May 5, 2017 - Market Update

Short recap

Asia lower on commodities losing the ground on worries about the global growth

Europe opening lower

DAX printing new historical high

Praet pushed EURUSD higher with ECB guidance shift to focus on data

House approved new healthcare bill

Now it is heading to Senate where it will face a strong opposition

EZ to grant a relief on Greek debt but reforms first

Equities

Ferrari driving super high

Having the room to go even higher among luxurious brands based on fundamentals?

Johnson & Johnson to pay USD 110 mln in cancer dispute

CIBC making offer for PrivateBancorp better (USD 4.9 bln)

Earnings season,

Berskshire Hathaway reporting, the annual shareholders meeting to follow

Bonds

Bond markets pricing in Macron’s win

FR-GE spread down to 44 bps

10-yr Trys yield at 2.35% - substantial rise on June hike expectations

10-yr Bund yield at 0.38%

EURUSD higher ahead of French elections

Move in EUR, not USD

Strong resistance at 1.1020 (descending trendline on daily chart)

But USD strength can come from much better headline NFPs or earnings rising more than +0.3%

Eventually, the rising peripheral spreads

Data

US: NFPs – market not expecting any surprise based on strong ADP

Full focus on earnings growth given the full employment

Headline +185k exp. vs +98k prior

Unemployment rate 4.6% exp. vs 4.5% prior

Average hourly earnings +0.3% exp. vs +0.2% prior

Fed speakers (GMT):

Fischer 15:30

Williams 16:45

Yellen, Evans, Rosengren, Bullard 17:30

Upcoming

Sunday – 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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Feb 6, 2017 - Market Update

Short recap

After FOMC and NFPs – markets should be focusing on steps with longer term impact like Fed hiking, roll-back of Dodd-Frank regulation, intrustructure, Obamacare and tax reform than short-term vows over immigration ban

EURUSD – 1.0800/50 still in place and the same goes for DXY at 99.00/50

From technical perspective unless both levels are broken, market is looking at USD from positive side (technically) despite still broad negative outlook

Further resistance around 1.0821/75 area with 200 DMA (may be eventually tested)

USDJPY – below important 112.00/50

AUDUSD – 0.7830 is critical

The bullish USD view to be reviewed if all of the above mentioned levels are broken.

EURUSD – may be verbally supported by the criticism for example from Schauble, who is not happy with weak EUR as it is negative for productivity even though Germany enjoys huge surpluses. His verbal comments are not to last long as he also knows that monetary policy is set for the whole EZ and not just Germany.

This fact, especially in the light of situation in Italy, may not be fully priced in by the market as the still rising divergence in inflation and economic growth among EZ countries is not either. Just by looking at widening of peripheral spreads warrants that ECB will not change its policy anytime soon. There is also another risk coming from regulation of sovereign bond holdings limits for the banks, what may in turn trigger the sell off in Italian bonds. If that happens, the ECB would need to step in. One shouldn’t be surprised if EURUSD rate depends on BTP-Bund spread and moves in tandem. Actually, that would be more accurate valuation metric along with political risks in EZ that trading EUR based on German economy.

Williams (Fed) was out after NFPs on Friday confirming that March meeting is a live meeting, thus opening the door for markets to learn more from Fischer as well as Yellen’s testimony on Wednesday next week.

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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