Ucap Hong Kong Asset Management Limited. Weekly Technical. 20 th September 2016

Transcription

1 Ucap Hong Kong Asset Management Limited Weekly Technical 20 th September 2016

2 Highlights Chart of the Week MSCI World The market remains below the resistance level at 1 725, increasing the probability of a reversal during the weeks to come. We highly recommend to remain extremely cautious in this context and be partially to totally protected. Chart Of the Week : Emergingsvs S&P 500 We have been monitoring the relative performance of Emerging Markets vs the S&P 500 for some time and have been waiting for an attractive entry point. We recommend to trade this market neutral pair trade by being Long MSCI EM ETF vs S&P 500 ETF packaged in a Mini future certificate including leverage or not. Equity Markets S&P 500 Monthly & Daily As we had been expecting for a whole 8 weeks, we have reached out 1st support target level at The close of the month will determine whether the break out is still in play. Global Markets US T-Note Daily The T-Note is testing its support as the Fed has become more hawkish. Stay moderately long for the time being unless we break on a weekly basis. Dollar Index Weekly The US Dollar Index has rebounded ahead of the September FOMC meeting. We continue to expect the index to reach within the next quarter. The strong support level still lies at 92. Given the diversification within the index, it is easier to play it than buy individual pairs given recent volatility.

3 Global Equities YTD Performance Review Equity Indices Value Local YTD % Chg USD YTD % Chg EUR YTD % Chg North America Dow Jones 18' % 4.24% 1.30% S&P 500 2' % 4.87% 1.92% Nasdaq 100 4' % 4.61% 1.67% Europe EuroStoxx 50 2' % -6.56% -9.16% FTSE 6' % -2.09% -6.10% SMI 8' % -4.98% -7.65% DAX 10' % -0.67% -3.44% CAC 4' % -2.52% -5.24% MIB 16' % % % IBEX 8' % -6.07% -8.68% Asia & Emergings Nikkei 16' % 2.54% -0.36% HSCEI 9' % 0.80% -2.07% Kospi % 11.08% 7.86% TAIEX 9' % 14.89% 11.65% IBOV 57' % 61.38% 56.88% Nifty 8' % 9.62% 6.55% Russian RTS 12' % 25.91% 21.24% MSCI EM % 14.71% 11.48% MSCI World 1' % 2.02% -0.85%

4 Chart Of the Week: MSCI World Monthly The market remains below the resistance level at 1 725, increasing the probability of a reversal during the weeks to come. We highly recommend to remain extremely cautious in this context and be partially to totally protected.

5 Chart Of the Week: Emergingsvs S&P 500 We have been monitoring the relative performance of Emerging Markets vs the S&P 500 for some time and have been waiting for an attractive entry point. We recommend to trade this market neutral pair trade by being Long MSCI EM ETF vs S&P 500 ETF packaged in a Mini future certificate including leverage or not.

6 Equity Markets

7 S&P 500 Monthly& Daily As we had been expecting for a whole 8 weeks, we have reached out 1st support target level at The close of the month will determine whether the break out is still in play.

8 Nasdaq 100 Monthly& Daily The Nasdaq remains below its 16 year resistance level. The support zone is located in the range of to where we believe the market should initially consolidate to. Stay nimble

9 DJ Euro Stoxx50 Monthly The Eurostoxx50 remains in a downtrend and remains below the Weekly & Monthly Resistance level at

10 DJ Euro StoxxBanks Daily The EurostoxxBanks Index rejected the resistance mark last week & remains in the global downtrend we are observing since the breakdown of September We recommend to sell rallies and even keep a small short position to neutralise Europe Beta risk until we break

11 Nikkei 225 Weekly We have no conviction opinion linked to the Japanese market but have started buying USDJPY since we reached our buying target below 101. We believe the currency could weaken considerably over the coming year, indirectly helping equities to outperform on a relative basis.

12 Global Markets

13 US T-Note Daily The T-Note is testing its support as the Fed has become more hawkish. Stay moderately long for the time being unless we break on a weekly basis.

14 US High Yield Tracker Weekly US High Yield has lived a strong rally since the break out that took place in the zone of USD We believe prices should be topping out in the USD 87 to 89 zone as yields reach a level of 5.00%.

15 German 10Y Bond Rates Weekly The German 10y government bond yield as rebounded slightly above the 0% mark. The massive ECB QE program and the low inflation environment point to low rates for a long time rates will stay low for a long time.

16 US Swap Curve Weekly The US 2Y-10Y Swap curve continues to flatten has interest rate hikes expectations are low over the next years.

17 Dollar Index - Weekly The US Dollar Index has rebounded ahead of the September FOMC meeting. We continue to expect the index to reach within the next quarter. The strong support level still lies at 92. Given the diversification within the index, it is easier to play it than buy individual pairs given recent volatility.

18 EURUSD Weekly The pair remains in the same range and the moves are clearly driven by US rate hike probabilities. Remain nimble trading and take advantage of volatility spikes.

19 USDJPY Monthly The Dollar/Yen seems has bottomed out and should eventually return to 120. The Japanese central bank has left the door open for further action in September and the long-term support has held. Stay long.

20 GBPUSD Monthly The Cable closed the month of June below the 20-year neckline. The path is now officially opened to head towards our target set at 1.05/1.10 over the next 18 months. We recommend buying protection or short GBPUSD on strength & build a medium-term short position.

21 Gold Weekly Consolidation is pursuing on the basis of decorrelation with the US Dollar. We need 1 or 2 weeks close above in order to make the next move. Range trade the underlying in the mean time.

22 WTI CrudeOil Monthly We continue to play the $40-$50 range on the WTI until a longer term pattern emerges.

23 Disclaimer Ucap Hong Kong Asset Management Ltd has issued this document for information purposes only. This document may not be distributed to the United States, Canada, Australia or to any other jurisdiction in which its distribution is unlawful. If you require investment advice or wish to discuss the suitability of any investment decision, you should contact your professional advisers for financial, legal or tax advice when appropriate. This document is not and should not be construed as an offer to sell or a solicitation of an offer to purchase or subscribe for any investment or service. Ucap Hong Kong Asset Management Ltd has based this document on information obtained from sources it believes to be reliable but which it has not independently verified. Ucap Hong Kong Asset Management Ltd makes no guarantees, representations or warranties, and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion herein are subject to change without notice. Members of the Ucap Hong Kong Asset Management Ltd and/or their officers, directors and employees may have positions in any securities mentioned in this document(oranyrelatedinvestment)andmayfromtimetotimeaddtoordisposeofanysuchsecurities(orinvestment). InthecasewherethisdocumentisdistributedintheUnitedKingdombyapersonwhoisnotauthorizedbytheUnitedKingdomFinancialServicesAuthority;itisonly intended for persons who (i) have professional experience in matters related to investments or (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended) or to whom it may otherwise lawfully be communicated by such an unauthorized person(all such persons together being"relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. Pastperformanceis notnecessarily a guideto futureperformance. Thevalueofany investmentorincomemay go down as wellas up andyou may notreceiveback the full amount invested. When an investment is denominated in a currency other than your local or reporting currency, changes in exchange rates may have an adverseeffectonthevalue,priceorincomeofthatinvestment.inthecaseofinvestmentsforwhichthereisnorecognizedmarket,itmaybedifficultforinvestorsto sell their investments or to obtain reliable information about their value or the extent of the risk to which they are exposed. Investment in any market may be extremely volatile and subject to sudden fluctuations of varying magnitude due to a wide range of direct and indirect, influences. Such characteristics can lead to considerable losses being incurred by those exposed to such markets. Copyright. Ucap Hong Kong Asset Management Ltd 2015 ALL RIGHTS RESERVED No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, whether electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Ucap Hong Kong Asset Management Ltd.