May 9 , 2017 – Market Update

Mr Price Action/ May 9, 2017/ Earnings Season/ 0 comments

Short recap

 

Asia mixed

Europe opening higher but correcting

Kuroda sees 2% inflation in 2018

To keep the short term rate target at -0.1%

And 10-yr Japan bond yield at 0%

UK’s employers having hard times to recruit foreign workers

Fed’s Bullard having concern over weaker growth and inflation data in Q1

Alex Weber from UBS (former Bundesbank head):

Brexit negative for Europe, more volatility to come

ECB likely to remove some easing wording in June

And announce taper in Sep

 

Equities

 

Akzo Nobel rejected the PPG Industries take over bid again

UK’s energy supplier Centrica not very happy with warm weather and low commodity prices

As they bite into the margins

Home Capital suspended dividend, burnt 1.6 bln out of 2.0 bln of line of credit as deposit flee away

Industry veterans added to the Board

Suncor looking at new oil sands project in Alberta (Canada)

ISS pushing shareholders of PrivateBancorp to reject takeover offer from CIBC

 

Earnings

 

Commerzbank reported higher operating income, proof that raising rates benefit banks

 

Walt Disney expecting better results

Valeant investors more focussed on asset sales than earnings

 

Others reporting: Allergan, Duke Energy, Nvidia, Electronic Arts, SunPower,

 

VIX touching the 9.77 level, lowest level since 1993

Market sees very little risk in the near future

Will not last long, what is going to be the trigger?

 

Bonds

 

10-yr Trys yield at 2.39% with real yields at 2 month high of 0.51%

10-yr Bund yield at 0.42% – ECB’s June language adjustment and beginning of taper in Sep getting priced in

Yield likely to move to 0.50% attacking the recent highs

 

FR-GE spread stuck at 42 bps (after Macron victory), stabilized here

What is still above 20-30 bps historic levels but market is waiting for June Parliamentary elections

 

EURCHF, USDCHF – weaker CHF on higher yields

And money flows leaving safe heavens

To watch SNB sight deposits stats – to stabilize or fall?

 

USDJPY – on the way to 115.00 after clearing Ichimoku

Next resistance 113.76 (76.4% Fibo)

Risk on, US yields and tax reform progress crucial

 

Commodities

 

Oil very indecisive as OPEC/non-OPEC cut may extend to 2018

But slowing demand and rapidly rising production in US temper the cut impact

 

Gold playing within 1200/50 range

USD and US yields not helping

Options market back to neutral

Specs long cut, real money no change

 

Data

US: Small Business Optimism Index to slow a bit

US: JOLTS to slow a bit

Fed’s Kashkari (1300 GMT), George (1540 GMT), Rosengren (1700 GMT) and Kaplan (2015 GMT) speaking

 

G7 finance ministers meeting in Italy this week

Discussing: trade, financial institutions, fighting inequality and tax crime

 

Upcoming

Wed – ECB’s Draghi and Fed’s Rosengren, Kashkari speaking

Thu – Fed’s Dudley speaking

Fri – US CPI and Fed’s Evans speaking

 

May 25 – OPEC/Non-OPEC meeting

June 8 – UK elections

June 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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