Aug 4, 2017 – Market Update (NFPs 183k/Earnings 0.3% expected, US yields reaction to NFPs crucial for USD, USDJPY, Gold, EURUSD above 1.1876 but below 1.1900, Siemens to build wind power plant in Turkey, Goldman Sachs buying USD 10 bln of Aramco’s credit facility, Tesla – market betting heavily on Model 3 success, Trump productivity stats)

Mr Price Action/ August 4, 2017/ Market Update, Market Update Posts/ 0 comments

 

Short recap

 

Asian slightly higher

Europe opening lower

Russian case moving with subpoenas issued for Trump’s son and his son-in-law

A new India-China stand off in Himalaya?

Toronto home sales down 40% y/y, 4th month of decline

Average purchase price is CAD 746k vs CAD 920k in April

Trump should speak on actions against China but the speech may be cancelled

Trump – productivity stats: In the office for 6 months, played golf for 40 days, Congress has passed 0 pieces of major legislation

 

Equities

 

Toyota and Mazda entering joint venture building of plant in US (USD 1.6 bln)

Siemens to build wind power plant in Turkey (USD 1 bln)

Seems like money talks and not NATO issues or politics in this case

Tesla up as market is betting on Model 3 success

Enbridge having some troubles with Line 3, rising costs

Goldman Sachs bought part of Aramco’s credit facility (USD 10 bln)

In a push to secure the role in Aramco’s upcoming IPO

Amazon.com spending big time in Hollywood (USD 4.5 bln)

But the profitability of such activities is still questionable

EU is targeting Visa over the fees it charges merchants for payments made by non-EU customers within the EU

RBS moving the trading desk to Amsterdam from London

 

Bonds

 

10-yr Trys yield at 2.23% – down after BoE took no action and downgraded inflation and economic forecast

Reaction to NFPs will be very closely watched

10-yr Bund yield at 0.45%

 

DXY

 

According to BAML USD is not that weak as it may seem

Still 10% overvalued vs its long-term equilibrium

And 12% above its 20-year average in real effective terms

Only tax reform and better US data to help dollar

For the time being they respect market momentum until contrarian signs

 

Strong support zone (92.64 and 91.88) holding, weekly close crucial for further direction

Levels correspond with 1.2000 level in EURUSD

Combined with 200 WMA at 92.37 helped to support USD over the last 2 years

 

EURUSD

 

Trading steady going to NFPs

Moved above 1.1876 (low from June 2010) but stayed below 1.1900

Does it mean a correction coming?

Breaking the 1.1900 is important for bullish momentum to continue

Further resistance of 1.1200 more psychological of nature

Support 1.1768 (10 DMA), bullish bias to stay unless 10 DMA is broken

1.1786 (200 WMA) – a weekly close above?

Expiring options EUR 1 bln at 1.1850 strike

 

USDJPY

 

As weak ISM Non-manufacturing keeps pressure on USD

NFPs will be crucial for further USDJPY direction

But all will depend on US 10-yr yield reaction to payrolls anyway

Upside limited on weak USD, low US yields

Resistance 110.14 (76.4% Fibo), then 110.97 (61.8% Fibo)

Rising trendline acts as a support

Bids sitting at 109.85

Expiring options USD 1 bln at 109.45-50

 

Gold

 

Getting support from weak USD

But saw some position squaring yesterday going to NFPs today

Global demand is down 14% in H1 as the ETFs demand declined substantially

Resistance at 1274 (76.4% Fibo)

Support at 1261 (61.8% Fibo)

Ascending/descending trendline can also be of note

But US yields and USD direction crucial for further moves

 

Data/events

 

US NFPs – 183k exp vs 222k previously

Unemployment rate at 4.3% exp vs 4.4% previously

Average earnings at 0.3% exp vs 0.2% previously

Weekly jobless claims steadily falling down, thus pointing to tightening job market in US

More and more industries facing shortage of qualified labor

 

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

 

 

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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