IB Traders Insight


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Macro

GUOSEN Closing Bell (June. 27)


MARKET

Chinese stocks closed higher today, with the benchmark Shanghai Composite Index ended at 2895.7 points. The A share market advanced towards 2900 points amid expectation of monetary stimuli, IPOs slowed as CSRC investigated frauds. Military and computer sector led the gains; none sectors fell. Combined turnover for both markets was 583.0 bn yuan, down 9.8% dod.

 

CLOSE

%CHG

VOL (bn yuan)

%YTD

SH Composite

2895.7

1.45

189.9

-18.18

SZ Component

10377.57

2.27

393.1

-18.06

CSI300

3120.54

1.41

104.1

-16.36

ChiNext

2191.81

3.03

138.5

-19.24

 

Sector

Top 1

Led by

Top 2

Led by

Upward-leading

Military

002155

Computer

 

Downward-leading

 

 

 

 

 

NEWS

*China's central bank on Monday pumped 100 billion yuan ($15.12 billion) into the market to provide liquidity. The People's Bank of China (PBOC) put 270 billion yuan into seven-day reverse repos, a process by which central banks purchase securities from banks with an agreement to sell them back in the future. The reverse repo was priced to yield 2.25 percent, according to a PBOC statement. Reverse repos worth 170 billion yuan mature on Monday, so the central bank has effectively injected 100 billion yuan into the market. (Xinhua)

*Shares of China Vanke Co Ltd, the country's biggest residential developer, plunged in Hong Kong on Monday, over a report that two major shareholders of Vanke have asked for an extraordinary general meeting (EGM) to seek approval to remove founder and chairman Wang Shi and 11 other directors from the board. Vanke stocks fell nearly 5 percent during intraday trading, and it managed to bounce back slightly and closed at HK$ 16.04 ($2.07) for midday closing, down by 3.95 percent. On June 24, the company received a notice from Shenzhen Jushenghua Co Ltd, and Foresea Life Insurance Co Ltd, units of Vanke's current largest shareholder Baoneng Group. The two investors together hold 24.29 percent of Vanke's total issued share capital. (China Daily)

 FUND FLOW

Click here for more information about Guosen.

This article is from Guosen Securities Co., Ltd. and is being posted with Guosen Securities Co., Ltd.’s permission. The views expressed in this article are solely those of the author and/or Guosen Securities Co., Ltd. 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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Macro

European Market Outlook


Morning Briefing June 27th 2016


There is only a limited calendar in the UK Monday, but the focus will undoubtedly remain on the UK, where the fallout from the EU referendum dominates everything.

Domestic politics will remain to the fore, as there is little change of the UK even starting to position themselves for Brexit until there is a new Conservative leader in place.

The European calendar gets underway at 0800GMT, when the only Continental data for the day is due as the ECB publishes the EMU M3 data.

The US calendar kicks off at 1230GMT, with the release of the May advance goods trade.

Back on the Continent, the ECB will call for bids on the latest 7-day MRO at 1340GMT, before publishing the latest PSPP bond-buying data at 1350GMT.

At 1345GMT, Markit will publish the flash US June services PMI. The Dallas Fed June manufacturing survey will be published at 1430GMT.

At 1730GMT, ECB President Mario Draghi will give the welcome speech at the ECB Forum on Central Banking, in Sintra, Portugal.
 

Global Economic Trading Calendar


Markets


FOREX: It's been yet another jittery morning for markets as a new week kicks off following last Friday's shock UK vote to leave the EU, and not surprisingly, both sterling and the euro have been trading heavy through the Asia-Pacific morning. Elsewhere, it's been mainly risk-off for other major FX pairs, but ranges have been limited. Cable held a $1.3356 to $1.3566 range this morning and last trades just off the low at $1.3392. It fell to a session low of $1.3229 last Friday following the Brexit vote. Euro-dollar traded a $1.0984 to $1.1078 range this morning and was last at $1.1016. Dollar-yen held a Y101.51 to Y102.48 range today and was last at Y101.89. Aussie-dollar was last at $0.7415 after a $0.7386 to $0.7459 range today.

US STOCKS CLOSE: With the Nikkei 225 closing down 7.92% and the German DAX down 6.82%, it was expected that US stocks would come under downward pressure also, but not to the same degree given that the market has been underweight US equities relative to other markets. The DJIA closed down 611 pts or 3.39% at 17,399.86, the Nasdaq Composite closed down 202 pts or 4.12% at 4,707.979 and the S&P 500 closed down 76 pts or 3.60% at 2,037.30. This is the lowest S&P 500 close since March 24 (2,035.94 close) and does not bode well for the upside. Market players will be focused on whether the index can continue to close above its 200-day moving average, currently at 2,020.80. The S&P 500 has traded above the 200-day since mid March

US TSYS: US Treasuries just coming back from the highs after an earlier pop when the PBOC set the yuan fix much weaker, to 6.6375 from 6.5776 Friday after a much stronger USD post-Brexit. 10yr yield sits at 1.4851%, just off the lows in yield for Monday. The Friday low was just on 1.40%. 10yr futures have traded on heavy volume, cracking 100k already today.

US INDEX FUTURES: E-mini S&P futures have traded solid volume so far this morning, over 150k although the movement hasn't been massive as it languishes just above the Friday low. That low was set when the 5% down circuit breaker was triggered, but today's nadir was just 2001.50. It currently sits at 2007.50, -11.00 or -0.5%.

AUSSIE BONDS: US Treasuries just poking through the Monday session highs and bringing aussie bonds with them, the Aus/US 10yr spread fairly stable in the mid-50s. However, selling continues across the Interbanks with the insurance bid giving way to a more calculated expectation of what the UK vote means for the RBA. Given the aussie dollar dropped from above $0.76 to under $0.74 here, the RBA would be much happier than if the "remain" vote won and the currency was in the $0.78-80 danger zone, in a more direct effect rather than an unknown global economic weakness effect. that's also seeing front month weakness in bills vs. the rest of the curve, with the front fly now -5/-3 on the crosses.

JGBS: JGB futures opening slightly higher in line with US Treasury futures with USD/JPY flat on the day so far. Futures stopped however by the overnight high of 152.61 with the day session high at 152.60. Currently at 152.58, -10 from the settlement. No domestic data on the calendar today with May Retail Sales on Wednesday the first economic release of the week.

US EURODLR FUTURES: US Eurodollar futures trading slightly higher than the Friday close with solid interest to sell the spreads. Volume stacked mainly at the front as expected, but interest to sell the Dec'16/Dec'17 (into 16.5 vs. a 20.0 settlement) and Dec'17/Dec'18 spreads today (into 20.5 from a 22.0 settlement).

OIL: WTI crude oil futures for Aug'16 delivery last down $0.22 at $47.42 per barrel, after a $46.92 to $47.82 range in Asia today, on solid volume as the after-effects of the UK referendum continue to be felt. After an almost 5% fall Friday, futures are again on the back foot but the Friday lows held and a slight recovery ensued. Eventually the supply picture will again dominate the day to
day price level, given the demand shock from the UK vote has yet to be seen. Support expected around the Friday lows at $46.70 then $45, resistance at $50 and above.

Technical Analysis


BUND: (U16) Weekly Bull Channel Top Caps

*RES 4: 171.29 Weekly Bull channel top 2
*RES 3: 168.91 Weekly Bull channel top 1
*RES 2: 168.86 2016 & Record High June 24
*RES 1: 166.98 Hourly resistance June 24

*PREVIOUS CLOSE: 165.68

*SUP 1: 165.29 High June 17 now support
*SUP 2: 164.72 High June 20 now support
*SUP 3: 163.52 Low June 23
*SUP 4: 163.06 100-DMA    

*COMMENTARY: The move Friday remained capped around the first weekly bull channel top with bears taking some comfort in the lack of follow through on the day. Layers of support remain with bears now needing a close below 164.72 to shift focus back to the 161.74-163.06 region where 55 & 100-DMAs are noted. While 164.72 supports bulls remain focused on tests of the weekly bull channel tops.
 

EUROSTOXX: Firm Focus Returns To 2016 Low

*RES 4: 3057.71 High June 23
*RES 3: 2933.33 Low June 21 now resistance
*RES 2: 2893.63 Alternating daily support/resistance
*RES 1: 2839.06 Hourly resistance June 24

*PREVIOUS CLOSE: 2776.09

*SUP 1: 2764.71 Bollinger band base
*SUP 2: 2736.43 Low June 24
*SUP 3: 2672.73 2016 Low Feb 11
*SUP 4: 2645.44 Low July 17 2013

*COMMENTARY: The index stalled around the daily bear channel top (3057.73) Thursday only to be sold off sharply for a relatively bearish close Friday. The Bollinger base (2764.21) is the key concern for bears who are firmly focused on a retest of 2016 lows. Initial resistance is noted at 2839.06 but bulls need a close above 2893.63 to shift focus higher. Daily studies are well placed for further losses.
 

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

VIX (VX) Bounces from 2016 Low to High on Brexit


The VIX smashed through downchannel resistance (on the weekly chart) Friday on Brexit, and is now consolidating near the 38.2% Fib retrace of Friday's rally.  The VX is also trying to hold just above an upsloping resistance line (on the daily chart), after having bounced from a fresh 2016 low early Friday ahead of the Brexit news to the 2016 high post-Brexit.  Friday's profittaking following the post-Brexit 16-27.5 rally was deep and returned the VX all the way back to Thursday's high.  Weekly, daily and 4hr RSI, Stochastics and MACD are rallying or consolidating recent gains.  I'm flat after having profitably closed longs Friday and will look to go long intraday on any pullbacks to the 20-22.5 range, targeting 25-27.5.

 

VIX (CFE VX Jul16) Weekly/Daily/4hr/Hourly

 

Click here for today's technical analysis on S&P500, Gold

 

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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.


10002




Futures

Event Risk Set to Rise Over Next Two Years


Blu Putnam, CME Group Chief Economist

This video is from CME Group and is being posted with CME Group’s permission. The views expressed in this video are solely those of the author and/or CME Group 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.


10001




Futures

Market Reaction to Brexit Vote and What Comes Next


Erik Norland, CME Group Senior Economist

This video is from CME Group and is being posted with CME Group’s permission. The views expressed in this video are solely those of the author and/or CME Group 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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