Varchev Finance: Trading day in one post 05.01.2018

Asian stock market: Asian markets tracked stateside gains on Friday after the Dow Jones industrial average hit a major milestone. Markets in the region had traded at or around multi-year highs in the prior session, with Japan's benchmark index hitting a 26-year high and the Hang Seng Index touching a decade-high. Japan's benchmark Nikkei 225 index tacked on 0.17 percent, extending gains of more than 3 percent seen in the previous session when it touched levels not seen in 26 years. The rally saw most sectors, including automakers and financials, in positive territory. Across the Korean Strait, the Kospi rose 0.54 percent, with automakers a touch higher after closing lower in the last session. Tech blue chips also drove gains on the index. Hyundai Motor edged up 0.34 percent and SK Hynix rose 2.46 percent. In Australia, the S&P/ASX 200 edged up 0.6 percent as the telecommunications, gold producers and materials sectors rose. Those moves followed gains in the commodities space, with iron ore and copper gaining in the last session. Greater China markets were mostly higher in the morning. The Hang Seng Index edged up 0.21 percent as stocks continued to rally in the new year. Financials, technology names and property plays climbed on the day. The Shanghai Composite edged up 0.07 percent and the Shenzhen Composite was flat. Тhe pace of the Bank of Japan’s quantitative easing is slowing down further, with money supply in December rising by the least -- in percentage terms versus a year earlier -- since January 2013. The deceleration is likely to continue in the near future, according to Maiko Noguchi, a senior economist at Daiwa Securities Co. and a former BOJ official. “Since the BOJ shifted its policy toward yield-curve control, as long as the desired yield curve is being maintained, the amount of asset purchases itself isn’t being pursued so much,” she said. “It’s natural to assume that purchases will keep slowing down.”

FX Market: The Bloomberg dollar index is down 0.6% for the week, at around the lowest since September. The euro was little changed on the day, trading at $1.2073, near a three-year high. The pound strengthened 0.1% to $1.3563 per dollar. This may be the year in which the GBP will end the bearish trend and will return to the levels before the Brexit decision. An early UK-EU trade deal and positive economic data coming from the island could boost sterling profits and even lead to an increase in the Bank of England interest rate in the first half of the year, says Viraj Pate, strategist at ING Group NV. The Dutch bank is not the only one who thinks GBP will grow in 2018. Bank of America Merrill Lynch and Nomura International also expressed their opinion, and the consensus forecast is at a peak of about $1.52 per pound. ING believes that the 2017 growth. compared to the USD will continue, and in the next three months the price of 1.40 GBP/USD is fully possible, and after reaching, short-term consolidation. Commodity currencies are faring relatively well this morning as oil prices hold onto the bulk of yesterday's gains. The AUD may also have benefitted from a rise in iron ore prices overnight as well as a healthy print on China's Caixin services PMI, which moved to a three- year high of 53.9. Our economists note that China's services sector, which accounts for over half the economy and generally echoes consumer spending, looks set to support growth alongside the robust readings for the manufacturing PMI. The NZD has also enjoyed a good bounce overnight against a retreating USD after a more challenging session yesterday.

Commodity market: WTI cure was steady at $61.93 a barrel. Gold dipped 0.1% to $1,321.61 an ounce. The Bloomberg Commodity Index was flat Thursday, near its highest since last February. SPDR Gold Shares ETF started the year with a 1.2% increase on the second of January and increased the annual profit to 11%. This is due to two factors, the declining dollar and the willingness of investors to hedge some of the new long positions of the indices, accumulated during the seemingly tireless ascending trend. As gold enters the over-purchase area and the Dollar Index is close to a key level, we expect the gold rally to slow down and the rebound of the dollar at the key levels, expect a short-term retracement of the precious metal.

European stock market: Today European indices are expected to open in positive territory, following the example of their counterparts. The German DAX will start the session with a 23 point increase of around 13,189; The French CAC will start trading around 5.412 - 6 points profit, and the UKX remains unchanged. Today, investors will pay special attention to retail sales in Germany, as they may have a short-term effect on the German index trend. At 12:00, we are also expecting Eurozone CPI news, which will give a clear idea of ​​where the bloc's inflation is moving. Inflation in the union remains strongly below the central bank's target of 2%. If data is below expectations, we may see a decline in European indices.

U.S. stock market: The Dow Jones industrial average broke above 25,000 for the first time on Thursday, tying the fastest 1,000-point move in its history, following the release of stronger-than-expected jobs data. The 30-stock index climbed 152.45 points to 25,075.13, with General Electric, DowDuPont and IBM rising about 2 percent. "The Dow hitting 25,000 was a pretty wild idea even a year ago. And while its symbolically important, the real story is never just a number. It's the underlying strength that is pushing markets this high," said Steve Claussen, vice president of trader strategy at E-Trade. The Dow broke above 24,000 for the first time on Nov. 30, or 35 calendar days prior to hitting 25,000. It also took the Dow just 35 days to rise from 20,000 to 21,000 last year. The S&P 500 gained 0.4 percent to close at 2,723.99, with financials rising 0.9 percent. The Nasdaq composite advanced 0.2 percent to finish at 7,077.91. Both indexes also closed at all-time highs.

Economic calendar for the European and U.S. trading sessions:
09:00 Europe - German Retail Sales
12:00 Europe - CPI
15:30 USA - Average Hourly Earnings
15:30 USA - Nonfarm Payrolls
15:30 USA - Unemployment Rate
15:30 Canada - Employment Change
17:00 USA - ISM Non-Manufacturing PMI
17:30 Canada - Ivey PMI
19:30 USA - FOMC Member Mester Speaks
20:00 USA - U.S. Baker Hughes Oil Rig Count
22:30 USA - CFTC Speculative Net Positions

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