Short recap
Asian stocks took a breather
Europe opened mixed
FOMC Minutes showing cautiousness (not to forget that the meeting took place right after Trump inauguration that was accompanied with huge uncertainty)
But lots has happened since then
May rate hike priced at 50%
10-yr US Trys yield at 2.40% after FOMC
FR elections: Bayrou pulling out and expressing support for Macron
GE-FR spreads down by 10 bps as a reaction
Demand for Bunds (politically driven vs strong momentum in stocks from good macro data)…something fishy here
EURUSD – experienced short squeeze on the news but jump was more about hitting strong support around psychological 1.0500 level
AUDUSD – not sure about the direction
Reflation and commodity story to push higher
Rate spreads to weight on the cross
Nissan Motors – Carlos Ghosn to step down as CEO after 15 yrs with the company
Airbus looking at easing penalties from EU govs for delay in military aircraft contract
Tesla to start Model 3 production in Sep, reporting smaller loss
Bayer expecting agri products (pesticides) business flat this year
Focussing on Monsanto takeover completion (USD 66 bln)
More HFs warning about Trump stock rally being overdone
While EU political risks not priced in
UK Brexit – Australia and Israel to expand trade and investments
US Trs Sec Mnuchin making vague comments about effects of strong USD
UK and Canadian regulators to assist FinTech
Goldman Sachs expecting crude oil stocks to keep falling
OPEC is tightening but US shale production is rising on better effectiveness and cheap funding
Don’t really see the signs of improved demand
Commodities need more real demand & lower inventories to rally further
Most vulnerable are copper and longs in oil
Data
GE: Gfk Consumer Climate Index – out slightly higher
UK: CBI Distributive Trades Index as a leading indicator for retail spending should point slightly higher
US: Initial/Continuing weekly unemployment claims – expected marginally higher
US: Chicago Fed National Activity Index – expected slightly higher
US: FHFA House Price Index
US: Kansas City Fed Manufacturing Index
ECB Praet speaking (0855)
Atlanta Fed Lockhart speaking (1335) – likely to provide a recap of his 10 yrs at Fed as he retires soon
Dallas Fed Kaplan (voter) speaking (1800)
Good luck Champs!
Mr Hawk
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