Short recap
Asia in red
EU opening lower
Smaller companies in UK getting ready for Brexitas they keep cash and reduce investments
Peugeot-Opel deal may be announced in a couple of days
Henkel bidding for Darex Packaging (USD 1.05 bln)
Alcoa consolidating internally
FX brokers tempted by US market on upcoming financial deregulations
Snap up 41% first day on NYSE in most prominent tech IPO since Alibaba
May be reminding us 1999-2000 year with techs flying high, CBs supporting markets with cheap money
Kind of scenario when the last 1-2 years of bull market are very strong
US stocks valuation overstretched
But looking at Europe can be an option, especially if political risks are off the table
Gold consolidating, support at 1220
Silver dropped 4%, support at 17.38/17.73
US 10 yr Trys yield at 2.47%
Very busy day for Fed’s officials as they have last chance to tweak the market about March hike (now priced at 90%):
Evans, Lacker (1515 GMT)
Powell (1715 GMT)
Fischer (1730 GMT)
Yellen (1800 GMT)
If Fed hikes in March, the wording about potential acceleration of hikes will be crucial for the market
EUR – political risks in EZ vs better incoming data, risk of taper from ECB
USD – Trump stimulus policies, hikes
EURUSD – no change, overall market is positioned neutral in EUR
Res 1.0526 (61.8% Fibo)
Sup range 1.0500/20
Sup 1.0453-61
Sup 1.0340
Closing below 1.0460 important for big players as bears worked well the whole week. EUR may get stronger but against CHF, JPY, AUD…etc.
The risk are Fed speakers, if we do not manage to close below 1.0460/80 range (as something may be cooking around) the caution next week is warranted (ECB, US NFPs).
Reuters poll:
EURUSD at 1.0400 in 6m, 1.0300 in 12m
Trump not clear on USD
EURUSD options
Seen realized vols trading lower
1w Implied much higher at 9 than Realized at 4
1w expiry is covering Yellen tonight and US NFPs next Friday
RRs keep strongly favoring puts as we are sitting close to 2017 low of 1.0340
FR elections – despite recent opinion polls the expiries covering 2
nd round of vote on May 7 still trading at high end of volatility curve
Data
Fri:
EZ: Retail sales to print higher but trending lower
US: ISM Non-manufacturing activity index – expecting no change
US: NFPs only next week on Mar 10
Next Friday:
US: NFPs
Should you have any questions feel free to contact me anytime.
Good luck Champs!
Mr Hawk
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