to see more downside

As longs may get nervous

Some selling interest towards 1.0900 area

USDJPY – some offers above 114.40, more towards 115.00

Next 115.50 and 118.60 highs may be in focus

Support around 114.00

Yields and risk on mood prevailing

Commodities

Oil supported by the fall in US inventories, slowing production/imports that resulted in heavy short covering

Goldman Sachs, IEA – accelerating decline in inventories, rising demand to be higher than supply

Support USD 47 (WTI) and USD 50 (Brent)

Gold on the way to 1200

But supported by North Korea and unpredictable Trump

Upcoming

Fed's Dudley speaking at 1025 GMT

ECB’s Draghi, Coeure at G7 Fin Mins at 1535 GMT

ECB’s Praet speaking at 1630 GMT

G7 Fin Mins & Central bankers meeting in Italy for three days

To discuss: trade, financial institutions coordination, fighting inequality and tax crime

Mnuchin to inform about changes in US taxes, Dodd-Frank, infrastructure investments and ease of biz regulations

Fri – US CPI and Fed's Evans speaking

May 25 – OPEC/Non-OPEC meeting

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 – market pricing rate hike above 90%

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 9, 2017 - Market Update

Short recap

Asia mixed

Europe opening higher but correcting

Kuroda sees 2% inflation in 2018

To keep the short term rate target at -0.1%

And 10-yr Japan bond yield at 0%

UK’s employers having hard times to recruit foreign workers

Fed’s Bullard having concern over weaker growth and inflation data in Q1

Alex Weber from UBS (former Bundesbank head):

Brexit negative for Europe, more volatility to come

ECB likely to remove some easing wording in June

And announce taper in Sep

Equities

Akzo Nobel rejected the PPG Industries take over bid again

UK’s energy supplier Centrica not very happy with warm weather and low commodity prices

As they bite into the margins

Home Capital suspended dividend, burnt 1.6 bln out of 2.0 bln of line of credit as deposit flee away

Industry veterans added to the Board

Suncor looking at new oil sands project in Alberta (Canada)

ISS pushing shareholders of PrivateBancorp to reject takeover offer from CIBC

Earnings

Commerzbank reported higher operating income, proof that raising rates benefit banks

Walt Disney expecting better results

Valeant investors more focussed on asset sales than earnings

Others reporting: Allergan, Duke Energy, Nvidia, Electronic Arts, SunPower,

VIX touching the 9.77 level, lowest level since 1993

Market sees very little risk in the near future

Will not last long, what is going to be the trigger?

Bonds

10-yr Trys yield at 2.39% with real yields at 2 month high of 0.51%

10-yr Bund yield at 0.42% - ECB’s June language adjustment and beginning of taper in Sep getting priced in

Yield likely to move to 0.50% attacking the recent highs

FR-GE spread stuck at 42 bps (after Macron victory), stabilized here

What is still above 20-30 bps historic levels but market is waiting for June Parliamentary elections

EURCHF, USDCHF – weaker CHF on higher yields

And money flows leaving safe heavens

To watch SNB sight deposits stats – to stabilize or fall?

USDJPY – on the way to 115.00 after clearing Ichimoku

Next resistance 113.76 (76.4% Fibo)

Risk on, US yields and tax reform progress crucial

Commodities

Oil very indecisive as OPEC/non-OPEC cut may extend to 2018

But slowing demand and rapidly rising production in US temper the cut impact

Gold playing within 1200/50 range

USD and US yields not helping

Options market back to neutral

Specs long cut, real money no change

Data

US: Small Business Optimism Index to slow a bit

US: JOLTS to slow a bit

Fed's Kashkari (1300 GMT), George (1540 GMT), Rosengren (1700 GMT) and Kaplan (2015 GMT) speaking

G7 finance ministers meeting in Italy this week

Discussing: trade, financial institutions, fighting inequality and tax crime

Upcoming

Wed – ECB’s Draghi and Fed’s Rosengren, Kashkari speaking

Thu – Fed's Dudley speaking

Fri – US CPI and Fed's Evans speaking

May 25 – OPEC/Non-OPEC meeting

June 8 – UK elections

June 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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May 3, 2017 - Market Update

Short recap

Asia mostly in green with some hesitation about Fed looking at June hike

Europe opening lower

Trump a bit “disruptive” in international field

Open to government shutdown, pushing for faster voting on bills

US pushing China to agree on additional North Korea sanctions

Brexit – GE-FR agreed on tougher stance towards UK’s post-Brexit obligations (EUR 100 bln) Full article

UK announced that they will not pay this amount, want to discuss in details what are the rights and obligations

I love this one too…what discussions, all is written on the paper and signed by them

Equities

Akzo Nobel meeting today to discuss offer PPG Industries (USD 29 bln)

Peugeot to test self-driving cars in Singapore in a partnership with nuTonomy

US auto sales losing the steam, the cycle likely comes to an end

Valeant should be able to repay USD 5 bln by Feb 2018

Apollo, Blackstone, Centerbridge interested in Brookfield Asset Management (CA)

Fairfax Financial looking to buy Home Capital

Active fund managers are underweighted Apple versus indices despite high level of share price

VIX at 10.59 level – time to buy put options?

Earnings season

Apple’s iPhone sales/revenue down (customers waiting for a new device), feeling the replacement cycle

Facebook – expecting higher revenue on mobile-ads, market to focus on hiring and planned investments

AIG – markets is awaiting a CEO succession plan

Tesla – investors are very curious about the company results as the company deliveries in Q1 jumped by 69% to record 25k

Home Capital Group (CA) – closely watched as there are few bids in the wake of financial difficulties following mortgage fraud accusation in the bubbling Canadian housing market

Others reporting: Prudential Financial, MetLife, Yum Brands, Kraft Heinz Foods, Time Warners

Bonds

ECB bought much more FR (EUR 11.3 bln and IT (EUR 9.8 bln) bonds last month, while GE bonds purchases were in line

Amount that is in breach of the usual allocation key

ECB did so ahead of FR elections and due to issues IT is coping with

10-yr Trys yield at 2.29% - trading a bit stronger ahead of FOMC

10-yr Bund yield at 0.32%

10-yr Greek yield declined substantially to 6.16%

Gold – waiting for a catalyst: FOMC, US NFPs

Support 1249 (50% Fibo) and 1250 (50/200 DMA)

Data

EZ: Q1 GDP flash estimate – no change to 0.5%

US: ADP Employment report – expecting lower growth in April

US: ISM Non-Manufacturing – expected slightly higher

Obamacare vote expected today/tomorrow

FOMC statement to be released (no press conference)

Likely to discuss balance sheet (USD 4.5 tln, pace of rate hikes, no policy change expected)

Just to refresh:

March PCE came at 1.6% as expected

Market pricing June hike at 70%

Upcoming

Friday – US NFPs

Focus on earnings while headline may not be stellar due to Easter holiday

May 7 – 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 28, 2017 - Market Update

Short recap

Asia – saw some profit taking after risk on week

Europe opening lower

ECB no change in monetary policy

Draghi had a good showing, inflation not a worry, economy doing better

(5-yr forward inflation swaps above 1.6% indicating ECB still undershooting its inflation target)

Taper and rate hikes not a question of a foreseeable future

What may put additional pressure on EURUSD and close the Sunday’s gap up

New healthcare vote delayed again

Trump’s new trade war target is South Korea (kind of blindness in between the North Korea tensions…)

US and China say that North Korea situation can escalate if talks fail

Equities

Stocks too rich or too cheap?

Hard to say as the enormous QE stimulus is still here and rates are not at normal levels

S&P 500 trades at 18 times 2018 forward PE

S&P/TSX at 18 times 2018 PE

Deutsche Bank surprised but revenues are falling and trading is short of US peers performance

UBS benefited from trading and investment banking activities

Earnings season

Alphabet (mobile ads and YouTube), Amazon (well positioned), Intel, Microsoft, Ford doing very well

Exxon – market is looking at substantial rise in profits on cost cutting

Chevron – expecting company to by back to profit on refining and cost cutting

Others to report today: Colgate-Palmolive, General Motors, Goodyear, Imperial Oil (CA), Cameco (CA)

Bonds

Yields lower on risk off

Europe’s corps in high demand, credit spreads very low

May be the time to look elsewhere for better yield

10-yr Trys yield at 2.29%

10-yr Bund yield at 0.30% (pretty nice jump in Bunds after Draghi yesterday)

EURUSD

Looking whether closing the week below Sunday’s open at 1.0889 (Reuters)

Support at 1.0850; 1.0834 (200 DMA) and 1.0820 (50% Fibo)

Resistance at 1.0933 (61.8% Fibo) and around 1.0950 (upper channel line)

1999 high at 1.0915

Options expiries and US GDP to drive the market

Data

EZ: Flash CPI – 1.8% exp. vs 1.5% prior; Core 1.0% exp. vs 0.7% prior

US: Advance GDP – expecting slowdown with 1.2% exp. vs 2.1% prior, but it is not alarming as it is a historical pattern. Important to watch business investments but here, we can eventually blame lacking Trump policies that create hesitation about capital investments

US: Chicago PMI

US: Uni of Michigan Sentiment index – looking higher

Fed speakers: Brainard (1715 GMT) and Harker (1830 GMT)

Upcoming

Apr 29 – EU Summit to sign off the Brexit negotiations guidelines

May 7 – 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 26, 2017 - Market Update

Short recap

Asia higher on positive expectations about US

Europe openig lower

Rumours – Trump dropped border tax ahead of tax reform release

To be reviewed later eventually

US getting ready military wise in South Korea

While top US officials and Senators met

UK opened to keep contributing to the EU budget (until 2020)

ECB may be on the route to change slightly wording at its Jun 8 meeting

As risk of negative outcome of FR elections is very unlikely

Still strong macro from US and earnings support bull market

NASDAQ hitting 6000

Companies in US adjusting their hiring plans of foreign nationals

As they fear of visas policy change, thus switching from temporary visas to recruiting more US based staff

Caterpillar very positive on China

Christian Dior likely to combine its activities with LVMH

McDonald’s said that labour market is tightening across all regions in US

Earnings season

Reporting today: United Technologies, PepsiCo, Boeing, P&G, Northrop Grumman, Amgen, PayPal, Twitter

Bonds

10-yr Trys yield at 2.34%

10-yr Bund yield at 0.38%

USDJPY – Trump trade reviving?

Should benefit again if it does

EURUSD

Buyers stopped ahead of 1.0950 (slightly above is upper trendline of ascending channel)

Resistance at 1.0933 (61.8% Fibo)

After FR elections seen unhedged capital flows to EZ stocks

Trump trade and tax reform details can change the picture

Commodities

Gold – coping with stocks, yields, JPY and Trump tax reform

But getting support from North Korea

Below descending trendline that acted as a support

Support at 200 DMA at 1255 and 1249 (50% Fibo),

Oil – still under pressure from uncertainty about OPEC’s ability to reduce production and rising US inventories

Bullish inventories can help oil higher

But nothing like lower oil and higher gasoline inventories

Production is lower but shipments continue at the same pace

Upcoming

Juncker and Barnier in London

US Gov shutdown still on the table

Trump’s tax package to be revealed:

Lowering corporate tax to 15% from 39.6%

Lowering tax on repatriation of profits to 10% from 35% (USD 2.6 tln sitting overseas)

Other measures for SMEs and self-employed

Apr 27 – ECB meeting – Draghi will be in the spotlight defending the QE continuation with taper may be around mid-2018

Will need to talk down the taper at an earlier stage

Would correspond to three year cycle as Fed had

To please the hawks likely small wording adjustment at Jun 8 meeting

Apr 29 – EU Summit to sign off the Brexit negotiations guidelines

May 7 – 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 21, 2017 - Market Update

Short recap

Asia in green taking clues from US stocks

Europe opening mixed

Obamacare on the table again next Wed

Mnuchin was out with some details on tax reform

To be revealed soon (again…) and wants to push it through not waiting for healthcare bill approval

Trump doesn’t like Canadian milk

Despite Canada having USD 400 mln trade deficit in dairy products

Ontario (Province in Canada) to tax 15% all foreign property buyers

Kaplan (Fed) is ok with three hikes this year

Kuroda to keep current bond buying

US steel producers to benefit from higher defence spending

EU equities saw significant outflow ahead of FR elections

The money can return quickly after market positive election outcome

Recently we have mentioned that EU stocks trade at 20% discount to their US peers

French stocks to benefit most under this scenario

SNC-Lavalin Group buying WS Atkins (CAD 3.6 bln)

Deutsche Bank fined USD 157 mln over FX and Volcker

Danone completed acquisition of WhiteWave Foods (USD 12.5 bln)

Stays positive on earnings

Tesla recalling 53k cars

Earnings season

Visa – better results yesterday showed that consumer credit and spending is firm globally

Blackstone – better results on assets selling during Trump rally

Schlumberger – expecting worse results on rising costs, markets waiting for an update on drilling activity worldwide

General Electric – markets will question how efficient the company is (cost cutting, raising profits)

Honeywell International – expecting worse results on aerospace

Bonds

Cautious ahead of FR elections, keeping the yields low

Despite a small rise in yields as market expects positive outcome

10-yr Trys yield at 2.24%

10-yr Bund yield at 0.24%

FX

EURUSD – suffered from yesterday’s shooting in Paris and US yields moving higher

Trading flat ahead of very close FR presidential race

Let’s see whether the event will reflect in more votes for Le Pen but French are tired of terrorist attacks

To watch options expiries today: EUR 1 bln at 1.0600, EUR 1.27 bln at 1.0700

USDJPY – support at 200 DMA (108.90)

Some selling interest laying around 109.50 level

Commodities

Gold – 3m ATM vols still at the lows

Gold has the room to go lower on risk on election outcome, lower JPY and higher US yields/USD

After printing the high at 1295 looking at support at 1267 (descending trendline)

Then 1250 (200 DMA) and 1248 (50% Fibo)

Data

EZ: Flash PMI – expecting a small dip

UK: Retail Sales – keep slowing

US: Flash PMI – expecting a small dip

IMF, World Bank and G20 meetings/speakers until Sunday

Trump less aggressive with protectionism

Kashkari (Fed) speaking at 1330 GMT

Upcoming:

Apr 23 – French presidential elections

40% still undecided

Official results at 1800 GMT

Exit polls from midday but on BE and CH media only

More precise estimates around 1600 GMT

Apr 29 – EU Summit to sign off the Brexit negotiations guidelines

May 7 – French presidential elections 2^nd round

May 25 – OPEC/Non-OPEC 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 19, 2017 - Market Update

Short recap

Asia lower

Europe opened mixed

GBP up yesterday as market speculates that snap elections can remove the political uncertainty

And give a stronger mandate for May in Brexit talks

Pence – NK to expect an overwhelming and effective response

China shadow banking back at full speed

China eased capital flow controls

Foreign investment in Canada hitting high of CAD 39 bln on M&A

Geopolitical events and upcoming French election driving investors to safe heavens (gold, bonds)

FTSE 100 below recent lows on stronger GBP

BMW see China sales to grow 10% in 2017 while globally should rise 5-5.5%

Credit Suisse still in a clash with its shareholders over top execs bonuses

Earnings season

Goldman Sachs disappointed on trading revenue what impacted markets yesterday

Lower trading activity was to blame as the bank doesn’t benefit from lending as competitors do or additional trading related business.

Is Goldman Sachs loosing a market share?

Morgan Stanley – expecting positive surprise on more active bond trading and cost cutting

American Express – expecting a negative surprise due to competition margin squeeze and rising costs

BlackRock – more than profit report markets will scrutinize cost cutting and reorganization plans

Especially at active stock picking division

Others: Qualcomm, CSX, Abbott Laboratories, eBay, U.S. Bancorp

Bonds

10-yr Bund yield at 0.16%

10-yr Trys yield at 2.18%

Touched 2.1629% - the lowest since Nov 2016 elections

The area of support is around 2.1346% (38.2% Fibo)

The levels around/below 2.20% may be a good place to start to sell bonds

But the appetite for safety stays strong for now

Don’t forget about Fed hiking and trimming bond portfolio

George (Fed) supporting bond taper this year

June hiking priced at 43%

EURUSD daily – getting crowded

GBPUSD daily – no risks of Brexit negotiations removed

More to go? Will the 1.2800 hold? How long?

The move occurred on very thin liquidity

After surprise announcement

Data

EZ: CPI – no surprise expected, should stay in line

Beige Book (Fed)

Hansson (ECB) speaking (0800 GMT)

Coeure (ECB) speaking (1200 GMT)

Praet (ECB) speaking (1430 GMT)

Rosengren (Fed) speaking (1630 GMT)

Upcoming:

Apr 23 – French presidential elections

40% still undecided

Official results at 1800 GMT

Exit polls from midday but on BE and CH media only

More precise estimates around 1600 GMT

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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