Varchev Finance: Trading day in one post - 10.01.2018

Asian stock market: Major Asian markets fell on Wednesday morning despite a solid lead from Wall Street overnight, but Shanghai stocks bucked the trend. The Shanghai composite was up 0.27 percent in early trade. That move followed price data out of the country: Consumer inflation in China rose 1.8 percent on-year in December, which was a touch lower than the market's expectations, while the producer price index topped predictions to climb 4.9 percent on-year, according to Reuters. Meanwhile, the Shenzhen composite traded down 0.11 percent. Hong Kong's Hang Seng index traded near flat. In Japan, the Nikkei 225 declined 0.25 percent despite broad gains across auto stocks and financial plays. Major automakers posted gains: Toyota rose 1.37 percent, Honda was up 2.57 percent and Mitsubishi Motors added 3.7 percent. Banking stocks were also up with Sumitomo Mitsui Financial Group adding 2.14 percent and Mitsubishi UFJ up 1.52 percent. Energy names also traded higher with Inpex shares gaining 2.61 percent. But shares of SoftBank and Fast Retailing — two heavily-weighted names on the Nikkei stock average — were down 0.63 percent and 0.82 percent, respectively. Over in Seoul, the benchmark Kospi index fell 0.23 percent. Shares of tech giant Samsung Electronics fell 2.3 percent Wednesday morning. The stock declined in the Tuesday session on the back of a weaker-than-expected fourth-quarter profit guidance, prompting concerns about the business outlook for its semiconductor business. Rival memory chip maker SK Hynix tumbled 4.81 percent. Australia's S&P/ASX 200 fell 0.4 percent in afternoon trade as most sectors declined. The gold subindex saw the steepest decline, down 1.87 percent, as miners struggled: Newcrest shares fell 2.67 percent, Evolution Mining was down 0.98 percent and Kingsgate tumbled 11.39 percent.

FX market: JPY rose 0.3% to 112.32 per dollar after rising 0.4% on Tuesday. The Bloomberg Dollar Index was flat after two days of gains. The euro traded at $1.1943 following a pullback Tuesday. USD / CAD is trading today with an increase. The rise (weak CAD) moves reversely to the price of oil, which is 1.77% up today. Generally, black gold supports the Canadian, and this is also in contrast to the fundamental (extremely strong employment data in Canada on Friday). The BoC meeting is next week, and the moods are that the bank will raise its interest rates by 0.25 points to 80%. Technically speaking, the pair climbed to 1.24773, which is just below the levels on Friday, when employment growth was well above expectations in Canada. The price broke diagonal resistance and is trading above 100 EMAs at 1.24720 short-term. A 100 EMA breakthrough occurred last December 20th. However, the movement over the period did not attract many purchases and the price fell again (currently traded around 1.24553. For now, bears are trying to take things under control. If the price remains below 100 EMA, it is definitely a bearish signal.

Commodity market: Gold futures fell 0.1% to $1,311.17 an ounce. WTI crude rose 0.8% to $64.38 a barrel, up about 5% since the year began. Oil has been one of the best trades over the past month and the rally continued today with a jump in the past hours. Oil was slightly lower for most of the day but jumped to $64.38 from $61.59 in the past 45 minutes. There's no clear catalyst for the latetst bid but it rose above a key technical level. The 2015 high was $62.58. Our opinion: If the price closes above this levels and tests the breakaway zone - we could position ourselves long. Price Action - 3 White Soldiers - very strong bullish price action signal. We wait for a 50% test of the last soldier before entry. Alternative scenario: If the price fails to make a break - a correction is possible.

European stock market: European markets seem to follow the example of their Asian competitors and open up in the red zone. The German DAX is expected to open a 19-point drop in price of around 13,374. The French CAC will record 7 points loss at the beginning of the session around 5,525; while the FTSE 100 will lose 9 points. Markets remain uncertain as to how US tax reform will move to Europe. The key to the short-term future of the indices will be the beginning of the corporate season. Companies will report their earnings for the final quarter of 2017, with traders focusing on forecasts for the new year. After Deutsche Bank commented that it would suffer major losses due to tax cuts in the US, it would be very interesting to see how the other large lenders in the block will be present.

U.S. stock market: U.S. equities rose to record highs on Tuesday as investors remained optimistic about the market heading into the corporate earnings season. The S&P 500 hit a fresh all-time high, rising 0.1 percent. The index is also enjoying its best start to a year since 1987. The S&P 500 notched its biggest six-day gain to kick off a year since then. The Dow Jones industrial average jumped 103 points to hit a record as Boeing reached an all-time high. The Nasdaq composite climbed 0.2 percent and also hit a record. "It's been a great start to the year. The momentum we saw in 2017 carried over into this year," said Jim Davis, regional investment manager at U.S. Bank Wealth Management. Financial giants BlackRock, J.P. Morgan Chase and Wells Fargo are among the companies set to report quarterly results later this week. "Q4 is going to be fine," said Maris Ogg, president at Tower Bridge Advisors. "I think the most important thing is going to be getting information on the impact of the tax cuts company by company. There's no reason that shouldn't be mostly positive." President Donald Trump signed a bill last month that cut the federal corporate tax rate to 21 percent from 35 percent.

Economic calendar for the European and U.S. trading sessions:
11:30 UK - Manufacturing Production
14:00 USA - MBA Purchase Index
15:00 UK - NIESR GDP Estimate
15:30 USA - Export / Import Price Index
15:30 CAD - Building Permits
16:00 USA - Chicago Fed President Evans Speaks
17:00 USA - Wholesale Inventories
17:30 USA - Crude Oil Inventories
20:30 USA - FOMC Member Bullard Speaks

Read more:

• And for all the bounty hunters: Iran offers $80m for the head of Donald Trump
• US service member and 2 US Defense Dept contractors killed in Kenya attack
• Iranian Quds leader Qasem Soleimani has been killed – how are markets reacting
• A calm end of an otherwise loud 2019
• Old but Gold – Top 5 posts of Varchev Finance