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- Varchev Finance: Trading day in one post – 03.05.2018
Varchev Finance: Trading day in one post - 03.05.2018
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Loading...Asian stock market: Asian shares were mixed on Thursday as investors digested an acknowledgment by the Federal Reserve that inflation had moved nearer its target, and U.S.-China trade talks taking place on Thursday and Friday. South Korea's Kospi index came under slight pressure, with the benchmark slipping 0.1 percent while the junior Kosdaq edged higher by 0.23 percent. Banks and retailers mostly traded lower, while automakers and technology stocks eked out some gains. Down Under, the S&P/ASX 200 climbed 0.75 percent amid broad-based gains seen in all of its subindexes. Greater China markets were in negative territory, with Hong Kong's Hang Seng Index falling 1.46 percent and leading losses in the region. Negativity in the financials and technology sectors, which were down 1.48 percent and 1.99 percent respectively, weighed.
FX market: To see how FX markets gauge progress in the U.S.-China trade talks look at AUD and JPY price action. One outcome that could see a rally in AUD, a proxy for China's economy, would be the Asian nation agreeing to open up its markets more to U.S. companies and in return, retaining the ability to export to America competitively. On the other hand, an escalation of conflict could see a rebound in JPY on the back of haven flows. Given the complexity of the issues, a breakthrough is unlikely at this gig. The U.S. delegation led by Treasury Secretary Steven Mnuchin will probably argue the trade relationship with China has been unfair, and an intellectual property dispute adds to that conflict. But there's at least hope tensions won’t escalate. As Commerce Secretary Wilbur Ross put it: "I wouldn’t go to China if I didn’t think there was hope.
Commodities market: Political changes in Saudi Arabia, as well as recent military activities in the Middle East, have led to additional burdens on the budgets of many countries in the region. The low oil price we observed over the past two years has greatly weakened the treasuries of the Arab world, and even now the strongest economy in the region, Saudi Arabia is producing oil under Break Even Point-a (The price at which the yield does not bear either profit loss). To obtain S.A. "to zero," oil prices should jump to $83 a barrel, and expectations for 2018. are priced between $85 and $ 87 a barrel.
European stock market: The DAX is outperforming European stocks and has broken through the 200-DMA on the heels of its best month since September. Staying above the long-term trend line is key and support will come from economic growth, low rates and a weak euro. The trade spat is just noise at this point. The German economy, while slowing, is still robust and some big DAX components such as Daimler and Volkswagen have reported solid 1Q results. The tide seems to be turning for EUR/USD and that will remove some pressure on earnings and just overall bolster sentiment. German stocks also have support from an ECB that is proceeding slowly from removing the stimulus punch bowl. Steel and aluminum tariffs from the U.S. is a big wild card that may sour sentiment. But after being delayed another month, they may end up being more rhetoric than reality. The EU and businesses are right to warn of more market uncertainty. But investors can put that to one side and instead focus on still-strong underlying fundamentals helped by the soft euro.
U.S. stock market: SPX at key levels after a strong bearish bar during the US Session that tests the bottom of the previous bar. Since the price is close to the SMA 200, this creates a probability of collecting Stop Losses that will accumulate purchases. At these levels there are also limited long positions, which may be a prerequisite for a short-term correction. US stocks closed with declines on Wednesday after Fed kept the interest rates unchanged, mentioning the high inflation. To position ourself in the direction of the impulse, it's a good idea to wait for a correction first. The next levels with limited long positions are about 61.8% Fibonacci, as well as a diagonal across the two bottoms of the daily chart - 2531 and 2550. If the downward impulse continues during the Asian session, which is highly probable due to the weak corporate reports from the latter days that fail to restore investor confidence + the Fed's aggressive tone, these levels will be widely seen as last active support for the index.
Economic calendar for the European and U.S. trading sessions:
11:30 UK - Services PMI
12:00 Europe - Core CPI
15:00 Europe - ECB's Constancio Speaks
15:30 USA - Initial Jobless Claims
15:30 Canada - Trade Balance
17:00 USA - Durable Goods Orders
17:00 USA - ISM Non-Manufacturing PMI
Trader Aleksandar Kumanov Read more:
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