Feb 7, 2017 - Market Update

Short recap

Asian shares under pressure from political risks
Investors seeking refuge in JPY, Gold, US Trys (yield 2.39%) and Bunds (yield 0.34%)
Trump fully supporting NATO
Bill Gross from Janus Capital – yields will rise but to stay low
The 2.60% yield in US 10-yr Trys to be watched

EUR lower on widening spreads in the light of political risks; market is getting nervous as the ECB is out with QE for quite some time but spreads are rising
GE-IT spread to 199 bps
GE-PT spread to 385 bps; if spread rises further, the volatity may turn to EU equity markets
GE-FR spread to 80 bps (last time seen at these level or above back in 2011/12)
FR bonds may experience volatility as 60% is owned by foreigners
French election uncertainity making clouds over EU equities

As we are getting closer to April/May it may be the time to look at EU stocks because they are lagging their US peers on valuation what may create interesting buying opportunities going on Energy stocks – a bit worrysome as the market is priced well above current oil price levels and its outlook; debt burden starting to bite

Oil specs – stronger USD and 9 long-to-1 short futures positioning can be heavy
Gold benefiting from political risks in EU and heading to 1250 level, 1220 now support.

Gold/EUR interesting opportunity – broke to the upside the declining trendline (on lower yields, stronger JPY)

Data

GE: Industrial Production (Dec) – expecting higher number
US: Job Openings & Labor Turnover Survey (Dec) – slightly up
JP: 10-yr Government Bond Yield – stabilized around 0.09-0.10% after hitting 0.115% last week.

BoJ target Bank of France Governor Galhau speaking 1630
ECB: Weidmann speaking at 1635

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

Read More

Jan 27, 2017 - Market Update

Short review

• Trump/Mexico – 20% import tax mirrors the Trump’s view of doing serious business with Mexico
• Saw some position squaring ahead of next week FOMC and NFPs

• BoJ was active within 5-10 year bond space what helped USDJPY higher; this action came after announcement that BoJ will not act within shorter maturities space
• BoJ trying to manage the yield curve (yields around 0.1% level but the effect is translated into JPY moves only and not really affecting bond yields
• Is Kuroda testing the market?

• US equities in uptrend, supported also by strong earnings
• More EU names to report next week what will keep equity markets busy
• Microsoft doing well in cloud business

• Bit of consolidation in bonds
• Italian and Portuguese bonds having hard times what may be on the account of speculation/opinion clash about QE taper from ECB
• While ECB is pushing back any talks about QE taper, bond market is already pre-positioning for such a move
• Longer maturities are reacting, pushing Italian and Portuguese yields higher (where they may eventually trade without QE)
• Bund yields also heading higher thus lowering the spread with US Treasuries (very last picture bottom right)

• Theresa May meeting Trump today; more at  link
• Trump to speak with Putin on the phone tomorrow

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

Read More

Dec 12, 2016 - (Weekly Tech Overview): JPY - any one with jen short term ?

Hi,
this time focus on JPY short term ( based on weekly charts). There is a chance to see xxxjpy pullback, short term sell opportunity ( long jpy ) before rally resume. Think all the charts below are self-explainotiary, enjoy:

AUDJPY Weekly:

CADJPY Weekly:

EURJPY Weekly:

GBPJPY Weekly:

USDJPY Weekly:

Please let us know should you have any additional questions or you would like to discuss other crosses as well. We are here to help you, just contact us at: landoftradingATgmailDOTcom.

Happy Trading

Mr Price Action


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: landoftradingATgmail.com

Read More

Dec 11, 2016 - (Trade Idea) MXNJPY as our 2017 TOP TRADE

Hi,

For many of us it is the time to start to think about upcoming 2017. I went through few charts (weekly, monthly...etc.) and would like to share a view of more investment than trading view of MXNJPY from long side. There is more to come but let's check this on first.

What is the point?

1. I do believe that MXN sell off (mostly related to Trump victory) is well overdone
2. I think the new US president does not want to destroy neighbours and it is mostly a media case for him to have something to talk about
3. Interest rate differential
4. JPY sell off just started
5. Carry Trade

Please let us know should you have any additional questions or you would like to discuss other crosses as well. We are here to help you, just contact us at: landoftradingATgmailDOTcom.


Happy Trading

Mr Price Action




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

Read More

Nov 6, 2016 - (Weekly Tech Overview) US Elections: Clinton vs Trump - MXNJPY vs CHFPLN

Hi,

You may wonder why we are discussing here non-USD related crosess ?

1. We do believe that extreme FX moves may happen outside of the dollar basket (due to lack of liquidity as one of the reason)

2. We are going to watch the USD moves real time and you are welcome to join us as well. Please follow Us on Twitter

or

Free Forex Live Trading Room (till the end of 2016) - Join Us again next week - click here

Before we start I strongly recommend to check Madam or Mister? What are our market expectations?

Ok, let's start now!


1. Hillary Clinton WINS:

MXNJPY long position as Trade of the Month:

- Risk-on trade
- Supported by Technical Analysis (Weekly Chart below)
- Reverse of current overall MXN weakness (mostly because of Trump camp strength)
- Reverse of current JPY strength (safe heaven flow)
- MXN may find support in Oil (if Hedge Funds decide to get back to buy oil/sell gold idea)

MXNJPY Weekly chart:

2. Donald Trump WINS:

CHFPLN long/adding to long position (this is an update to our Weekly Tech Overview from Sep 13, 2016 available here), so far so good as bulls were able to close above psychological 4.00 level:

- Risk-off trade
- CHF safe heaven flow
- PLN political uncertenity adding to the weakness
- PLN weak fundamentals

NOTE:
- Possible SNB intervention with EURCHF below 1.08
- Possible NBP (Polish Central Bank) intervention (casue of the end of the year and CHF borrowers in Poland)

CHFPLN Weekly chart (from September):

Please let us know should you have any additional questions or you would like to discuss other crosses as well. We are here to help you, just contact us at: landoftradingATgmailDOTcom.

Mr Price Action

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 www.landoftrading.com Contact: landoftradingATgmailDOTcom

Read More

(UPDATE 2) Sep 23, 2016 - (Trade Idea) Forex: USDJPY - buy orders

Hi,
as all our orders have been activated and market is moving our way, it's time to update stop orders...

Original Trade Idea is here.

Updates ( in a red ):

1. Limit to buy at 100,70 and limit to buy at 100,00 ( avg 100,35 ) with stop offer at 99,40, target is open. Total Risk 0,5% / Stop has been moved higher from 100,70 to 101,25 ( for both positions )

2. Stop buy 101,25, stop offer 100,40, target open / Stop has been moved higher to 101,25

Will make an update once price reach 102,20/50.

Please let us know should you have any additional questions or you would like to discuss other crosses as well. We are here to help you, just contact us at: landoftradingATgmailDOTcom.

Happy Trading

Mr Price Action

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: landoftradingATgmail.com

Read More

Sep 23, 2016 - (Trade Idea) Forex: USDJPY - buy orders

Hi,
yes, we were wrong a bit with FOMC but BOJ did the job ( as expected ) in our opinion.
So we went through med/long term charts again ( our pre BOJ analysis here ) and we are USDJPY buyers, please check details below:

Medium Term Trade Idea details:

currently we are trading right under intraday resistance, so we do have two options ( both are active ! ):

1. Limit to buy at 100,70 and limit to buy at 100,00 ( avg 100,35 ) with stop offer at 99,40, target is open. Total Risk 0,5%

2. Stop buy 101,25, stop offer 100,40, target open

Will make an update once price reach 102,20/50.

Please let us know should you have any additional questions or you would like to discuss other crosses as well. We are here to help you, just contact us at: landoftradingATgmailDOTcom.

Happy Trading

Mr Price Action

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: landoftradingATgmail.com

Read More

Sep 20, 2016 - Weekly Tech overview: (Forex): USDJPY: Is it really bearish ? Check again...

Hi,

Now it is a BOJ time - the time to deliver ( it is exactly what weekly USDJPY chart is saying :) )

When someone is trying to tell me something and I do have a problem to believe him/her I like to check it by myself...

Almost everywhere we can hear that BOJ will NOT deliver and JPY will be stronger...etc.

Please check the weekly USDJPY charts below ( both are the same but one is giving a closer look ) and correct me if I'm wrong but they are trying to foolish us as much as they can. 

Ok, what's my point ?

As you can clearly see the USDJPY is testing broken/falling trendline ( first chart ) and also bulls are very close to leave weekly falling channel ( second chart )... so in my view it is not bearish, at least not now...

And again on the contrary to the rest, I think BOJ will do enough to ensure higher prices but...I'm not that imprudent and definitely not going to trade it blindly. 

Feel free to heck the notes on the second chart what and when will invalidate the bullish scenario ( in short: closing back under the TL + failure when the bulls will try again to move above ). 

Good Luck!

USDJPY weekly:

USDJPY weekly:

Please let us know should you have any additional questions or you would like to discuss other crosses as well. We are here to help you, just contact us at: landoftradingATgmailDOTcom.

Happy Trading

Mr Price Action

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: landoftradingATgmail.com

Read More

Sep 18, 2016 - Bank of Japan meeting (Sep 20-21) – a comprehensive policy assessment

The decision making will be “pretty difficult” as their fellow colleagues from FOMC will be deciding on exit strategy couple of hours later the same day. Actually, we believe they already know about the FOMC decision at this point.

But let’s focus on a few facts about BoJ first:

-          Expecting a comprehensive assessment of monetary policy, its tools and effects, economic activity – positive words, not really pointing to negative effects

-          Confirming that negative rates and asset purchases helped to lower the funding costs for corporates, not caring much about banks

-          …but all of that is very questionable for banks as their profit margins got squeezed or turned negative (latest call on BoJ officials from one of biggest Japanese banks to take into account negative effects of low or negative rates). Also the pension funds and savings suffer what is not offset by rising consumption of aging nation as Japanese are. From this perspective, the Japanese companies are more worried about pension obligations than effects of borrowing costs on their business.

-          Actually the aging and heavily indebted economy is becoming less and less flexible and responsive to any policy actions to ignite the growth and inflation. Japan as a country will have to face very tough structural reforms and need to globalize the corporate sector more in the near future.

-          While looking at the asset purchases of stocks, corporate bonds, ETFs…etc., we are not sure whether BoJ, already in some cases a significant shareholder of some companies, is analysing its steps, influencing the board decisions…etc. – what is really insane just as a fact itself that central bank is a shareholder…!!! Aren’t we witnessing currently a global nationalisation…?

-          Inflation still well below 2% target with long term expectations being very weak too (don’t blame oil only)

-          Economy still not able to grow at desirable pace but some positive signs are here

-          The yield curve has started to steepen recently – a sign of markets expecting something from BoJ (for example more flexibility with bond purchases, reducing of purchase on longer end or tapering…etc.). Bear also in mind that any spike up in JPY may be short lived as higher long term yields are usually negative for JPY.

-         Opinion split between BoJ officials, as well as officials and government is becoming more visible (more negative rates vs bond purchases vs none of them).

Our expectations:

-          Overall we expect BoJ to be very bold about its decisions but still may disappoint the markets as Kuroda’s team will keep some room for a follow up action after FOMC decision. In other words they will come up with a bit more flexibility, few tweaks of QE, eligible assets (local or foreign bonds), maturities...etc. and as a reaction the USDJPY will be falling towards 100, then reaching the recent lows around 99, and if there is no action over coming weeks/months it can even move lower to 95 or so.

-          Further rate cut is possible, especially as an attempt to widen the yield spreads with US Treasuries once the JPY starts to strengthen again and also to move more from JGB purchases in order to steepen the yield curve at long end, thus giving the banks a chance to increase margins (deposits vs loans).

On the upside we see for USDJPY the resistance levels at 102.50, 103.50, 105.00 and 107.50. From technical perspective closing on weekly chart above 104.50/105.00 levels opens the sky as a limit for USDJPY.

-          Next meeting is on Oct 31-Nov 1 but the action (for example intervention) can take place even before that meeting especially, in case of significant JPY strengthening to USDJPY 100 or below level

-          Improving predictability and communication/guidance would bring lots of clarity to markets. May be they are not sure what to do or are split and that’s why they do not communicate properly (Fed officials come to my mind with this point as well)

-          As per CFTC commitments of traders report as of Sep 13, 2016 the speculators were long 57k JPY futures contracts vs 54k previous week what may tell us that the market has either doubts about BoJ actions or is not expecting the move

-          In case of a combination of no action from BoJ and Fed we may refocus ourselves on US presidential debates and elections on Nov 8, as the range bound trading will continue once the dust settles.

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

Read More

Sep 4, 2016 - Weekly Macro - 36W

Previous Week Summary

Last week was all about waiting and positioning ahead of Friday’s US NFPs. Stocks ended the week more or less flat, most FX crosses traded within the ranges and despite the EURUSD 30 pip spike higher after NFPs release, which was corrected below 1.1200 later during US session, markets didn’t do much. One and only exception was crude oil, which fell down 7% pushed lower as the markets are oversupplied and the risk of no agreement outcome at Sep 26-28 OPEC is high. The tensions among OPEC members are being felt in the market, despite Russian President Putin calling for agreement on production freeze.

Monday – JP – Jobless rate reaching multi-decade low levels at 3% but is it really helping the BoJ’s hunt for inflation? US Personal income and spending for July rose and were in line with expectations, while Core PCE was higher too and in line on monthly basis. The yearly one saw a slight uptick higher versus expectations.

Tuesday – EZ – Business climate was worse and Consume confidence dived (in line with expectations) in Aug while in US it hit the highest level over the last year.

Wednesday – CN – PMI data were back to expansionary territory again. EZ unemployment and CPI not boding well for ECB. US – ADP data showed a nice rise to 177k vs 175k expected and Chicago PMI was worse. Meanwhile, Pending Home sales rose in Aug. Brazil – President Rousseff was sent back home but on the other side as expected, the BCB kept the rate unchanged at 14.25%.

Thursday – a bit of surprise for the market was PMI Manufacturing figure from UK that jumped back to expansionary territory (to 53.3 vs 49.0 exp.). Very likely manufacturers got pleased my weaker GBP. The Final US – Nonfarm productivity felt in line with expectations while ISM Manufacturing PMI was the lowest over the last 3 months.

 

Friday – well, a big day in terms of expectations but not reflected in the market…US NFPs rose 151k vs 180k exp., Unemployment rate was slightly up to 4.9% vs 4.8% exp. as more people entered the job market but Average hourly and weekly earnings slightly dropped. Maybe a summer kind of vacation fever effect?

Despite seasonality, the increase of 150k + revisions after two months of very huge gains are a good case for Fed to raise the rate in Sep. More on nearing full time employment and its effect on  link . Lacker (a Fed hawk but non-voter) was out later after NFPs saying that the Fed funds rate should be considerably higher. Bill Gross of Janus as well as Goldman Sachs see the hike likely in Sep while Pimco and Mohamed El-Erian from Allianz SE are not that much open to such a move in Sep.

From corporate world – speculations about SolarCity and its ability to avoid bankruptcy were circulating in the market. The EUR 13 bln back tax request for Apple that was imposed by European Commission after it started to look closer at Irish tax system is here and irritating Apple, Ireland and US. Are we just ping-ponging the ball after the BNP USD 9 bln payout over US Sanction list or US government just gave an idea to European Commission some time ago when they started to complain about US multinationals trying to avoid paying taxes by moving operations abroad?

Upcoming Week Outlook:

We have this week 3 rate decisions (Australia, Euro Area and Canada) and the key event is the ECB meeting. We also expect diary price index from New Zealand as the indicator of one of the key sectors of the economy and GDP from Australia and Japan. We will end the week with inflation figures from China and employment data from Canada. Here are the details:

Monday (AUD, JPY, GBP):

We will start the week with the quarterly rate of change in operating profits from Australian companies, which was declining in the recent months. Traders will look for signs of recovery especially ahead of the rate decision scheduled for Tuesday. Kuroda will speak in the middle of the Asian session and the speech will be watched in respect to expected helicopter money and possible hints regarding cooperation with government on the fiscal stimulus side. At the beginning of the European session the UK Service sector PMI, which could bring better than expected results due to a positive surprise in Manufacturing PMI last week, will be watched. On Monday, we have bank holiday in US & CA, so expect subdued liquidity.

Tuesday (AUD, USD, CHF, NZD):

The first major central bank meeting of the month will take place on Tuesday. Watch the RBA statement for insights how the policy makers see the Australian economy after the August rate hike. At the beginning of the US session, the ISM Services PMI will show whether the mood in the sector is following the manufacturers. The Polish National Bank will meet also and there is an increasing probability of a rate cut in the biggest V4 country. SNB’s governor Jordan can bring some volatility to CHF crosses too but also kiwi traders should follow the diary price index.

​Wednesday (AUD, CHF, GBP, CAD, USD, JPY):

Despite plenty of news ahead on Wednesday, don’t forget that traders will be waiting for the ECB on Thursday, hence the liquidity will be dried up. We are starting the day with Aussie GDP, which posted a surprise jump in growth, but the Q2 GDP growth is usually much weaker than the previous figure. At the beginning of European session change in UK home prices and manufacturing production will be released, and both declined last months, while further decline is expected mostly due to the Brexit vote. At the G20 meeting on Sunday, Theresa May had to face quite serious Brexit warnings from US and Japan. The Canadian rate decision is scheduled at the beginning of the US Session. The country’s GDP declined last Q and the trade balance is in falling trend. The dependence on oil with the depressed crude prices and the inflated housing market are the key problems the nation’s facing. There is no change expected in the overnight rate but the statement can cause some volatility. The same time US job openings will be released with lower figures expected due to the job market close to maximum employment. At the beginning of the Asian session Japanese final GDP and Current account may give a boost to volatility. In case of GDP decline the possibility of “helicopter money” topic will get back in focus.

Thursday (CNY, EUR, USD, CAD):

The Chinese Trade Balance (rising since May) can create some volatility in the early trading but all eyes will be on the ECB rate decision and press conference later that day. The analysts are divided whether the ECB will act now or will stay on hold as the PMI figures are close to pre-Brexit vote levels. The same time with the press conference the Canadian housing market data will be released and also Crude oil inventories can move the CAD crosses. 
Providing the ECB will act, the following options could be considered:

Extension of asset purchase (currently EUR 80 bln monthly until spring 2017

Change in the rules which corporate bonds could ECB purchase

Rate cut, the least likely option for the policy makers

Friday (CNY, GBP, USD, CAD):

Chinese inflation will start the data flow where both CPI and PPI will be released by the National Bureau of Statistics . The consumer inflation is slowing down for the 4^th consecutive month and another decline is expected. On the other hand producers prices are falling and even the pace of decline is slowing, analysts expect another negative number. The deficit of the UK Goods Trade Balance is expected to come out a little narrower. Midday FOMC voting member Rosenberg speaks at South Shore Chamber breakfast in Boston about the economic outlook that could cause some moves in USD crosses. The Canadian Employment figures are out later and as the last month’s data were not encouraging (both the Employment change and the Unemployment rate came out worse than expected) the key is, if this was a temporary weakness or a beginning of a negative trend for the nation.

Please check below the Event Risk Calendar for better overview and times. We prepared also a Central bank meeting schedule for september.

Don't forget to watch your risk and be consistent in trading.

Good luck Champs!

Mr Hawk & Mr Tech Man

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

Read More

(Video) USDJPY - FOMC & BOJ next - Trading Plan

FOMC and BOJ next, where USDJPY will go next? Short video update and intraday trading plan

Read More

Weekly Macro Overview - Week 30

After the failed Turkish coup attempt market started the week in quiet tone. Despite it was an ECB week the EURUSD was stuck in 100 pts range most of the week but closing Friday below the 1.0980 as light negative momentum seems to be prevailing. Two most interesting moves of the week were the USDJPY sell off on Thursday after a release of a rather old interview with Kuroda, were he rejected the idea of helicopter money. The second was on Friday caused by the record weak UK Services PMI followed by a 180 pts sell off in cable.

Monday - The New Zealand CPI came out little worse than expected but better than previous (0.4% vs exp. 0.5%, prev 0.2%) stopped the selloff from the record highs of the previous 14 months. The main upward contributor was Petrol, also real estate prices rose. The Quarterly inflation is in an uptrend this year after the 4Q dip of -0.5%. Also from Monday there were news that Italy is working on setting up a bad bank to clean up the banking sector. According to Fitch rating agency, Japan may face fiscal risks after activating planned government stimulus package.

Tuesday – the UK inflation figures came out much better than expected. CPI y/y 0.5% vs exp 0.4% & prev. 0.3%. IMF again cuts world growth outlook for 2016 (3.1% from 3.2%) & 2017 (3.4% from 3.5%). The ZEW economic indicators were much worse than expected both for Germany and the EZ too mostly due to the uncertainty around Brexit, EURUSD had a delayed reaction 75pips to the downside. The US housing market was more or less in line with expectations while Housing starts seems to be stabilising around 1.2 mil the Building permits are in downtrend from last summer record highs, which could be a leading indicator of the slowing momentum of the economy. The GDT price index of diary auction in New Zealand was better at 0% than the previous months but still not indicating any growth momentum in the most important industry of the country no growth.

Wednesday – the main focus was on UK employment data. The Average earnings increased 2.3% in line with the expectations  while New claimants number went down to only 0.4k but the previous reading was revise to the upside from -0.4k to +12.2k. Unemployment rate was 4.9% vs exp/prev 5%. The Crude inventories declined more than expected.

Thursday – ECB day but we started with the economic outlook of RBNZ which dragged down the Kiwi (NZDUSD) after the CB clearly stated that the NZD exchange rate is too high, damaging the diary and manufacturing sector. The ECB didn`t change monetary policy as expected. Draghi stressed several times during the press conference that it too early to assess the Brexit effect but ECB is prepared to do whatever its needed inside his mandate to balance negative impact. Afternoon the US Unemployment claims came out better than expected and it seems to stabilize around 250k. The Philly manufacturing index couldn’t hold the positive pace from last month when dipped below zero. Existing home sales kept rising in June for the fourth consecutive month so overall we closed a USD positive day.

Friday – In the morning we saw several European PMIs coming out better than expected more or less in line with the consensus. The worst was the UK services PMI which hit the lowest level since April 2009 (at 47.4 from 52.3) followed by a 180 pts sell off on Cable in the next few hours. According to Reuters Greece eased slightly Capital Controls after creditors approval. The Canadian inflation data came out as expected (0% m/m 2.1% y/y) however lower than the previous month. The speculative net long in WTI keeps declining, last week at 289.6k from the peak in May at 368.8k.

Next week we have FOMC rate decision where no change is excepted in the wake of the shock vote for Brexit in the UK in June. However, traders will look for indication if there is any chance for a hike in the US this year. The Calendar is also full of prelim GDP figures from UK, EZ, Canada and US which can move the market.

Monday – in the morning the German Ifo Business Climate is expected to break its improving trend reflecting the worsening mood among managers, business owners after the UK voters decided to leave the EU. Late night the New Zealand trade balance figures could add some pressure on kiwi.

Tuesday – we have a few interesting data out from US starting with S&P home price index 1:00 PM and Flash Services PMI at 1:45 PM. However, the most important will be the Consumer Confidence published by the Conference Board Inc. which expected to maintain the downward trend from the beginning of last year. The same time the New Home Sales will give some hints what`s behind the declining trend of building permits but stable housing starts data.

Wednesday – in early morning the AUD traders may see some rock&roll as the quarterly CPI data may confirm the negative trend even a rebound is expected due to the higher commodity (mainly oil) prices. Later in the morning the forts GDP data of the week will be released in the UK, where the consensus expectation is slight increase to 0.5% from 0.4%. However due to the pre-Brexit negative sentiment could have caused some surprise. In the afternoon US Durable Goods orders and Pending Home sales will come out prior the FOMC. Even there are expected some improvement they will probably have diluted impact due to the upcoming rate decision in the evening where the Fed is expected to keep rates on hold and the statement will be the main driver. Don’t forget there will be no Press Conference this time.

Thursday – after FOMC the market will be digesting the news and therefore the early morning German CPI and Unemployment will not cause big moves. The main event will be the US jobless claims in the afternoon which seems to be stabilizing the last 3 months. Late night or for some early morning there will be a bunch of Japanese data in 20 mins starting with CPI, Unemployment, Retail sales and prelim industrial production mostly with medium importance.

Friday – early morning the Japanese Monetary Policy Statement and Rate Decision is due with the BOJ`s outlook report and press conf. Later European prelim GDP will be released at GMT 9:00 AM with An expected moderate 0.1% increase in the annual rate.  After the lunch break the markets will focus on Canadian and US GDP. While the Canadian monthly figures are expected to decline, the Quarterly US GDP is expected to rise annually to 2.6%. Keep in mind that this is the first US GDP release this used to have the most impact on the market.

One more thing, Friday late evening the European Bank Stress Test Results will come out and this could mean a significant risk if some big banks or several smaller players would fail. Italy will be in main focus due to the current discussions about the huge amount of NPLs in the country’s banks.

Watch your risk and be consistent.

Risk Event Calendar:

Mr. TechMan

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 www.landoftrading.com Contact: landoftradingATgmail.com

Read More

Weekly Macro Overview - Week 29

Previous Week Summary

The whole week we saw risk on flows on the back of few positive news as Theresa May becoming UK’s PM, BoE and BoJ getting ready for more stimulus, Fed officials expressing patience about rate hikes, pretty good start of earnings season…all of that pushing stocks strongly higher. For stocks to keep the momentum we would need to have decent earnings coming in. Meanwhile, bond yields moved higher and USD got some strength on the back of better US macro data that renewed Fed rate high thinking.

Monday – BoE looking at curbing the cash withdrawals from real-estate funds, UK to strengthen ties with North America invest in infrastructure. Spain & Portugal may not eventually face the fines in EU budget procedure.

Tuesday – Japan to end deflation, stimulus by month end, no seize/sources of financing. BoE – will do all what is needed to secure financial stability after Brexit. Spain & Portugal under official deficit procedure. EU pushing on UK to trigger Article 50. Philippines-China court ruling on South China Sea – no historic title to it, would likely negotiate before G20 meeting in Philippines. Bullard (Fed) – one rate hike in a foreseeable future possible, economy stuck with low growth, inflation and unemployment, sees 2% inflation and unemployment rate at 4.7% in 2.5 years, monetary policy can’t change productivity, housing market to improve. US JOLTS job openings at 5.5 mln in June vs 5.85 prior, slight correction of preferred measure of Fed’s Yellen. UK Parliament may debate as early as on Sep 5 the possibility of holding a 2^nd Brexit referendum because of 4.1 mln petition.

Wednesday – EZ May Industrial production worse, previous revised higher. Japan should expand fiscal/monetary stimulus, should buy bonds not go for negative rates. Scotland reiterated its intentions to stay in EU. US Mortgage applications lower than expected, BoC – no change in rates, Q2 GDP – negatives: volatile trade flows, uneven consumer spending, wildfires. Financial conditions remain accommodative, lower CAD helps exporters but may not drive growth. Theresa May officially becoming a new UK PM, Boris Johnson new Foreign Affairs Secretary what may be joke towards EU but he will not lead the Brexit talks with EU.

Thursday – Japan discussed perpetual bonds with Bernanke that would be bought by BoJ, thus underwriting government debt (illegal according to Japanese constitution), JPY weakened, rumoured JPY 10/20/35 trillion fiscal/monetary stimulus by month end. Japan Rating Agency JCR cut outlook to negative from stable & affirmed AAA rating. Schauble-Lew expressed mutual support on Brexit, G20 meeting; Weidmann (ECB) – EU must have solid foundation. BoE - surprising no change in rates, getting ready for August. Job offerings lower after Brexit, businesses cutting investments. US June Final PPI better, Initial Jobless Claims better, previous revised lower.

 

Friday – Italian banking crisis – solution to be found, US funds looking at some buying opportunities in Italian banks. Japanese banks don’t like idea of borrowing from BoJ at negative rates. ECB – non-performing loans in Italian banks a problem but manageable. Weaker JPY an obstacle for helicopter money, UK May Construction output worse, EZ June CPI in line M/Y, BoE to make a 40 bps cut in Aug, launch GBP 50 bln QE in Nov (according to Morgan Stanley), US June CPI lower M/Y, Core CPI higher, June Advanced Retail sales higher, July Empire Manufacturing better but new orders bad, June Industrial Production better, July Preliminary Univ of Michigan Consumer Confidence lower than expected, May Business inventories better. German government to safeguard small investors in Italian banks, creditors to take losses.

Nintendo shares are up 70% on new application high interest. These levels are very difficult to justify versus its peers like King Digital or Zynga. Patience needed before shorting.

Upcoming Week Outlook

Monday – BoE MPC member Weale is out, may provide additional insights on potential rate cut or QE in August. German Bundesbank to release Monthly report, a nice piece providing hints on what risks they see.

Tuesday – RBA releasing Minutes that may shed additional light on what RBA thinks about current situation and possible further easing. UK CPI/PPI – will be watched by markets as BoE is readying for QE; GE ZEW Economic Sentiment for July will show us what temperature German economy has. From overseas we will get Building permits, Housing starts showing us what is the situation in housing market. Expecting June Housing starts at around 1.17 mln vs 1.16 in May. June permits show move to approx. 1.16 mln, higher than in May. Also expecting Home sales to decline to 5.48 mln in June.

​Wednesday – CN Leading index (m/m), UK labor market data will be out, where Claimant count should rise to 4.1k from -0.4k previously, Unemployment rate should stay unchanged at 5.0% and Earnings should rise. We should also learn what how consumers are confident in Europe (Brexit).

Thursday – JP – Industry activity, UK Retail Sales for June (expecting decline), ECB Meeting (live) but no rates change or additional QE expected. The rates should stay at -0.40% (Deposit), 0.00% (Main refinancing) and +0.25% (Marginal lending facility). Definitely closely watched by the market to get the clue on after Brexit vote actions from ECB, situation in EZ economy, QE bond buying and what’s next for Italian banks. Later will have Philly Fed Manufacturing index (expecting rise) and US Jobless claims to rise to 271k from previous week 254k. Later will have CB Leading Index (to return to positive territory).

Friday – will be about July Flash PMI data from all around the world, JP (to rise), FR & GE (both Manufacturing & Services slightly worse), EZ (both slightly worse), UK Manufacturing PMI (worse), US Flash Manufacturing PMI (better). Will also have CPI/Core CPI data and Retail sales from CA (both lower), making the BoC decision makers think whether the last week inaction was right.

The earnings will be monitored by market participants as equity markets are making new historic highs and if they are solid, we may have another shift higher. All those investors sitting on sidelines and hoarding cash before/after Brexit referendum are now moving to stocks. The bond yields started to rise again (risk on outflows) but the likelihood of Fed rate hike, especially due to stronger US data, may inevitable shake the confidence of stock investors. On the other hand, what other options than stocks (dividends) do you have in your hunt for yield?

Event Risk Calendar - Week 29

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 www.landoftrading.com Contact: landoftradingATgmail.com

Read More

Bank of England on Hold - Carney just hurt risk on... ( UPDATED )

Risk on - the bears just got a good reason to try to stop risk on rally, the question is whether it's going to be enough. Now, we have to keep in mind the Tier-A US data tomorrow and if they are strong that could bring FED hike discussion om the table again. Well, it could be another good opportunity for bears and we may see at least a pullback.

Waiting for US open today for any sign that bulls may be in trouble:
SP 500 FUT, AUD, JPY, CHF and CAD on the list.

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading       teams view on past and current economic and capital market environment. It is not and shouldn´t been viewed   as an investment advice and the creator of this material shouldn´t been hold liable for any loss resulting from       action where despite this disclaimer someone would consider this  material  as an investment advice. 

Read More