Jan 15, 2018 - Market Update (USD hit by non-US monetary tightening, No Bitcoin ETFs/mutual funds (for now), Bulls at extreme levels, SoftBank to list mobile biz, EUR longs up again, EURUSD to consolidate today, Gold to attack 2017 high at 1357, facing 1357-1375 range resistance)

Short recap

Asia in green

Europe opening higher

Trumps racist comments are dangerous in general

And can also change the behaviour of the public

Thus hurting the consumption habits, investments and economy

FR and GE looking at EZ investment budget/reforms

USD hit by markets pricing monetary policy tightening in other developed countries

Bitcoin ETF Fast Track Derailed by SEC Liquidity, Safety Worries  link

Applications for 12 ETFs and 2 mutual funds withdrawn from SEC approval process

On liquidity and security concerns

Equities

SoftBank Group to list mobile phone biz (USD 18 bln)

This step should cement the ambitions as a global investor in tech

Lactalis to compensate the victims of Salmonella

BlackRock with USD 6 trln of AUM

Earnings

Markets ready for strong figures only

BofA, Goldman Sachs, Citigroup, Morgan Stanley, Schlumberger, ASML reporting

Bulls are at extreme levels

Markets with 15 months of gains

Equity funds experiencing record inflows

Source: Yardeni Research

Bonds

10-yr Trys yield at 2.55% vs 2.55% on Friday

10-yr Bund yield at 0.58% vs 0.52% on Friday

2-yr Trys yield at 2.00% after a recent sharp rise

2-yr Bund yield at -0.62%

ECB’s Weidmann calling for exact QE end date

ECB still with QE despite economy getting stronger

Bill Gross (Janus): Bonds are in a bear market  link

“The 1.45% for tens can legitimately be cited as the end of the bond bull market which began at 15.8% in 1981 and provided prescient portfolio managers with the potential for huge capital gains and the moniker of “total return”

COT report

EUR longs at 145k vs 128k week before

JPY shorts at 126k vs 122k week before

GBP longs at 26k vs 16k week before

EURUSD

ECB Minutes after taste still in the market

Draghi is definitely happy as higher EUR and yields tighten monetary conditions

What in turn gives him more time to keep negative rates despite EZ economy is getting stronger 

EUR is also supported by GE coalition talks and Merkel/Macron calls for EZ reforms

Bullish outside week is completed

Consolidation should be the name of the game today

Support at 1.2100, 1.2088, 1.2078 (23.6% Fibo), 1.2046 (10 DMA), 1.2041 (2012 low)

Resistance at 1.2227 (50% Fibo of 2014/15 move), 1.2330 (descending trendline – 2008/2011/2014 and 2008 low)

But serious one at 1.2644 (61.8% Fibo)

For Elliott Waves lovers the 1.2288 is critical 

Looking from short side at EUR

EURUSD daily

Focus on Fibo levels and yellow zones

Source: Saxo Bank

EURUSD weekly

Focus on two red circles (highs and descending trendlines)

Source: Saxo Bank

Gold

Specs added 110k lots recently on weaker USD, geopolitical risks

Resistance at 1357 (2017 high) and 1357-75 range

Support at 1321 (23.6% Fibo)

Source: Saxo Bank

Data/events

Should be quite day 

US closed on account of Martin Luther King Jr day

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

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 22, 2017 - Market Update (US rate curve flattening on corporate and pension fund investors interest, Hong Kong above 30 000, US not comfortable with free and open internet, USDJPY condemned to 112.00-50 range ahead of US/JP holidays, Enel going digital, RBC too big to fail since yesterday, If early elections in Germany not before end of Q1 2018)

Short recap

Asian in green

Europe opening higher

If new elections in Germany, not before end of Q1 2018

Thus prolonging the uncertainty but EUR is indifferent, as it was the case with some other coalition talks in EU

US to take down the free and open internet

Giving the service providers possibility to choose what content the users will access

Lacklustre trading ahead of US and JP holidays

Equities

Hong Kong index breaching 30 000 on continuation of risk and strong earnings

Enel increasing spending on digital networks to ready for end user intelligent solutions

RBC on a global list of too big to fail, thus will need to hold extra capital (+1%)

Rio Tinto, Wealth Minerals and GSR Capital to bid for SQM that is a lithium producer

EU digital tax still an issue for some EU states

Bonds

10-yr Trys yield at 2.36%

US yield curve keeps flattening what is a very interesting development we have pointed to recently

Very likely it is related to US tax reform implications as pension funds load the bonds due to:

Corporates increasing the funding of pension schemes before next year further rise in US rates

And pension fund investors also making contributions as they may lose some tax exemptions next year with new reform in place

10-yr Bund yield at 0.34%

Situation in Turkey not helping sovereign and bank bonds

As investors prefer safer assets

EURUSD

German politics a focus

Support around 1.1710, 1.1734 (10 DMA)

Resistance range 1.1755/60/65 where are 55 & 100 DMA, 38.2% Fibo and yesterday’s high

USDJPY

Lower US yields and yield flattening pushing JPY higher

Decent offers seen above 112.50 with expiring options

112.44 (100 HMA) 112.47 (55 DMA)

Bids sitting at 112.00 with USD 1.4 bln option expiring with strike at this level

Support also from 100 & 200 DMA (around 111.70 level) and 111.90 (38.2% Fibo)

Source: Saxo Bank

Data/events

ECB Governing Council (no interest rate announcement)

FOMC Minutes

Thu

ECB Minutes

US Thanksgiving – markets closed

JP Labour Thanksgiving day

Fri

US bond trading closed, stocks open half day

Nov 28 – Powell before Senate Banking Committee

Nov 30 – OPEC meeting

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 9, 2017 - Market Update (Brexit saga continues - EU giving UK 2-3 weeks to come up with something, GE signing deals (USD 3.5 bln) in China Marks & Spencer speeding up stores closures on weak sales, 10-yr Trys yield key levels 2.27% & 2.50% to show DXY direction, EURUSD cluelessly waiting for US yields and stocks, Offshore investor flows into Japanese stocks continue)

Short recap

Asia up

Europe opening higher

US tax reform in place likely in 2019 on respecting proper budget rules

TPP – 11 countries at the table and discussing

UAE investigating financial transactions/assets of 19 Saudis at its banks

Brexit saga – EU giving UK 2-3 weeks to bring the bill otherwise not able to prepare for Dec summit

US & SoKo Navy to launch drills near Korean peninsula

Equities

General Electric signed 3 deals in China (USD 3.5 bln)

Marks & Spencer speeding up stores closures on weak sales

The Banco Santander laying off 2000 employees as part of Banco Popular take over

Tencent buying 12% of Snap

Earnings

Walt Disney – theme park revenues to help

Bonds

10-yr Trys yield at 2.33% vs 2.31% yesterday

Key levels 2.27% and 2.50% for further DXY direction

10-yr Bund yield at 0.33% vs 0.33% yesterday

EURUSD

Volatility is extremely low, only central banks drive the market

Market not sure which way to go

Currently near fair value according to Barclays

USD needs to speed up otherwise we are again back to nowhere

Thus US yields the key, eventually stocks

Expiring options of note with strike 1.1600 (EUR 1.7 bln), much more between 1.1650-1.1700

Stops sitting below 1.1550

Bids sitting above 1.1500

Resistance at 1.1605 (50.0% Fibo), 1.1615 (high from May 2016), 1.1620 (200 HMA), 1.1658 (200 WMA), 1.1670 and descending trendline connecting the lows of Oct 2008, Jul 2012

Support at 1.1590 (55 HMA), 1.1570/50, 1.1500, 1.1490 (61.8% Fibo)

USDJPY

Higher US yields and stocks helped

Offshore investor flows into Japanese stocks continue

Resistance at 113.78 (10 DMA), 114.40/50, 114.72

Support at 112.97 (23.6% Fibo)

Data/events

Busy day with ECB speakers but Draghi firmly laid down dovish view few two weeks ago...

Any surprise today? As number of opponents is growing...

ECB’s Noy (0800 GMT)

ECB’s Coeure (1000 GMT)

ECB’s Mersch (1315 GMT)

ECB’s Constancio (1345 GMT)

ECB’s Villeroy (1500 GMT)

ECB’s Weidmann (1800 GMT)

ECB’s Lautenschlaeger (1820 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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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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Aug 7, 2017 - Market Update (DXY up from strong support, EURUSD correction shallow to 1.1700/1650, A look towards 1.2000 still on the cards, World CBs to reassess how aggressively hawkish they are, S&P sees Fed on hold ,3 hikes in 2018, Iron ore up 5.5% on China continuous stock piling, US stock options - already positioning for increased volatility, Glencore looking to buy into Rio Tinto's assets, UBS private banking with USD 2 trln of AUM)

Short recap

Asia in green

Europe opening higher

New sanctions against North Korea (supported by China/Russia as well)

UK ready to pay EUR 40 bln Brexit bill

S&P sees Fed on hold this year with 3 hikes in 2018

OPEC/Non-OPEC meeting today/tomorrow

Iron ore up 5.5% on China continuous stock piling

Equities

Glencore stretching muscles and increasing offer (USD 2.7 bln) for Rio Tinto’s assets

Deutsche Bank dropping from the list of world’s top 15 private banks

Hit by heavy bill of USD 14 bln for MBS mis-selling

UBS staying at the top with more than USD 2 trln of AUM

Weak USD to keep supporting global stocks further

Elliott disclosed 6% stake in NXP Semiconductors

Likely to make NXP sale to Qualcomm more expensive (USD 38 bln)

US stock options – stocks at highs, volatility at lows…and some investors are already positioning for increased volatility

Bonds

10-yr Trys yield at 2.27% vs 2.23% on Friday

10-yr Bund yield at 0.47% vs 0.45% on Friday

Higher yields are looming but market complacent

Central banks likely to be very cautious not to disturb the market

Funds stay long bonds, not looking to exit trades anytime soon

Recalling 2013 – still far from 3% yields, so visible action from funds yet

Vanguard and BlackRock not happy with bond traders being too complacent link 

Inflation in the U.S. bound to accelerate in matter of months

Bond traders are too complacent and TIPS ‘incredibly cheap’

COT report as of last Tue:

EUR longs at 83k vs 91k previously, cut by 8k

JPY shorts at 112k vs 121k previously, cut by 9k

GBP shorts at 29k vs 26k previously, increased by 3k

DXY

Jumped up from strong support zone (92.64 and 91.88)

NFPs may be seen as an excuse for correction in USD but US yields crucial

Fed expectations pivotal for further USD direction as well as policy direction of other central banks

As their more hawkish stance made their currencies to strengthen a lot versus USD

They are likely to reassess “how aggressively” they want to be hawkish

But it should support USD in a short term only unless political, tax and fiscal mess in US disappears

Have we already seen the top at EURUSD 1.1910 and bottom at USDJPY 109.84?

EURUSD

Shorts pared back some gains as US yields showed no change on market expectations of Fed policy

Support 1.1776 (200 WMA, last week closing below), 1.1772 (10 DMA)

Followed by 1.1723 (23.6% Fibo)

But the critical is the yield spread between Trys/Bunds

Not expecting a deep correction, likely 1.1700/1650 at this stage

Look towards 1.2000 still on the cards

USDJPY

Staying within a tight range

Bids placed from 110.00 up

Resistance 110.78 (10 DMA), 110.97 (61.8% Fibo) and Ichimoku turning line at 111.02

110.14 (76.4% Fibo) and rising trendline as support

Data/events

Mon

Fed’s Bullard (1545 GMT)

Fed’s Kashkari (1725 GMT)

Thu

Fed’s Duddley (1400 GMT)

Fri

Fed’s Kaplan (1340 GMT)

Fed’s Kashkari (1530 GMT)

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

Sep 29 US debt ceiling deadline

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 31, 2017 - Market Update (JPY of interest as safe heaven after CHF moving, MSCI not happy with Chinese suspended companies, Trys yield lower on softer GDP, Volkswagen not in a rush to sell Ducati, JP fund managers keep trimming equity exposure)

Short recap

Asia in green

Europe opening higher

Trump & Abe talked North Korea

JP fund managers kept decreasing equity holdings in July, especially North American assets

JP-US may discuss trade and currency as a one package

JPY may be of interest as a safe heaven choice after CHF is moving on ECB normalization

Equities

MSCI warned Chinese companies being suspended for trading for too long are at risk of getting excluded from index

Volkswagen not in a such a rush to sell Ducati and Renk

Audi going more green with EUR 10 bln cost cuts to fund green technologies

Bonds

10-yr Trys yield at 2.2.28% up from 2.30% Friday

Yields lower on the back of softer GDP figure and negative revision of Q1 GDP

10-yr Bund yield at 0.54% down from 0.53% Friday

Cleared earlier losses after higher CPI print from German

Greek 5-yr notes issued at 4.625%, lower then last time when they had traded

COT report (as of last Tue)

EUR longs at 91k vs 91k previously, no change

GBP shorts at 26k vs 16k previously, increased

JPY shorts at 121k (USD 14 bln) vs 127k previously, decreased

EURUSD

Market still skewed to go higher but serious caution is warranted

To watch this week’s EZ CPI, US PCE and NFPs as there is an interest to go short

But if we get lackluster prints the short squeeze is close

Close below 1.1653 (10 DMA) would suggest slowing momentum

Support 1.1621 (23.6% Fibo), 1.1615, then 1.1580

But breaking the 1.1600 can open the door to 1.1300

Resistance 1.1750, 1. 1776 (high), 1.1794 (200 WMA), 1.1810 (38.2% Fibo)

USDJPY

Asia saw some JPY buying, lower US yields in play too

Getting support from Ichimoku

Bids sitting at 110.50, more at 110.00 (around option barrier)

Stops likely below 110.00 and above 110.80, then naturally above 111.00

Resistance 110.97 (61.8% Fibo)

Gold

Resistance at 1274 (76.4% Fibo)

Support at 1261 (61.8% Fibo) ad raising trend line

Data/events

Wed

Fed’s Mester (1600 GMT)

Fed’s Williams (1930 GMT)

Fri

US NFPs – 173k exp

Aug 24-26 Jacskon 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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June 26, 2017 - Market Update (Low yields to pressure US banks, Italian tax payers taking EUR 17 bln bill, FX options - implied vols making lows, VIX at 10, Fed to keep hiking, EUR longs trimmed)

Short recap

Asia up

Europe opening higher

Trump ok to cooperate with Senate on healthcare bill

Mester/Williams to keep hiking

Goldman Sachs sees 25% probability of a recession in US over the next 2 years

BIS was out with very positive annual report saying global growth to reach long-term average levels

Sees high risk of still growing debt level due to low rate environment and productivity growth

Arguing central banks should normalise their policies. More  link

FX options – implied vols making new lows

Similar picture in VIX, trading around 10 level

Equities

Pre-earnings – investors looking forward to see strong earnings in order they feel comfortable with current market valuation (highest since 2004)

Low yields to bite US banks, may see the pressure this week in case of risk off

As the valuations of US banks need to reprise given the low yields

Takata filling for bankruptcy after worldwide airbag recalls

Chinese bank regulator pushing banks to implement reforms

Intesa Sanpaolo to receive assets, senior bonds from two failed Italian regional banks

Gov to cover EUR 17 bln hole, subordinated debt holders to take the hit

Nestle having a new shareholder (Third Point) that pushes for squeezing more juice out of the company for shareholders

Looks like GE’s acquisition of Alstom’s power biz is paying off with a new contract for power plant supplies in Romania

IT companies like Cisco, IBM or SAP are pushed by Russia to share cyber security info

Bonds

10-yr Trys yield at 2.15% - not much movement

10-yr Bund yield at 0.25% - despite the mess with banks in Italy, the IT-GE yield spread stable after huge drop in June

The hit subordinated bond holders took in IT can spread around within this space in EZ

EURUSD

COT report as of Tuesday last week:

EUR longs 45k vs 79k previously - after the highest since 2007, EUR long specs trimmed positions

US yields to set the direction today

Range 1.1100-1.1300 this week likely

Support at 1.1187 (23.6% Fibo)

Trading above 10 DMA at 1.1176

Just out of curiosity Morgan Stanley was out with 'Strategic FX Portfolio Trade Recommendations' – Limit order from May 18:

Entry: 1.1030

Target: 1.1800

Stop: 1.0800

The rationale:

“We expect the USD to rally modestly against EUR as the market reprices its Fed expectations. We would use that rally in the USD to sell vs the EUR.

Increased signs of pro-integration pressures emerging in Europe (eg. Macron, Portugal - Fitch upgraded outlook from stable to positive ... improvement in the periphery)

Stronger growth environment should bring inflows into the equity market. The risk to this trade is a slowdown in equity market”.

Data/Events

Fed’s Williams

ECB’s Draghi (1730 GMT)

Tue

ECB’s Draghi (0800 GMT)

Fed’s Williams (0805 GMT)

BoE’s Carney (1000 GMT)

Fed’s Harker (1515 GMT)

Fed’s Yellen (1700 GMT)

Fed’s Kashkari (2130 GMT)

Wed

Fed’s Williams (0730 GMT)

Central bankers meeting in Portugal (1330 GMT):

ECB’s Draghi, Constancio, Mersch

BoE’s Carney

BoJ’s Kuroda

BoC’s Poloz

Thu

Fed’s Bullard (1700 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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June 19, 2017 - Market Update (Macron win a huge potential for France, Fed speakers, US groceries shaking up, extreme long specs in EUR - a fall to come?)

Short recap

Asia up

Europe opening higher

China-Iran to conduct join naval practice in the Gulf

Iran firing over Syria

Trump doesn’t like Cuban salsa

Macron doesn’t need a coalition partner for important economic reforms

France has a huge potential if he delivers

PBOC made a huge CNY 110 bln OMO liquidity injection

Stating the declining liquidity after banks bought gov bonds (official statement)

Japan reported a surprise huge trade deficit on energy imports while exports made a fast jump on cars/steel

Fed’s Kaplan – Fed should be very cautious and patient in rising rates

Lots of speakers this week, let’s see whether others share the same hawkish view as Yellen does (check Data calendar below)

Macron, Schauble and now GE’s Zypries would welcome UK’s U-turn in Brexit

Equities

US groceries shaking on Amazon buying Whole Foods and Aldi entering the market

Is it going to end up for Wall-Mart as for Tesco in UK?

Do you like car makers? Watch for those with more exposure to China

As US auto sales to decline further on expiring leases pushing prices of used cars lower

Petrobras looking as an opportunity as it cuts debt but is still valued below industry average

Fiat-Chrysler exiting Japan?

Airbus upgraded its A380 to boost the sales

Bonds

10-yr Trys yield at 2.16% - still holding close to recent lows but the break of 2.10% would be critical for USD

10-yr Bund yield at 0.28%

COT report as of last Tue (pre-FOMC/ECB):

EUR long specs at 79k vs 74k week before

Highest since 2007

But bear in mind that any extreme is reverted to the mean in some time

Are we going to expect the same long specs reduction as we had witnessed in 2011/2014 ?

EURUSD

Support at 1.1187 (23.6% Fibo) then 1.1120/30

Resistance 1.1284, 1.1295/1.1300

Breaking 1.1100 or 1.1300 would definitely see strong flows and follow through

USDJPY

Likely heavy going to 111.50

Resistance at 111.24 (50.0% Fibo), then 111.32 and 112.16 Ichimoku

100 DMA at 111.85

Support at 110.50 (61.8% Fibo) and 110.71(200 DMA)

Descending trendline around 111.00

DXY

USD consolidation on halt?

To watch the US 10-yr yields breaking 2.10% or not

Need better US data to push real yields higher, so risky assets keep rising and financial conditions tightening

Close to resistance at 97.62, then 97.85 (50.0% Fibo)

And descending trendline around 97.98

Support at 97.02 (10 DMA)

Gold

Still under pressure post-FOMC

Support at 100 DMA at 1248, 1245 (61.8% Fibo)

200 DMA at 1237 and 1234 (76.4% Fibo)

Resistance at 1255 (50.0%)

Data/Events

No relevant data today but to watch speakers:

Brexit talks starting today at 0900 GMT 

Barnier and Davis speaking at 1630 GMT

ECB’s Lautenschlager (0900 GMT)

Fed’s Dudley (1200 GMT)

ECB’s Nouy (1300 GMT)

ECB’s Weidmann (1500 GMT)

Fed’s Evans (2300 GMT)

Tue

Fed’s Fischer, Rosengren, Kaplan

Wed

Brexit - Queen’s speech 1030 GMT

Thursday

EU Summit

Fed’s Powell

Fri

Fed’s Bullard, Mester, Powell

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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June 15, 2017 - Market Update

Short recap

Asia lower

Europe opening lower

FOMC – more hawkish than expected

Inflation expectations adjusted but Yellen sees a good ground for prices to keep rising

Likely start to taper in Sep, another rate hike in Dec

Some may ask why Fed doesn’t want inflation to overshoot

Trump under investigation for obstruction of justice

Looks like they are still trying to find something on him or is he really such a mess…?

ECB’s Nowotny questioning 2% inflation target as tons of money still not pushing prices to the target

Equities

Nokia entering the router market, where Juniper and Cisco do well, by launching the fastest network chips

Rosneft going offshore

Private equity eager investors pump USD 7 bln to new fund from Goldman Sachs

Bank of America sees opportunities in international cash management

US banks eying Saudi’s market as Morgan Stanley and Citi are there, and Goldman Sachs applying for a license

Looks like few reforms, upcoming Aramco IPO, Trump’s visit can make Saudi Arabia an investment destination

Google reached an agreement with Indonesia over future tax payments (I like this one…who wouldn’t like to cap the upcoming tax bill)

Thomson Reuters launching a set up to offer its data flow via blockchain technology

So the firms can use Ethereum and Corda based trading systems with Reuters data

US financials, especially life insurers, to benefit from rising rates

While utilities, telcos and real estate on short term negative side

Resources stocks to offer an interesting value

In particular energy but need some credit events and cleaning within the space

Canadian Natural Resources, AltaGas, Roxgold can be looked at

Bonds

10-yr Trys yield at 2.14% - yield development is crucial for further direction of EURUSD and USDJPY

10-yr Bund yield at 0.23%

EURUSD

What’s next? 1.0500 again or 1.1500? …asked the questions yesterday but today too…

Consolidation lower after FOMC is on the cards

Resistance at 1.1231 (10 DMA) with sellers sitting around

Then 1.1300 (based on FOMC price action)

Support at 1.1200, 1.1180 (23.6% Fibo) and 1.1120 (38.2% Fibo) but strong at 1.1013 (61.8% Fibo)

USDJPY

Bids sitting between 109-109.50

Offers seen going to 110.00

With decent options expiring today and tomorrow at this level

Crucial resistance at 110.50 (61.8% Fibo) and 110.61 (200 DMA)

Support at 109.60 (76.4% Fibo), then at 108.12

Upcoming Data/Events

Basel Committee concluding meeting over bank rules

ECB’s Draghi and Coeure at Eurogroup meeting

Greece – any resolution? Again at least temporary?

Fri – Fed’s Kaplan speaking

June 18 – French Legislative (Parliamentary) elections

June 19 – Brexit talks starting ?

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 24, 2017 - Market Update

Short recap

Asia effected by China downgrade

Europe opening lower

Markets shifting focus from risk off set up to June FOMC meeting

1^st Trump budget sent to Congress, being ignored as such?

Moody’s downgraded China to A1 from AA3, outlook to stable from negative

On the back of debt burden and its implications on public finances, and slowing growth

Only 12% of debt owned by foreigners, should not send shock waves across EM

Bernanke – BoJ should coordinate fiscal spending plan with gov to reach 2% inflation

While staying debt neutral

US housing on track

Equities

Bunge declined any talks with Glencore 

FiatChrysler officially facing an emission cheating legal action

Apple and Nokia friends and in love again, Apple looking to buy more from Nokia

Or more tighter partnership coming? Health, patents, royalties…

Shell selling its stake in Canadian Natural (CAD 4.1 bln)

Cyber security demand pleasing BlackBerry

McDonald’s to face some protests about wages, unions

HP should benefit from more stability in PC market and effects of restructuring

Bonds

10-yr Trys yield at 2.28%%

10-yr Bund yield at 0.41%

Market getting more comfortable with June rate hike (probability of 78%, two more hikes this year probability at 43%)

As the yield in 52-week bill auction comes to 1.145%, highest since 2008

And 2-yr note at 1.316% (strong auction) highest since 2008 (May 10 high at 1.360%)

EURUSD

US yields helped USD

Still need a deeper break of 100 HMA at 1.1182

Support clinging around 1.1160 with orders sitting there

But market is looking at 1.1100 now

Market keeps speculating about ECB change of rhetoric at June 8 meeting

Despite recent speeches by officials - not open to such thoughts: QE taper first, then rate hikes

USDJPY

Offers likely above 112.00 (38.2% Fibo at 111.98 and USD 2.6 bln option with strike at 112.00 expiring today)

Ichimoku at 111.81, bids likely below 111.70

50 DMA at 111.32 and 50% Fibo at 111.24 acting as support

Iron ore down approx. 7% on China downgrade

While its inventories keep rising in China

Prices hitting the lows of the cycle, negatively impacting AUD as well

Crude oil

Oil remains bid but further rise is limited due to US shale and slowing China

Crucial whether the potential cut is also on export side, not just in production

Upcoming

ECB’s Praet (0830 GMT)

ECB’s Draghi (1245 GMT)

Fed’s Kaplan (2200 GMT)

Fed’s Kashkari

FOMC Minutes – to bring a bit of hawkish tone as Fed feels that Q1 data were transitory

Minutes remind market that Fed is on the watch list going to June meeting again

Focus on interpretation of inflation, taper strategy and job market (slack/no slack)

Thu – OPEC/Non-OPEC meeting

OPEC meeting 0800 GMT

OPEC/Non-OPEC meeting 1300 GMT

OPEC Joint press conference 1500 GMT

Full schedule  link

Expect headlines as attendees arrive

Fri – G7 meeting

May 31 – former FBI director James Comey to testify before Senate

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 

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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