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Macro

European Market Outlook: Safe Assets Retreat In Asia; Oil Keeps Gains


Morning Briefing March 30th 2017


Its a full data schedule Thursday, with a string of European a dn US data, along with a host of central bank appearances.

The European calendar gets underway at 0600GMT, when ECB Executive Board member Yves Mersch speaks at the "2017 Harvard Law Europe - US Symposium on International Financial Systems", in Frankfurt.

At 0700GMT, Spanish March preliminary HICP will be published. German state CPI data will also be released, staring with the Saxony data at 0700GMT.

At the same time, the Swiss KOF Economic Barometer will cross the wires.

ECB Gov. Council member Erkii Liikanen delivers a press briefing on the monetary policy and global economy, in Helsinki, starting at 0800GMT. The German VDMA machine orders data will be released at the same time.

At 0900GMT, the European Commission will publish the Economic Sentiment Indicator, alongside the Business Climate Indicator and the Consumer Confidence/Industrial Sentiment surveys.

The main German flash March HICP will be released at 1200GMT.

Across the Atlantic, the US calendar will get underway at 1230GMT, with the publication of the 3rd read of Q4 GDP and the latest jobless claims.

At the same time, the Canadian Industrial Product and Raw Material Price Index.

Cleveland Federal Reserve Bank President Loretta Mester speaks on payment system improvement at the Annual Risk Conference co-hosted by the Federal Reserve Bank of Chicago and DePaul University's Center for Financial Services in Chicago, starting at 1345GMT.

Dallas Federal Reserve Bank President Dennis Kaplan participates in a moderated discussion at the U.S. Chamber of Commerce's Capital Markets, while San Francisco Federal Reserve Bank President John Williams gives remarks at the launch and learning community event for Strong, Prosperous and Resilient Communities Challenge in New York, N.Y. No discussion of monetary policy expected, both expected at 1515GMT.

New York Federal Reserve Bank President William Dudley speaks on "The Importance of Financial Conditions in the Conduct of Monetary  Policy" at the University of South Florida Sarasota-Manatee in Sarasota, Fla., with audience Q&A, starting at 2030GMT.

Late US data sees the US Fed weekly M2 Money Supply Data will be released.

 

Global Economic Trading Calendar


 

Markets


SNAPSHOT: Below gives key levels of markets in the second half of the Asia-Pac session:

- Nikkei 225 down 72 points at 19,144.64

- ASX 200 up 20 points at 5,894.70

- Shanghai Comp. down 22 points at 3,219.37

- JGB 10-Year future down 11 ticks at 150.33

- JGB 10-Year yield up 1.1bp at 0.066%

- Aussie 3-Yr future up 3 ticks at 98.07, 3-Year yield down 0.3bp at 1.891%

- Aussie 10-Yr future up 4 ticks at 97.095, 10-Year yield down 3.5bp at 2.687%

- US 10-Year future down 1+ ticks at 124.17.

US TSY/RECAP: US Treasuries ended Wed higher after solid $28B 7Y sale, mixed $13B 2Y FRN reopening. Tsys pushed up, supported by Reuters ECB sources story saying ECB wary of changing message again for fear of increasing EGB yields so will give bland message at end-April, along with some caution as the UK enacted Article 50 for Brexit. Tsys aided by month-end buying. Boston Fed's Rosengren said US is at point where 4 rate hikes easily justified. Fed's Williams weighed in he could see 3-4 hikes this year. US 10-Year yield unchanged in Asia at 2.378%, T-Note future unchanged at 124.18+.

AUSSIE BONDS: Aussie bonds are higher on the day, flat from the SFE open after tracking EGB's higher during the SYCOM session. The move higher in EGB's came after a dovish ECB sources piece that said the market had "over-interpreted" the
message from the March ECB  meeting, the ECB simply wanted to communicate reduced tail risks and not hint towards an exit. The report stated that the current easy monetary policy stance "is far from ending". US treasuries also moved higher, Aussie yields lower across the board, some bull flattening seen up to the 15-Year sector, 2-/15-Year spread 3.2bp narrower.

JGBS: JGB's have moved lower in Asia-Pac trade, after a fairly sanguine session during Europe and US hours compared to moves in global bonds. JGB futures gained 3 ticks to 150.48 in Europe/US, then dropped sharply at the Asia-Pac open as participants shrugged off trepidation from the UK enacting Article 50, and a dovish ECB sources story. Decline comes even as  Japanese stocks languish in negative territory, but is tracking the move in US T-Notes2-year yield last up 2.6bp at -0.224%, 40-Year yield last up 1.2bp at 1.028%, seeing increased buying by insurance funds at these yield levels. JGB futures last 150.37, recovering from lows at 150.33 on some dip buying. Down 8 ticks on the day.

FOREX: It was a somewhat restrained session for the Asia-Pacific region, with little in the way of economic data to inspire trading, the dollar was mostly unmoved against its peers. Dollar-yen opened at Y111.04 and traded higher from Y110.99 to Y111.43. The move was supported by Tokyo-fix related demand and a slight uptick in US Treasury yields. Dollar-yen was last at 111.28. Aussie moved between $0.7655 to $0.7676, early cross flow demand was negated by slightly firmer UST yields, leaving the Aussie unaltered from today's open. Meanwhile, euro-dollar currently trades at $1.0751 and Cable at $1.2445 after trading in respective ranges of $1.0742 to $1.0770 and $1.2432 to $1.2451.

GOLD: Gold retreated in Asia-Pac trade, dropping from a 1-month high. The yellow metal trades at 1,249.91, down $3.53. If the drop continues in European/US hours, this will be the second decline in three days. The DXY is back above 100, last at 100.06 and up 0.052 on the session, which is causing enthusiasm for gold to wane. Analysts have  attributed the rise in DXY to the UK enacting Article 50 yesterday, which makes EUR and GBP less attractive. A raft of hawkish Fedspeak yesterday has also put downward pressure on gold and was supportive of DXY.

OIL: WTI is essentially flat in Asia-Pac trade, last trade at $49.49, down $0.02 - WTI saw gains of $1.20 during US hours on Wednesday after US inventory data showed a larger drop than expected in gasoline inventories and refineries boosted the amount processed by the most in 34 months - indicating increased demand. This, combined with the boost from the news that Libya's Sharara 560k BPD field is offline, helped outweigh yet another rise in headline US crude stocks. It should be noted that headline US crude stocks rose less than expected. Cargo tracking data from Kpler SAS overnight predicted that OPEC.

 

Technical Analysis


BUND: (M17) Immediate Focus On 161.60-78

*RES 4: 162.48 Low Feb 22 now resistance
*RES 3: 162.16 21-WMA
*RES 2: 161.78 High Mar 3, Bollinger band top
*RES 1: 161.60 High Mar 2

*PREVIOUS CLOSE: 161.19

*SUP 1: 160.95 Hourly support Mar 29
*SUP 2: 160.71 High Mar 28 now support
*SUP 3: 160.13 100-DMA
*SUP 4: 160.04 Hourly support Mar 24    

*COMMENTARY: Bears failed to take out the 100-DMA with recent support around this level providing the base for a break higher and immediate focus now on 161.60-78 where the Bollinger top is noted. Layers of support have followed the contract higher with bears now needing a close below 160.71 to ease bullish pressure and shift focus back to the 100-DMA. Overall bears need a close below 159.73 to regain the upper hand and target 2017 lows.

 

EUROSTOXX50: Bulls Focused On 3524.04

*RES 4: 3554.44 High Aug 18 2015
*RES 3: 3546.41 Weekly Bollinger band top
*RES 2: 3524.04 Monthly High Nov 30 2015
*RES 1: 3484.02 2017 High Mar 29

*PREVIOUS CLOSE: 3475.27

*SUP 1: 3463.96 Hourly support Mar 29
*SUP 2: 3452.26 High Mar 23
*SUP 3: 3437.67 Low Mar 28
*SUP 4: 3420.99 21-DMA

*COMMENTARY: Bears remain unable to capitalize on dips with the index bouncing from ahead of the 21-DMA and layers of support Monday. Fresh 2017 and 16mth highs confirm current bullish focus on tests of the 3524.04 Nov 2015 monthly high. The Bollinger top is the key concern for bulls with potential to limit follow through. Layers of support are accumulating with bears now needing a close below 3452.26 to ease bullish pressure.

 

Eurex Futures Market Close


 

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This article is from Eurex Exchange and is being posted with Eurex Exchange’s permission. The views expressed in this article are solely those of the author and/or Eurex Exchange and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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Technical Analysis

GBPAUD Remains Above Weekly Chart Downchannel Resistance Post-Article 5


After 2 days of downward pressure and now that Article 50's out of the way, the GBPAUD is trying to find a short-term bottom.  With the daily MACD histogram still falling, the GBPAUD may still see a bit of weakness today, with any further slide likely halting around the 61.8% Fib retrace of last week's rally.  Significantly, despite the potential pressure lower today, the GBPAUD last week broke above downchannel resistance (on the weekly chart), and should continue attracting longer term bulls on notable pullbacks.  Nevertheless, most bulls will want to wait for the 4hr MACD histogram to begin perking up again before jumping in with fresh longs.  I am long intraday from today's Asia morning at 1.6234 with an upside target in the red zone (of the daily chart) by Friday.

 

GBPAUD Weekly/Daily/4hr/Hourly

 

Click here for today's technical analysis on USDCHF, Arabica Coffee

 

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This article is from Tradable Patterns and is being posted with Tradable Patterns’ permission. The views expressed in this article are solely those of the author and/or Tradable Patterns and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 

 

 

 


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Securities Lending

SLB Update: ETF Largest Short Value Per Sector


These were the 15 ETFs with largest short value on 3/23/17.
 


 

The analysis in this article is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 

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Securities Lending

SLB Update: Largest Short Value per Sector


The following table shows the securities with the largest short value per sector on 3/27/2017.

 

 
The analysis in this article is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

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Macro

Positioning aggressively on China - looking beyond the macro story


Welcome to this Real Vision TV interview taster. Pierre Hoebrechts has been running Asia dedicated funds from Hong Kong since 2011 and his local perspective on China, as a fund manager with Arowana Asset Management, is exceptionally insightful. He highlights the tremendous dispersion in the market, which can't be viewed from a macro standpoint, Pierre sees a favorable risk adjusted return profile and is positioned aggressively, highlighting the Chinese government's impressive track record restructuring its industries. Watch the full interview on Real Vision TV now.

Real Vision TV is the world's first video on demand platform for finance and investing. It features in-depth, short-form and long-form interviews, presentations and documentaries with the world’s best investors, independent analysts, economists, geo-political strategists and policy makers. It now has paying subscribers in over 100 countries around the world. Our customers include some of the world’s most famous money managers along with students, RIA's, investment professionals, financial service professionals and home investors.

This video is from Real Vision TV and is being posted with Real Vision TV’s permission. The views expressed in this video are solely those of the author and/or Real Vision TV  and IB is not endorsing or recommending any investment or trading discussed in the video. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


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