May 8, 2017 - Market Update

Short recap

Asia higher

Europe opening in red

FR elections – Macron winning over Le Pen (66/34)

The margin of victory was important ahead of Legislative (Parliamentary) elections

Macro some pro-business policies at EU level as well, closer integration, common budget

What may go against Merkel’s vision

But what about cooperation of Macron/Schulz (two EU lovers) as Mitterand/Kohl were?

Fed’s Williams – balance sheet reduction should start in 2017

Considering balance sheet as monetary policy tool

Equities

Linde-Praxair deal getting more difficult

Frankfurt to welcome five largest US investment banks due to Brexit

Bonds

FR-GE spread at 42 bps, some stability

Seen some weakness in IT bonds

Back to old theme of viability of EU project

10-yr Trys yield at 2.37%

10-yr Bund yield at 0.42%

EURUSD

Higher to 1.1024 on Macron but gave up the gains to trade range bound again

Price action was not about Macron victory but the loss of Le Pen (relief)

Strong resistance at 1.1020 (descending trendline on daily chart)

Rising peripheral spreads can bring more doubts about long-term viability of EU project

US-GE yield spread showing EURUSD should be lower

Some buyers sitting at 1.0950, if broken can move to 1.0875

Risk-off capital flows into EU equities may have some impact

Levels: 1.0900, 1.0850, 1.0830 (200 DMA) – here likely to bottom

Gold (daily) – saw some short covering

June rate hike not priced in fully

Resistance at 1255, unlikely to be broken

Data

CA: Housing data would be of high interest on the back if real estate bubble issues in Canada

Fed’s Bullard speaking at 1235 GMT

Fed’s Mester speaking at 1245 GMT

Upcoming

Wed – ECB’s Draghi speaking

Fri – US CPI

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 6, 2017 - Market Update

Short recap

Asia down on Fed planning to reduce its balance sheet while more doubts about Trump ability to deliver fiscal stimulus makes rounds in the markets

Saw strength in JPY, VIX and USDJPY vols sharply higher, AUDJPY on the short side

Europe opening lower

Draghi was just out – Monetary policy still appropriate, reassessment not warranted at this stage, still need to build sufficient confidence, not having enough evidence to change inflation forecast

FOMC Minutes – Fed officials seriously discussed the shrinking of balance sheet with possible start at the end of 2017 but not sure whether through direct sales or not reinvesting maturing papers

ADP numbers confirmed strong underlying hiring trend by US companies

Trump expressed himself that Asad crossed the red line in chemical attack on civilians

But haven’t specified anything more (seems like he is learning how to communicate…before meeting Xi today at least)

Toronto house prices up 33% on a year with average price around CAD 916k per property

Sounds like a bubble

To watch global financials and credit for a potential upcoming correction

Monsanto reported better results helped by seeds of soybean and corn

AkzoNobel shareholders may go against the company in order to push for take over talks with PPG Industries

As mentioned yesterday after positive US antitrust ruling the EU officials approved the ChemChina takeover of Syngenta as well yesterday

Apple to control more the core technologies due to margins, further innovation and decrease dependence on 3^rd party suppliers

Rockwell to buy B/E Aerospace (USD 6.4 bln)

Amazon looking to buy hydrogen fuel cell maker Plug Power

10-yr Trys yield at 2.34%

10-yr Bunds yield at 0.25%

Data

GE: Factory orders lower than expected

EZ: Retail PMI expected lower

US: Jobless Claims expected lower

ECB Praet (0730 GMT) Weidmann (0940 GMT), Constancio (1145 GMT) speaking

ECB Minutes (1130 GMT) - should provide more clarity either on market overraction or misjudgement of Draghi's speech

Trump to meet Chinese president (2 days)

G20 Econ ministers meeting

NATO foreign ministers meeting (2 days)

Fri:

US NFPs

Fed Speakers this week:

Fred Williams (today)

James Bullard

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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