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- Varchev Finance – Trading day in one post – 03.01.2018
Varchev Finance - Trading day in one post - 03.01.2018
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Loading...Asian stock market: Asian stocks notched moderate gains on Wednesday, tracking sizable increases seen on Wall Street overnight as the dollar remained in the doldrums. South Korea's benchmark Kospi index edged up 0.25 percent as large cap technology names extended the moderate gains seen last session. Heavyweights Samsung Electronics and SK Hynix rose 0.9 percent and 1.57 percent, respectively. Steel plays were also higher in the morning, with blue-chip Posco jumping 5.31 percent and Hyundai Steel rising 2.62 percent. The Korean won touched a more-than three-year high against the dollar in the last session. On Wednesday, the currency gave up some gains to trade at 1,065.80 won to the dollar after strengthening as much as 1,058.97 in the last session. Hong Kong's Hang Seng Index edged up 0.27 percent early in the session after soaring 2 percent on Tuesday. Technology shares continued their ascent: Apple supplier AAC Technologies rose 3.6 percent and heavyweight Tencent tacked on 1.68 percent. Mainland markets also trended higher, with the Shanghai Composite advancing 0.18 percent and the Shenzhen Composite inching up by 0.07 percent. Down Under, the S&P/ASX 200 edged up 0.13 percent as mining stocks led the index higher. Rio Tinto and BHP, the country's two-largest miners, were up 2.47 percent and 1.92 percent, respectively. Gold producers were a mixed bag, but traded higher on the whole, with the S&P/ASX All Ords Gold sub-index rising 1.3 percent. Japanese markets are closed on Wednesday for an exchange holiday.
Currency markets: The pound is the top performer today and the US dollar is lagging. The pair is up nearly 1% in a quick start to 2018. More importantly, the pair climbed through the December high and is now testing the best levels of last year. In September, the pair hit 1.3657. Today's move is about broad USD weakness and some early optimism. What's interesting is that the pound climbed last week in one of the quietest news weeks of the year. That's typical of GBP but whenever the news picks up, it's usually (bad) Brexit news so the risks are rising. Economic data risks are more two-sided and this week they include the Markit UK construction PMI (tomorrow), house price data (Thursday) and the services PMI with Q3 unit labor costs on Friday. There are no BOE speakers on the agenda. The NFP for December is out on Friday in the US, due at 1530 GMT on December 5. The consensus median for the headline is +190K after November's +228K Nonfarm payrolls rebounded strongly in October and November following the hurricane-disrupted readings in August and September. Incoming data on labor markets, including initial and continuing claims, point to another month of solid employment growth. We expect nonfarm payrolls to rise by 175k, in line with the year-to-date monthly average, and for private sector payrolls to rise by 170k. We look for the unemployment rate to decline by 0.1pp to 4.0%, for average hourly earnings to rise by 0.3% m/m and 2.5% y/y, and for average weekly hours to hold steady at 34.5. EUR/USD drove higher into year-end, briefly spiking above 1.1980/1.2010 resistance. Short-term momentum is in overbought territory, suggesting scope for a further extension could be limited. Key medium term resistance remains in the 1.21-1.23 region. We see ongoing range trading as most likely for the time being, with a decline back through 1.1910-1.1880 adding conviction to that view. The lower bound of the medium-term range is currently in the 1.15-1.14 support region.
Commodity market: WTI was steady at $60.37 a barrel. Gold fell 0.3% to $1,313.38 an ounce, heading for its first drop in nine days. Gold is opening the new year on the front foot, trading above $1,300 an ounce and set for best run since mid-2011 as prices gain for an eighth session. The rise builds on 2017’s surge, when the metal posted its best year in seven, while the Dollar Spot Index sagged even as the Federal Reserve raised rates. “As global complacency over the trajectory of U.S. rates continues to be astoundingly low, precious metals in general should continue to benefit,” said Jeffrey Halley, senior market analyst at Oanda Corp.
European stock market: European markets are expected to open with mixed moods. The German DAX will record about 23 points and will open at a price of 12,908; The French CAC will start trading with 3 points profit of 5,290 while UKX has a 3 point loss of 7,645. Today investors will be interested in employment data in Germany, which can determine the short-term movement in the German index. In the UK, traders will expect PMI data in the construction sector.
U.S. stock market: U.S. stocks kicked off the new year on a high note on Tuesday as Wall Street bet on another strong year for equities. The S&P 500 gained 0.8 percent to close at 2,695.79, notching intraday and closing records, with consumer discretionary, energy materials and tech all rising more than 1 percent. The Nasdaq composite advanced 1.5 percent to 7,006.90, also hitting record highs. The index also closed above 7,000 for the first time. The Dow Jones industrial average rose 104.79 points to finish at 24,824.01, with Disney shares climbing 4 percent. "This is basically an extension of what we saw in 2017," said Peter Cardillo, chief market economist at First Standard Financial. "With economic data being strong, investors are betting that economic growth will translate into strong earnings growth."
Economic calendar for the European and U.S. trading sessions:
11:00 Europe - German Unemployment Rate
11:30 UK - Construction PMI
17:00 USA - ISM Manufacturing PMI
21:00 USA - FOMC Meeting Minutes
23:30 USA - API Weekly Crude Oil Stock
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