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- Varchev Finance: Trading day in one post 20.10.2017
Varchev Finance: Trading day in one post 20.10.2017
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Loading...Asian stock market: Asian stocks rose on Friday after Wall Street wobbled and European stocks took a stumble overnight. Japan's Nikkei 225 rose 0.18 percent after notching its 13th straight positive close on Thursday. Politics were also in the spotlight as the country prepares to head to the polls on Oct. 22. Across the Korean Strait, the Kospi edged up 0.51 percent. Most blue-chip tech stocks pared losses made on Thursday: Samsung Electronics rose 1.47 percent and SK Hynix gained 3.92 percent. Those gains offset moderate losses seen in manufacturing names. Down Under, the S&P/ASX 200 was higher by 0.48 percent, with the utilities sub-index rising 1.92 percent to lead gains on the broader index. The Hang Seng Index climbed 0.83 percent, recouping some losses after closing nearly 2 percent down on Thursday. Experts attributed the fall to a range of factors including tighter liquidity and comments from the governor of China's central bank. Mainland markets were mixed after closing moderately lower on Thursday: The Shanghai Composite was off 0.02 percent and the Shenzhen Composite rose 0.217 percent.
Currency market: In New Zealand, the policies espoused by the Labour Party are suddenly in focus today after it was announced it had reached an agreement with New Zealand First to form a government. It means the largest single party - National, with 44.4% of the vote - will be in opposition.
One difference with National that now becomes more realistic is the Labour Party policy of altering the mandate of the RBNZ to include a full employment component, essentially copying the Fed's dual mandate. That would certainly raise the prospect of looser policy ahead. However, with the unemployment rate at 4.8%, it is unlikely a change in mandate would alter near-term expectations on the policy outlook.
The New Zealand dollar was already the worst performing G10 currency versus the dollar so we would be surprised to see notable further selling after today's sizable drop. In the US, US Senate passes 2018 budget blueprint, setting stage for Republican tax reform effort. Long way to go on tax reform, but a step forward. What this does is to allow Republicans to avoid a Democrat filibuster on a future tax reform bill. USD trading higher on this.
Commodities market: On the energy front, oil prices were a touch firmer after settling more than 1 percent lower in the last session on profit-taking. Brent crude tacked on 0.12 percent to trade at $57.30 a barrel and U.S. West Texas Intermediate added 0.18 percent to trade at $51.38. The increased exports and the unclear future around the agreement between the OPEC countries will continue to suppress the price of oil and this gives us a good opportunity for short-term Short. Technically, it is clear that the levels of around $53 per barrel are difficult to overcome, and after the formation of a lower peak over the past few days and the strong downward impulse, the probability of observing a decrease is greater. In addition, the price is on a horizontal resistance formed by the medium range, which coincides with 61.8% Fibonacci correction.
European stock market: The solid performance from Asia will cast positive moods over the European markets today. DAX is expected to open 43 points higher at 13,039, CAC will gain 14 points to 5,387 and UKX will open around 7,554 - 26 points higher. Today the focus will fall on the corporate earnings, as the bigger names that are expected to publish their Q3 profits are Daimler, Infineon Technologies, Valeo and Renault.
U.S. stock market: The Dow Jones industrial average eked out a record close on Thursday, erasing sharp losses, as Wall Street bet on further gains from corporate earnings. The 30-stock index finished just above the flatline, while Travelers rose 2.4 percent and was the biggest contributor to the gains on the Dow. Travelers reported earnings per share that easily beat expectations. The Dow had fallen 104.93 points at its session lows. Tech giant Apple saw its stock decline 2.5 percent, amid speculation of poor demand and cuts in production of iPhone 8. The stock was also posted its biggest one-day decline since Aug. 10. The S&P 500 also erased its losses to manage a record close, as a 12.2 percent gain in Adobe shares offset steep losses from United Continental. The airline's stock fell 8.2 percent. The Nasdaq composite lagged, falling 0.3 percent. Facebook, Google-parent Alphabet, Netflix and Amazon all finished lower.
Economic calendar for the European and U.S. trading session:
09:00 Europe - German CPI
11:00 Europe - Current Account
11:30 UK - Public Sector Net Borrowing
15:30 Canada - Core CPI
15:30 Canada - Core Retail Sales
17:00 USA - Existing Home Sales
17:30 USA - ECRI Weekly Index
20:00 USA - U.S. Baker Hughes Oil Rig Count
21:00 USA - FOMC Member Mester Speaks
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