Feb 20, 2017 - Market Update

Short recap

US markets closed on Monday on account of President’s Day (not to get confused with Trump, reference is to George Washington birthday)  :o)

CA markets closed as well on account of Family Day

DXY not reacting to Mar 15 hike increased likelihood (40%)

Fed likes to see the probability of rate hike above 75% to act

Will see whether Fed officials will be convincing enough to increase the probability before Mar 15

Kraft Heinz buying Unilever for USD 143 bln is off

US shale oil producers facing a rising costs (first time after couple of years)

Battle for German drug producer Stada keeps heating up with the latest Bain Capital acquisition proposal for USD 3.8 bln. The shares trading at new historic highs below EUR 58.

DAX likely to test 12 000 as strong underlying momentum continues

EURUSD – jumped from 1.0530 (61.8% Fibo) but range trading

Markets like to see the cross below 1.0700, pressured by political risks as well

1.0500/25 key for further testing below 1.0350

Lower Bund yields can be seen as risk off in EZ

10 yr Trys yields struggling to break 2.50% level, will see how market will react to hawkish comments from Fed officials

USDJPY – support around 112.50 + 23.6% Fibo + support in the form of descending trend line connecting high of Jan 3 & Jan 27

Then lows around 111.60

XAUUSD – still range bound 1220 (38.2% Fibo) and 1245/1250 (50% Fibo)

Data

UK: CBI Industrial Trends Survey – hard to say after Dec negative surprise but Brexit impact is more and more visible

EZ: Consumer Confidence Indicator – expected to stay steady but upcoming elections in EZ could weigh on sentiment

EZ FinMin meeting today, no resolution expected on Greece

Feb 28 – Trump before Congress, is he going to disappoint?

Putin supporting the EZ or EU collapse? Not really...

Putin is definitely not interested in collapse of EZ

36% of Russian foreign currency reserves are in EUR (USD 48%)

Russian businessmen invested heavily in EU

EU is the largest trading partner for Russia with exports worth of almost USD 100 bln to EZ, what equals to exports to the rest of the world

Foreign direct investments to Russia from EZ total 70% of all FDI flowing to Russia

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 15, 2017 - Market Update

Short recap

Asian markets up on Wall Street and Yellen

EU markets opening higher

SoftBank Group to buy Fortress Investment Group (USD 3.3 bln) as it is preparing to enter the private equity space

GM’s decision to put Opel/Vauxhall on sale is a turning point for the company as the company will exit the production in Europe

If talks with Peugeot-Citroen succeed the global auto map will be redesigned completely

CEOs of US retailers to discuss the border tax with Trump today

Studying Trump actions becoming a norm for professional investors (apart from fundamentals…etc.)

FinTech is venturing into M&A business of Goldman Sachs now after eliminating tons of trading jobs before

Momentum in financials seems to be firmly in place with Goldman Sachs reaching historic highs

But we may be getting a bit overstretched despite momentum

Trump’s New world is turning into New NATO and many European countries need to live up their 2% of GDP obligation

Thus seeing new opportunities on long side in: BAE, Leonardo, Lockheed, General Dynamics, Raytheon and Northrop

EZ peripheral yields falling down despite the ongoing clash between EZ and IMF over Greece

Greece not open to any further spending cuts; the situation may turn up badly at some point

Some US banks licensed to issue Panda bonds in China (inland)

USDJPY – levels 115.00 and 116.00 (cloud top)

EURUSD – 1.0566-1.0576/78

Yellen

Fed likely hiking on Mar 15 but need to watch job market and inflation expectations (probability at 34%)

3 hikes still in place for 2017 (prised at 50/50 for Dec); market is pricing 2 hikes

Waiting too long would be unwise

Trump policies are a big unknown/risk

Eventually, Fed can do pre-talk in March and hike on May meeting (despite no press conference)

Fed has an authority and responsibility to talk with global regulators

Data

UK: Labour Market Report – claimant count expected higher

US: Consumer Price Index – headline CPI to rise the most since 2012 while Core CPI expected slightly lower

US: Consumer Price Index – expected to slow down

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 14, 2017 - Market Update

Short recap

EU markets opening lower

Oil staying range bound on OPEC cut compliance vs non-OPEC production rising

The cut primarily by Saudis only

WTI very range bound 52-54/54.50

Negative bias on US shale oil production rise prevails in the market

Another blow to Trump after immigration ban legal issues as his security advisor Flynn was forced to resign on allegation of discussing lifting sanctions against Russia before Trump becoming officially a president

Trump not looking at major trade overhaul with Canada, likely just few adjustments here and there (marketing wise likely)

Lloyds Banking Group close to moving its EU operations to Berlin in order to keep access to single market

Apple at record highs on expectations of better sales figures from new iPhone (10^th anniversary) launch and customer demand

Closed at USD 133.29, what brings its market value toUSD 699.3 bln

All time high at USD 134.54 (Apr 2015)

Ivanka Trump branded production being dropped more and more

EURUSD below 21 DMA

Below rising medium term support line (now at 1.0620) connecting lows of Mar/Dec 2015

Through 38.2% Fibo

Next ones of interest are 1.0585 and 1.0530

Below just cycle low around 1.0340

Should we start to talk about parity on political risks in EU and yields divergence again?

Yellen definitely needs to confirm the Fed’s hawkishness

If she confirms 3 rate hikes this year, starting in June may be too late

Bear in mind that she might be geopolitical risk sensitive

US 10-yr Trys yield steady at 2.43%

10-yr Bunds yield steady at 0.33%

Data

GE: ZEW Economic Sentiment Index – to print slightly lower

US: Small Business Optimism Index – to print slightly lower after strong Dec

China PPI up to 6.9% y/y

Is it going to push EZ prices higher?

Fed can reach its 2% inflation target pretty soon as US imports cost more and rising prices for service are more evident.

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 13, 2017 - Market Update

Short recap

EU markets higher

Abe sure US will make major investments

Expanding free trade to be done in a fair manner

US will make currencies to fair level playing field but no specifics, USDJPY relief rally, later corrected

Risk of currency wars fading

The tax overhaul and incentive based policy part of next steps

On the other hand US lowering taxes and exporting more means stronger USD (unless they do something about it)

Likely Trump backed off from Taiwan issue (One China policy) for the benefit of Senkaku islands (China backing off from Japan control islands)

Likely something regarding North Korea as well

Trump administration will have a chance to fill three vacancies at Fed, thus can make a print on monetary policy after recent announcement of top official responsible for bank regulation resignation

North Korea biting again with medium- to long-range missile test

Canada Pension Plan (one of the biggest infrastructure investors globally) awaiting Trump’s plans but still too soon to see opportunities

Iron ore futures up 5.6% breaking important resistance

Oil – higher inventories may lead to additional OPEC production cuts

6 month period is too short for rebalancing the oil market despite high compliance with cuts

Some US financials may not be able to service the EU markets if Trump repeals globally imposed financial regulations

Sanofi to sell some OTC products to Ipsen

Stada becoming an acquisition target after receiving two offers

GE-FR and GE-NL spreads rising ahead of elections in NL (March) and FR (April/May)

Data

US: Treasury Inflation Forecast – expectations to edge higher

Yellen testimony (Tuesday/Wednesday):

For markets it is enough if she supports the view of Fed moving without looking too much at Trump

No need for a date and USD can find further support

Comments on balance sheet can be of interest

Gold – 1220/1245/1250 levels

To watch USD, yields, Trump tax plans

Specs keep increasing longs

AUDUSD – an inflation play

Next 0.7700, then 0.7750

To loose momentum needs to break below 0.7600

Specs longs in USD reduced further but still long USD 17 bln

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 10, 2017 - Market Update

Trump honoured one China policy during the phone call with Chinese president

EZ bond yields rising – on Le Pen only, really? May be the market is expecting QE taper at some point but what about traders just overlooking the underlying issues not being fixed across EZ?

Also the Trump support of corporate America may not be the best for EZ companies and that combined with political risks in Europe doesn’t help DAX to follow the gains in US indices that closely.

Greek 2-yr yield was sharply up to 10% while the rest of pheriphey contracting and now falling on hopes of successful bailout outcome. EcoFin meeting on Feb 20 to discuss Greek bailout.

Data

US: U. Michigan Consumer Sentiment (Feb) to print slightly lower

Abe-Trump meeting today, press conference at 1800 GMT

But they will be playing golf over the weekend, so we can still have more headlines coming

...one of the many opinions circulating around:

ECB to unleash a 'perfect storm' for EUR shorts - Credit Agricole  link

In April, the ECB will cut the pace of its monthly purchases from EUR 80bn to EUR 60bn.

This, coupled with growing purchases of shortdated bonds, trading below the deposit rate floor, should compound the risks for EUR ahead of the election season in the Eurozone.

The combination of reduced bond purchases and reallocation of some of these purchases towards the short-end of the curve will have a negative impact on EUR.

EURUSD – pivot 1.0641, 1.0620 than 1.0570 and 1.0500

Gold – support 1220

S&P 500 – above 2300 where sky is the limit...

USDJPY – depending on US yields and upcoming Abe-Trump meeting; levels to watch: 114.00, 114.40/50 and 115.40 or top of the cloud around 116.00.

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 8, 2017 - Market Update

Short recap

Asian markets lower on uncertainity about Trump pro-growth policies

CN – property stocks enjoyed rally as may not face such headwinds as expected before

EU markets mixed after positive start

US 10-yr bond yield below 55 DMA what may be seen bit dovish in the short term; correcting to 2.10/15% levels? Currently at 2.40%

Bund 10-yr bond yield at 0.35%

French presidential campaign is full of typical local issues, pressuring EUR

Volkswagen US to invest USD 2 bln in green infrastructure in US (part of the emission settlement)

S&P 500 aiming for 2300, if broken no further resistance soon in sight

DAX 11 400/450 support range making some question marks

2017 allocation of stocks based on valuations while taking into account political risks in EZ: 50% EU stocks ex-UK and 50% JP stocks

Oil – API inventories skyrocketed to 14.4 mln barrels of stock (2nd highest on record)

Today’s EIA report to be watched, market is expecting a rise of 2.5 mln

Gold in demand on EZ and US; support at 1220 but needs to overcome 1236 (triple top) on the way to 1250 (50 Fibo)

CNY-CNH spread narrowing

Abe-Trump meeting this weekend – downside risk for USDJPY

Decision about 2nd Scottish referendum in two weeks (speculation)

FOMC March hike at 25%

Yellen may surprise on hawkish side in Semi-annual testimony next Wednesday as market has very low expectations

JP capital flow data to be checked tonight as Japanesse are not only selling US Trys but have also huge holdings in EU bonds

Selling of US Trys from both JP and CN side supporting USD

USD – looking firm broadly

Commodity currencies – USD and weaker oil prospects putting pressure on

EURUSD

Is trend changing? Broke out of uptrend channel on 4-hour chart.

1.0620 – rising support trendline

1.0600 – 55 DMA

1.0525/00 – 61.8% Fibo

Formation of reverse H+S formation (1.0515)

Peripheral spreads still at elevated levels; Greece and France making headlines

Small spillover to equity markets but nothing serious yet; the red alert would be further significant rise in 2-/3-yr Portugees bond yields

Belgium issued 40-yr bonds yesterday

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 3, 2017 - Market Update + US NFPs view

Short recap

China is back from holidays

POBC raised short term rates to reduce leverage and help CNY

JP stocks found support in BoJ buying bonds, thus weakening JPY

After 10-yr JP bonds yields touched 0.115%, the BoJ was active in buying 5-10yr bonds and targets 0% yield for 10-yr bonds

EU stocks started mixed waiting for NFPs clues

To watch DAX 11 500 and S&P 2245 levels on the downside

ChemChina close to getting antitrust approval from EU to acquire Syngenta for USD 43 bln

Bundesbank Chief Economist said there is no reason to reduce monetary stimulus

As the core inflation is still below target

Praet (ECB) – no sustained adjustment toward 2% inflation

Continued monetary stimulus necessary

Underlying inflation dynamics to remain subdue

Saw rebound in Italian bonds

Core bonds higher, yields lower after ECB rhetoric on QE

USDRUB was a big mover yesterday as US Treasury is looking to easy sanctions in the light of Trump wishing better relations with Russia

DXY steady as 10-yr US Trys yields float around 2.48%

Gold didn’t manage to hold gains above 1220; USD and rates the key

Needs a weekly close above to keep the momentum

Data

EZ: Markit PMI (Jan)

EZ: Retail Sales (Dec)

US: Charles Evans (Fed) speaking (1415 GMT)

US: Markit PMI (Jan)

US: Factory orders (Dec)

US: ISM Non-manufacturing

US NFPs

All in all after better ADP figures that are more or less in line with NFPs (statistically over the last year) expecting better numbers

Especially the hourly earnings will be closely watched as it will have direct inflation implications

Much better numbers may mean that Fed is late with its actions

Headline: exp. +210k vs 175k market expectation vs 156k previous

Participation rate: exp. 62.9% vs 62.7% previous

Average hourly earnings: exp. +0.2% or higher vs +0.3% market expectation vs +0.4% preious

Unemployment rate: exp. 4.7% vs 4.7% market expectation vs 4.7% previous

EURUSD – bearish signal?

Didn’t hold above 100 DMA at 1.0788

Didn’t break through 50% Fibo at 1.0820

DXY

Stayed above 100 DMA at 99.59

And above 61.8% Fibo at 99.26

GBP

For those who like to trade volatily after trigerring Art. 50

In the short term may look at selling GBP against EU currencies

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 2, 2017 - Market Update

Short recap

Asian markets inched higher

EU markets to open lower

After sharp rise in stocks of crude oil the price are higher today what is on the back of OPEC and other producers cutting production

Japan's pension megafund GPIF to invest in US infrastructure (for example: high speed rail projects in Texas and California...etc.)

Facebook surprised the market when proved contrary to recent mobile ads speculations

UniCredit going for EUR 13 bln rights issue priced at 38% discount to market price after declaring the EUR 11.8 bln loss for 2016

The fresh capital is crucial to comply with ECB capital requirements

Deutsche Bank Q4 earnings impacted by lower client trading activity, reporting loss of EUR 1.6 bln vs EUR 7.3 bln in 2015

Tier 1 ratio higher to 11.9% from 11.1% but still should be able to rise additional capital if needed

Bonds spreads of IT, ES, PT and FR widen on higher inflation epxectations and scaling back of positions peripheral bonds

FOMC

Statement was very neutral as expected and some may found a bit of hawkishness in it

But more cautious then bond markets expected, not to forget last hike was just 6 weeks ago

Markets pricing March hike at 30% down from 35%

Looking at 2 hikes this year on improving data

FX

Had a tepid market reaction as there are no indications of moving to new levels

Market watching US yields, ATM vols if moving higher and whether the RR favoring USD puts

USDJPY – sitting on 112.50 support line

Saw some buying of 112 and 111.50 strikes

Data

EZ: ECB Economic Bulletin – will be scrutinized by market as we saw a jump in headline inflation and better growth figures

EZ: Mario Draghi's speaking at 1215 GMT – any hints on inflation and growth?

UK: BoE Inflation Report – what about reaction to rising prices?

US: Job Cut Report – will be watched ahead of Friday’s NFPs and after strong ADP report; expecting lower figure

EZ: As the prices are moving up ECB should act but...the energy is the bigger component driving the inflation:

Core 0.9%

Headline 1.8%

Energy 8.2%

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 31, 2017 - Market Update

Short recap

Asian markets lower on Trump immigration restrictions
Trump – just protectionism but no real economic policies yet – market not taking it well
EU markets mixed
BoJ – no policy change,  looking at steady economic recovery to push prices higher to 2% level without additional stimulus
Brexit parliamentary debate starting today, the Brexit bill should be passed despite some lawmakers being pro-EU

CEOs of Goldman Sachs and Ford criticized Trump’s immigration policies
Deutsche Bank to pay USD 425 mln and GBP 163 mln over money laundering activities of wealthy Russians
UniCredit declaring EUR 11.8 bln loss for 2016, looking at EUR 13 bln rights issue; declaring such a loss means not complying ECB capital requirements
US equities remaining attractive despite Trump’s policy; sector wise financials, energy, techs and as soon as we have more clarity, health care

EURUSD – markets seem to be short gamma
Risk reversals to favor EUR puts
Current market positioning can turn out to rapid moves if stop-outs are triggered

USDJPY – 112.50 support
If broken can see more gamma buying, short dated strikes 112-111.50
JPY and Nikkei 225 still the most sensitive to uncertainty

EURCHF/USDCHF – moving lower on risk off
But overall there is still no clear indication in interbank market what traders are buying

Gold - Trump helping a lot
1205 resistance, if broken, more buying may follow and eventually reaching 2017 highs around 1219 level (38.2% Fibo)

Oil – US production offsetting the OPEC cuts, thus pushing oil lower
Support USD 50.70 (WTI) and USD 53.50 (Brent)

Data
EZ – Inflation set to print new highs (+1.4% exp)
EZ – GDP to stay steady
EZ – Unemployment expecting no change
US – Consumer Confidence Index expecting a slide
US – FOMC starting two day meeting today

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 30, 2017 - Market Update

Short recap

Asian stocks and US futures lower on Trump’s immigration restrictions

EU markets to open lower

Allianz eyeing Australia’s QBE Insurance as a takeover target

Italy – issuing new bonds (EUR 9 bln) today, watch for spreads with Bunds to widen or not

US economy slowed as we saw wider trade gap due to a drop in soybean exports but steady consumer spending and rise in business investments to support the outlook

Gold had poor performance despite weaker USD

Equities moving higher but more noise to come in the short term

VIX printing new five year lows creating divergence between equities and other asset classes

Commitments of Traders (COT) as of Jan 24:

EUR – net short positions down to 4-month low on USD selling

Bonds – funds going long for a second week, while being short stocks – are they getting ready for a risk off market correction?

WTI – new record longs

Commodities in general – new longs, highest since 2014

  

Data

Trump euphoria fading from the market this week as we have busy data calendar US/Non US

Eurozone Business Climate Indicator (Dec) to reach new highs

US consumer spending growth (Dec) to accelarateprojected to accelerate

US Home Sales (Dec) to suffer from higher prices and low inventories Wednesday FOMCFriday US NFPsGood 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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