Aug 2, 2017 - Market Update (DXY close to strong support area 92.64, 200 WMA & 91.88, BoJ keeping powerful QE, Iron ore down 1.8%, Plenty of USD liquidity supporting risk assets, Drop in US car sales to hurt, One Apple a day..., Tesla on stage today, Banks not happy with low volatility, Venezuela bonds struggling)

Short recap

Asia in green as techs were inspired by Apple’s earnings

Europe opening higher1

BoJ on a halfway to 2% inflation, must keep powerful QE in place

Structural reforms needed to boost inflation

Trump to address some China trade practices

Iron ore down 1.8% after three day rally (seems not sustainable) and reaching USD 70 per tonne

As it was on the back of Chinese steel producers just pre stocking

Drop to USD 50 may follow

Sep debt ceiling debate/vote coming

Plenty of USD liquidity supporting risk assets

Equities

Drop in car sales a risk for US economy

Lots of leased cars coming back to market, so automakers will face tough times

But stellar earnings from EU and US keep supporting stocks

Banks not happy with low volatility as it takes the bond trading profits down

Silicon Valley startups facing more pragmatic approach from investors, thus less money

Societe Generale putting EUR 300 mln aside

BP in talks with green car producers to offer a battery charging at its gas stations worldwide

Earnings

Apple surpassed expectations yesterday, hitting all time high in after market

Still struggling in China but moving focus from cars over to autonomous software and all around

Today reporting: MetLife, AIG, Time Warner, Symantec, Molson Coors, Tesla among others

Tesla – market is expecting a rise in revenue but not turning to profit will take time. Model 3 to be a drag for the time being.

Bonds

10-yr Trys yield at 2.27% vs 2.30% yesterday – down on US politics and North Korea

10-yr Bund yield at 0.48% vs 0.54% yesterday

Both Trys and Bund yields felt overnight

Situation in Venezuela getting worse

Sharply falling bonds just reflect the risk of potential sanctions to oil industry

DXY

Strong support at 92.64 and 91.88, 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

Likely to have attempts to break these levels

Source: Saxo Bank

EURUSD

Sentiment is on cautious side at these levels, market reassessing how USD is actually weak

Not likely to move to 1.2000 without any new USD negative news

What’s coming first? Trump or NFPs?

Support 1.1721 (10 DMA), 1.1785 (200 WMA) – to watch weekly close above 200 WMA

Closing below 10 DMA would make bullish momentum weaker

Resistance 1.1200 more psychological of nature

USDJPY

Small hurdle at 110.50

Resistance 110.97 (61.8% Fibo)

Support 110.14 (76.4% Fibo)

Bids sitting at 110.00, stops likely below 109.90

Data/events

ECB Governing Council meeting

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 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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Apr 12, 2017 - Market Update

Short recap

Asia on a safe side on geopolitical risks, JPY, gold and VIX up

Europe opening higher

Kuroda – BoJ easing for price stability and not to target FX levels

Will keep going with easing to reach 2% inflation

BoJ reduced 3-5 yr bond purchases

Xi sent a message to Trump to solve the situation in North Korea in a peaceful way

Japan joining US in North Korea muscle flexing on the sea

US Sec Tillerson in Russia today

Merkel against EZ mutual debt to distinguish herself in election year from Schulz

Greece and Portugal would need to address debt sustainability anyway

China PPI at 7.6% but serious real estate problem

Economy way overleveraged (80% of GDP)

Will be negatively impacted by deleveraging that would need to take place at certain point in time anyway

VIX was up to 15.88% despite S&P 500 just slightly lower

BHP Billiton rejected any attempts to change the corporate strategy from Elliott Management side

Siemens to partner with Bombardier in train production to better position themselves against Chinese CRRC Corp

United shares hit by passenger issue due to overbooking

It seems like a very common practise by airliners to overbook and then offer you an incentive or compensation for not flying or flying another day

Dialog Semiconductor may lose deal with Apple

10-yr Trys yield at 2.30% (dropped to 2.28%) - should be temporary on geopolitical risks (Trump acting as a policeman)

While June rate hike is priced at around 60%

If the rate drops further below the 2.30% level it would express the level of doubt of bond market about Fed raising rates sooner than later

10-yr Bund yield at 0.20%

GE-FR spread rising to 74.50 bps again on the back of leftist Menchelon gaining momentum

His surprise win may be a risk event reflected in USDJPY decline

FX options

EURUSD 1m RR dropped sharply, trading below Brexit vote levels

Traders favoring put options (getting more expensive than calls)

Market was buying strikes around French elections heavily yesterday

In a protection move

1w vols dropping sharply yesterday

EURUSD spot flat

EURUSD 1m vols spiking to 12.47 from below 9.00 level

12.50 vols is equal to a spot move of 76 pips a day

EURUSD 1m 25 RR heavily favoring puts

But…

EURUSD 1w vols trading at historically low levels and keep moving lower

What may be due to implied vols underperforming

And market using 1w strikes to finance strikes covering French elections (Apr 23/May 7)

USDJPY – with ease through 110.00

Sitting at descending trendline

But close to 200 DMA at 108.70

Are the bears strong enough to take it below 200 DMA?

Similar picture as for EURUSD

1m vols spiking to 12.48 from above 11.00

1m 25 RR dropping sharply following spot and favoring puts

Liquidity to disappear quickly as we get closer to Easter holidays

Shouldn’t experience any change unless we really have a huge event this week

Than we can see sharp moves either way

6m vols trading very cheap compared to risk events as French & German elections, North Korea, Syria are

Data

UK: Labour Market Report to stay resilient

Kaplan (Fed) speaking at 1400 GMT

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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