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- Varchev Finance – Trading day in one post 08.08.2018
Varchev Finance - Trading day in one post 08.08.2018
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Loading...Asian stock market: Asian stocks traded mostly higher on Wednesday, with major markets tracking higher following Wall Street's gains on strong earnings. Japan's Nikkei 225 edged up by 0.4 percent. South Korean stocks also traded higher, with the Kospi adding 0.27 percent. In Australia, the S&P/ASX 200 was up 0.37 percent, with gains in the heavily weighted financials subindex buoying the broader benchmark. Elsewhere, Hong Kong's Hang Seng Index edged higher by 0.42 percent. Energy-linked stocks traded higher, extending sharp gains seen on Tuesday, with conglomerates and technology names also buoyant.
FX market: Concerns surrounding the diplomatic dispute between the US and Turkey completely overshadowed the attempts of the Turkish Central Bank to support the currency. The Pounds carried another four percent Crash after Turkish President Recep Erdogan said he would respond to sanctions for the detained US pastor in kind. With the decrease in TRY, Turkish central bankers changed the rules for reserves to increase the liquidity of banks in foreign currency - a measure that analysts say insufficient to support the pound. With the pound that is subject to extremely strong pressure and a decline of 28% for the year, the ability of companies to repay their loans in foreign currency is almost impossible. High inflation, in turn, puts pressure on the central bank to continue raising interest rates. The next Central Bank meeting is scheduled for September 13, when investors expect to hear a decision from central bankers. Actually, however, we are unlikely to get that. I would rather expect the CB to confirm the deadlock caused by the controversial Erdogan government. The British pound is set for some major volatility at the start of next year due to ongoing Brexit negotiations, one currency expert told. The currency could see its value drop by as much as 10 percent if the U.K. does not reach an agreement with the European Union over its future trading arrangements, Thanos Vamvakidis, head of G-10 foreign exchnage strategy at Bank of America Merrill Lynch, told. "By early next year either we are going to have a deal and sterling is going way up or we don't, and sterling is going way down," Vamvakidis said, adding that "sterling might be the most interesting currency to trade in the next few months."
Commodities market: Opec's oil production rose in July after Saudi Arabia pumped record volumes to meet increased global demand and the risks posed by controversial Iran-US policy. Oil production in the kingdom increased by 230,000 barrels per day in July to 10.65 million a day. This, of course, is quite weak from the peak achieved in 2016. Higher crude oil production by Saudis, along with Nigeria and Iraq, increased total OPEC production by 300,000 barrels per day, offsetting losses from the spiral economic meltdown in Venezuela, Libya's political clashes and the "new old" US sanctions against Iran . In addition, earlier today, it was clear that US oil reserves were surplus again, this time 3.6 million barrels more. At the June meeting, OPEC agreed that it had reduced supply oversupply and had to restore its output to 100% of its target by the end of 2016.
European stock market: DAX is not performing well, partly because of Linde's downgrade, as the company faces a regulatory hurdle in a $ 42 billion merger with Praxair. DAX lags even today, when we see record levels reached by US indices. The German benchmark may remain so until the end of 2018, as much of the shares in the index struggle with controversial reports in the second quarter. The downturns, though driven by some disposable catalysts, add another worry about German stocks hit hard by US-China trade disputes. The large outflows of the ETF and the increase in short positions raise questions about the sustainability of DAX's long-term upward trend.
U.S. stock market: Big hedge funds are betting that stock prices will remain close to the peaks, despite the August trend to bear short-term market adjustments. Currently, net short positions in VIX options trading are at record high levels, increasing their volume for the fourth consecutive week, according to data from the Commodity Futures Trading Commission. August is the most unstable month in the past two decades, with VIX reaching its highest peak since its creation this month. The lack of economic catalysts today shows, that the major indices will be driven by the direction of the money flows as well as the trade rhetoric surrounding China and USA.
Economic calendar for the European and U.S. trading sessions:
15:30 Canada - Building Permits
17:30 USA - Crude Oil Inventories
Trader Aleksandar Kumanov Read more:
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