Short recap
Asia higher as oil found some ground
Europe mixed
German FinMin out with Frankfurt a good alternative to
London
As ECB and banking oversight is there
Luring European Banking Authority there as well
Likely to cut taxes
PBOC not planning to shrink the balance sheet as
Fed does
Macron – stronger integration of EZ to come
(via common budget)
Brexit – getting tougher for May as Scottish
parliament and House of Lords may unite with some MPs (Liberal and Labour) to
block necessary Brexit bills
US pushing China to do more on North Korea
New healthcare bill is coming to life but watch
the clash between Senate and the House
Equities
Ok to stay long equities on valuations but some macro
worries appearing and volatility is extremely low
A time to buy protection going to lousy summer trading
and position before wild Q3?
Harley Davidson eying to buy Ducati
(belongs to Volkswagen/Audi portfolio) (EUR 1.5 bln)
Diageo buying tequila brand Casamigos
(owned by George Clooney) for about USD 1 bln
Nike to sell directly on Amazon.com
RBC to cut jobs in order to push new technology
Cenovus having hard time to sell assets as oil
prices are low
Wal-Mart and GM driving renewable energy
sector as the largest buyers
Fed to release banks stress test results
Bonds
10-yr Trys yield at 2.15% - under pressure from falling
oil and commodities
10-yr Bund yield at 0.26%
PIMCO on Chinese bonds:
Inverted yield curve pointing to stress (10 yr CGB yield
dropped below 1 yr yield)
Result of tightening by PBOC and lower liquidity
Growth to decelerate into 2018
Stress in interbank market to be taken seriously
US high yield credit spreads widen on the back of
stress in energy sector
That needs to cope with high debt (still growing) versus
lower operating income from low oil prices
EZ bond yields diverge depending on the debt load (top EZ countries from lowest to highest)
Used to move in tandem
Germany, Finland, Netherlands, Austria
EURUSD
In the absence of data, the flows will be
affected/limited by expiring options:
1.1000
(EUR 1.3 bln), 1.1090-1.1100 (EUR 1.87 bln), 1.1140 (EUR 423 mln), 1.1160 (EUR
800 mln) 1.1175 (EUR 2.2 bln), 1.1200-10 (EUR 1.7 bln), 1.1250 (EUR 2 bln),
1.1275 (EUR 660 mln) 1.1300 (EUR 74 5 mln)
Break of 1.1178 (10 DMA) to negate the trend lower
Next resistance at 1.1187 (23.6% Fibo)
Support at 1.1120/30, 1.1100 and then 1.1067 (50.0% Fibo)
USDJPY
Resistance at 111.24 (50.0% Fibo), 50 DMA at 111.15, 200
DMA at 110.85
Bidding interest on importers side on dips, while offers
from exporters sit above 111.50
Stops below 111.00
Experiencing a strong correlation with real yields
Thus correction in US yields and oil higher to weaken the
JPY
Expiring options will likely drive the market:
110.00-10 (USD 1.9 bln), 111.00-10 (USD 2.7 bln,)
111.50 (USD 690 mln) 111.80 (EUR 575 mln) 112.50 (EUR 1.7 bln)
Data/Events
EU Summit
ECB General Council
meeting
ECB’s Hakkarainen
(0820 GMT)
Fed’s Powell (1400
GMT)
Fri
Fed’s Bullard (1515
GMT), Mester (1640 GMT), Powell (1815 GMT)
Should you have any questions feel free to contact me
anytime.
Good luck Champs!
Mr Hawk
DISCLAIMER: This material was created for informational
purposes only and represents the Land of Trading team’s view of the past and
current economic and capital market environment. It is not an investment advice
and should not be viewed that way at all, and the creators of this material
cannot be held liable for any potential losses resulting from trading, where despite
this disclaimer someone would consider this material as an investment advice.
All rights reserved ©2016. Contact: landoftradingATgmailDOTcom
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