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- Varchev Finance: Trading day in one post – 02.05.2018
Varchev Finance: Trading day in one post - 02.05.2018
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Loading...Asian stock market: Asian stocks were narrowly mixed in Wednesday trade following the mixed close on Wall Street as several markets in the region re-opened for trade after a holiday. Japan's Nikkei 225 edged down by 0.27 percent, with the broader Topix also recording slight weakness and trading lower by 0.28 percent as its mining and oil subindexes led losses. Automakers were also broadly traded lower. Down Under, the S&P/ASX 200 bucked the downward trend in the region to gain 0.47 percent as the industrials and information technology sectors gained. Hong Kong's Hang Seng Index hovered around the flat line, with declines in large cap financials and property developers balanced by gains in the technology sector. Casino stocks also gained on the back of revenues topping expectations last month.
FX market: The Bloomberg Dollar Spot Index fell 0.1%. The JPY rose 0.1% to 109.73 per dollar. The EUR rose 0.1% to $1.2004. The Aussie gained 0.2%, after dropping to the lowest since June. U.S. stocks are getting no help from the dollar's advance today -- specifically the DXY Index's break above 92. That's around where the index's 200-DMA and trendline of its decline from the 2017 high converge, as the chart below shows. It's not so much the currency hurting exporters, given a lot of U.S. corporates hedge their FX exposure. Rather, dollar strength is in essence a tightening of U.S. financial conditions, which adds to the frictions across rates, currency and equity markets, according to Bloomberg cross-asset strategist Tanvir Sandhu. All that could amount to lower risk-adjusted returns this year and beyond, making the dollar recovery trade especially painful is the fact that there remains a vast number of short positions out there. One of the other notable casualties of dollar strength today is the euro, whose battle to stay above $1.20 looks like a losing one, especially with growing bearish catalysts over the next few months.
Commodities market: WTI crude rose 0.4% to $67.52 a barrel. Gold rose 0.5% to $1,310.70 an ounce. A surge in U.S. 10-year Treasury yields to above 3 percent suggests a bullish outlook for commodities, according to Bloomberg Intelligence. The Bloomberg Commodity Spot Index, in its third straight year of gains, is lower now than in 2014 when yields last topped 3 percent. With a strengthening global economy, recent gains in crude oil, a pick-up in inflation and a weakened dollar, commodities are poised to rise further.
European stock market: The European indices are expected to open higher after the day-long break that they took yesterday. The German DAX has a gain of about 20 points at 12,584; The French CAC has a 4 points profit, and the UKX remains unchanged. Today, investors will focus on Manufacturing PMI data in Germany and Europe, and these news have a direct impact on DAX - Germany is the world's fourth-largest economy and is highly production-oriented. Lower-than-expected values can have a negative effect on the index, while higher ones will benefit. Also in the region are the GDP data, which will show how the economy is managing in this late economic cycle. Traders will try to answer the question whether Mario Draghi is right to postpone monetary policy action.
U.S. stock market: The Nasdaq composite rose on Tuesday, led by gains in Apple. The tech-heavy index closed 0.9 percent higher at 7,130.70 while Apple climbed 2.3 percent. The S&P 500 also rose 0.25 percent to 2,654.80, erasing earlier losses, as Apple's gains pushed the technology sector 1.5 percent higher. Apple is the largest publicly traded company in the U.S., with a market cap of nearly $850 billion. Meanwhile, the Dow Jones industrial average fell 64.1 points to 24,099.05, with Boeing and Pfizer and 3.4 percent, respectively. Boeing's losses pushed the aerospace sector lower The iShares U.S. Aerospace & Defense ETF (ITA) dropped 1.8 percent and was on track to post its first six-day losing streak since November 2017. Apple Inc. sold 52.2 million iPhones in the fiscal second quarter, in line with analysts’ expectations, showing demand remains strong for the company’s most-important product. The Cupertino, California-based company also reported profit and revenue that beat Wall Street estimates and projected continued sales momentum for the third quarter, saying revenue will be $51.5 billion to $53.5 billion.
Economic calendar for the European and U.S. trading sessions:
10:55 Germany - Manufacturing PMI
11:00 Europe - Manufacturing PMI
11:30 UK - Construction PMI
12:00 Europe - Gross Domestic Product
15:15 USA - ADP Employment Change
17:30 USA - Crude Oil Inventories
21:00 USA - Fed Interest Rate Decision
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