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Macro

Eurex: Asia-Pac Holidays Limit Liquidity


Morning Briefing September 24th 2018


A rather subdued Monday gets the week underway, with the calendar starting at 0800GMT, with the release of the German IFO Survey for September. The August reading was 103.8.

Up next, at 1000GMT, is the UK CBI Industrial Trends data for September. The previous order books balance was +7.

Moving to the afternoon and at 1230GMT is wholesale trade data in Canada for July. The growth in sales in June was -0.8%.

The BNB Business sentiment is at 1300GMT for September. The August reading was -0.3.

ECB President Mario Draghi is speaking in Brussels at 1300GMT.

The Dallas Fed manufacturing index for September at 1430GMT is the only real piece of data in the US with markets focused on Tuesday's 2-day FOMC meeting. The August reading was 30.9.

Global Economic Trading Calendar


Markets


US TSYS: It has been an extremely limited session for U.S. Tsys, with T-Notes sticking to a 1+ tick range. - As a reminder cash Tsy markets are closed for a Japanese market holiday. - The space has had little reaction to weekend headlines from the WSJ which noted that China has cancelled the planned trade talks with the U.S. amid escalation of tariff threats. - The Eurodollar strip trades unchanged to a tick higher last.

AUSSIE BONDS: Aussie Bond futures have stuck to a tight range, with U.S. cash Tsys closed for a Japanese market holiday. - Bonds have failed to benefit from the weekend headlines which noted that China has pulled out of the upcoming scheduled trade talks with the U.S. amid escalation of tariff threats. - The domestic 3-/10-Year yield differential continues to hover around 59bp. - The repo market continues to exhibit the signs of quarter end tensions, with rates treading higher again today. 3-Month BBSW fixed 1bp higher today, but still lags the move seen in repo thus far in the cycle. - The Bill strip trades unchanged to 2 ticks higher last. - The AOFM's auction of A$800mn of the 2.75% 21 November 2029 Bond was easily absorbed with the cover ratio holding up and tail holding steady.

STOCKS: Many of the major Asia-Pacific regional indices were closed for national holidays on Monday. - The Hang Seng last trades 1.2% lower, pressured by China walking away from the upcoming round of trade talks with the U.S. The health care and consumer discretionary sectors led the way lower, while the utilities & industrial sectors edged slightly higher. - Australia's ASX 200 traded marginally lower, with the heavyweight materials and financial sectors providing some modest pressure. Conversely energy & real estate provided the biggest sectoral boosts to the index. - U.S. index futures edged lower.

OIL: The heavily awaited OPEC+ gathering in Algiers came and went over the weekend, with the cartel and its allies deciding not to commit to any fixed increase in output levels, instead choosing to focus on getting the current production pact compliance down to 100%, in part to appease Iran. - Heavyweight producers Saudi Arabia & Russia highlighted their capability to produce more, if required. - The outcome has supported crude prices, with WTI & Brent adding $0.80 & $1.00 respectively. - Elsewhere Libya highlighted that it is producing the most crude it has since July 2013. - Iran continued to stick to its hard lines re: ceding production to its OPEC+ counterparts, but seemed open to deal compliance moving to 100%. - Elsewhere, Baker Hughes rig count data revealed that the U.S. had 1 less active oil rig in the latest week.

GOLD: Gold struggled, failing to benefit from the latest U.S. China trade war ripples and traded sub-$1200/oz for the entirety of the session.

FOREX: It has been a fairly limited session for the FX space with Japan, China & South Korea observing market holidays, sucking liquidity out of the Asia-Pac time zone. - AUD & NZD have come under some modest pressure on the back of weekend headlines from the WSJ which noted that China has cancelled the planned trade talks with the U.S. amid escalation of tariff threats. - Elsewhere GBP shrugged off the latest round of Brexit headlines after PM May's hard line against the EU weighed on GBP on Friday. Brexit Sec Raab maintained the rhetoric over the weekend, while Telegraph reports suggested that a majority of PM May's Cabinet now back a Canada-style trade deal. Other weekend highlights include a Times story suggesting that May's aides have been contingency planning for a November snap election to save Brexit talks & the PM's future. GBP/USD posted a bearish reversal on Friday, as the 100-DMA gave way, allowing bears to target $1.3000. Bulls need a break back above $1.3200 to turn the technical outlook back in their favour. Rate last $1.3075.

Technical Analysis


BUND TECHS: (Z18) 100-DMA Now Resistance

A strong end to the week in Dec-18 Bund futures allows bulls to now target the 100-dma at 159.14 which is now acting as resistance ahead of a potential return to the Sep 12 high at 159.78. Above here would mark a bullish reversal. Bears continue to target the Aug 1 lows at 158.37 and a break below would suggest a further medium-term weakness.

EUROSTOXX50: Approaching Resistance Area

Eurostoxx50 has has a good run of late but a number of overhead resistance level are coming into play suggesting the rally will begin to struggle. The Aug 28 high of 3426.81 is the first resistance level, and a break above here would bring key down trendline resistance from the Jan high into play. Bears look for a close back below the Sep 18 low at 3337.37 to return the focus to the March 26 low at 3261.86.

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.


20510




Technical Analysis

Tradable Patterns - Nasdaq100 (NQ) Breaking Weekly Chart Ascending Wedge Support


Nasdaq100 (NQ) reversed Thursday's gains Friday, and appears vulnerable this week as its weekly Doji lower shadow last week broke the weekly chart's ascending wedge support.  As last week's high struggled to push only slightly above the previous week's high, NQ could very well slide this week towards what may become upchannel support (on the daily chart).  The weekly, daily and 4hr RSI, Stochastics and MACD are tiring or steadily sloping down.  I am looking to enter short in the red zone (of the daily chart), targeting the green zone for Wednesday.  The amber/yellow zone is where I might place a stop if I was a swing trader (although in my personal account with which I seldom hold overnight I sometimes set my stops tighter).
 
Nasdaq100 (CME NQ Dec18) Weekly/Daily/4hr
 
 
Click here for today's technical analysis on Soybean, VIX
 

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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.

 


20509




Macro

Interactive Brokers - Asia-Pacific Calendar: The Week Ahead


Interactive Brokers senior market analyst Steven Levine provides some highlights for what to look for in the Asia-Pacific region in the week beginning September 24.

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The analysis in this material 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 IBKR 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.


20489




Macro

GUOSEN Closing Bell (September 21)


MARKET

Stocks in China were set to cap the strongest rally since February as investors take in evidence that China was supporting its expansion. Bank and Coal sectors were the best performers, while no sector fell. Combined turnover for both markets was CNY 321.2 bn, up 28.32% dod.

 

 

Close

% Change

Vol (bn CNY)

%YTD

Shanghai

2797.48

2.50

148.98

-15.41

Shenzhen

8409.18

2.13

172.52

-23.83

CSI 300

3410.49

3.03

123.57

-15.39

ChiNext

1411.12

1.69

46.41

-19.49

 

Sector

Top 1

Led by

Top 2

Led by

Upward-leading

Bank

601288

Coal

601088

Downward-leading

 

 

 

 

 

NEWS

*Many brokers announced to quit this year’s New Fortune competition, after the recent scandal. (Wind)

 

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.

 


20507




Macro

Briefing.com - Holding a Bullish Line


There was no mistaking the stock market's bias on Thursday.  It was bullish at the start and bullish at the close.  The highlight of it all was that the S&P 500 and Dow Jones Industrial Average set new record highs. 

It was an orderly rally on Thursday, which is to say there wasn't panic buying.  There was a steady bid, however, that conveyed confidence in the trend and a tacit feeling of not wanting to miss out on further gains.

The volume was heavier than average at the NYSE and Nasdaq, but it wasn't extremely heavy.  That will likely change today given that it is a quarterly options expiration day.

At the moment, the major indices look poised for a modestly higher start when the opening bell rings.

The S&P futures are up four points and are trading 0.2% above fair value.  The Nasdaq 100 futures are up 15 points and the Dow Jones Industrial Average futures are up 53 points.

The futures had been signalling an even stronger move to the upside, yet they started fading about 4:00 a.m. ET, which is when the eurozone released a disappointing preliminary manufacturing PMI report for September.

That PMI reading checked in at 53.3 versus a prior reading of 54.6.  That disappointing reading didn't derail the equity markets in Europe, though, as it was likely seen as a basis for the ECB to be very deliberate with policy actions that remove accommodation.

The euro is off a bit against the dollar, but the DAX, the CAC 40, and the FTSE 100 are up between 0.4% and 1.0%.  Those gains came on the heels of even better showings from markets in Asia.  The Nikkei added 0.8% while the Hang Seng and Shanghai Composite shot up 1.7% and 2.5%, respectively.

The strength in the Shanghai, which rose 4.3% this week, was attributed to the thinking that the government is going to provide support tools that will help offset any impact from the tariffs.  We'll see, but it was a strikingly good week for the stock market there, which has not acted well in 2018 amid the tariff action and a slowdown in economic activity.

There aren't any major economic releases of note out of the U.S. today, yet there are some corporate stories of note.

Walmart (WMT) has reportedly warned that it might have to raise prices because of the tariffs and Micron (MU), which posted better than expected fourth quarter earnings, issued disappointing guidance for its fiscal first quarter, citing in part gross margin pressures linked to the tariff actions.

Shares of WMT are down 0.5% while shares of MU are down 3.9%.  Conversely, shares of Texas Instruments (TXN) and Dow component McDonald's (MCD) are up 2.1% and 0.6%, respectively, after both blue chip companies announced sizable dividend increases.

There is some curve-flattening action early on in the Treasury market.  The 2-yr yield is up two basis points to 2.82% while the 10-yr yield is unchanged at 3.08%.  That could slow some of the upward momentum driving the financial sector, which is up 2.6% for the week entering today's trading.

The S&P 500 is up "only" 0.9% for the week, bringing its year-to-date gain to 9.6% (before dividends) and conveying a message that trade matters thus far have not derailed trading matters that appear to be rooted in the optimism over strong economic and earnings growth.

--Patrick J. O'Hare, Briefing.com

--

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This material is from Briefing.com and is being posted with Briefing.com's permission. The views expressed in this material are solely those of the author and/or Briefing.com and IBKR is not endorsing or recommending any investment or trading discussed in the material. 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 IBKR 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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