Five things to know before US opening bell

1. The tension with North Korea
US Secretary of State Rex Tillerson said he is seeking a peaceful solution to the nuclear situation with North Korea, while it is clear that the military option remains on the table if the diplomatic efforts of the US administration fail. In the coming days, we expect Donald Trump to launch a series of meetings with the UN General Assembly to discuss the nuclear policy of both, North Korea and Iran. The government's motivation to solve the problem peacefully has a good impact on the markets, as we are seeing yen weakening and index growth since the Asian session.

2. China is considering reforms in the financial sector
The leaders of the People's Bank of China are preparing a package of reforms that will give foreign investors wider access to the financial services sector. Experts familiar with the matter, 6.1 percent of yuan's growth this year gave the country much freedom to loosen control over the capital, as the risks of deflation are currently minimal. This news contributed to the growth of Asian indices during the session in Asia and succeeded in influencing the launch in Europe. We expect positivism to be preserved and transferred to the United States.

3. UK insecurity suppresses GBP growth
British Secretary of Foreign Affairs Boris Johnson plunged into the Brexit talks, days before the official statement of Prime Minister Theresa May. His attempt to resume the promise given during the election campaign and to release 350 million pounds to be fed into the UK healthcare system after the island's exit from the EU was met with serious disapproval by the country's statistical office. Prime Minister Theresa May is currently in Canada and is trying to solve the case between Boeing Co. and Bombardier Inc. for state aid, as the Canadian aircraft manufacturer is one of the largest employers in Northern Ireland.

4. The risk appetite is exacerbated
After the S & P capped the $ 2500 level in the last minutes on Friday, the risk appetite on the market today is extremely sharp. MSCI Asia Pacific ex-Japan Index added 1% to its value. The Japanese markets were closed on the first day of the week. The Stoxx 600 is a 0.3% increase. The largest movement was made by the Portuguese government bonds, with the 10-year benchmark falling by 27 basis points to 2.531%. When opening the US markets, we expect positivism to remain, with any index adjustment we will be looking for new long positions.

5. We expect a busy week
Although today's economic calendar is weak on important data, tomorrow the week will be busy. The most important event the traders are expecting is the Fed's decision on the key interest rate on Wednesday where Janet Yellen is expected to give details of interest rates in December and declare exactly how the Fed intends to cut its $ 4.5 billion balance. Currently, we see positivism in the markets, but as the decision approaches, investors are likely to be more cautious about the dollar and the US indices.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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