Varchev Finance: Trading day in one post - 10.08.2018

Asian stock market: Asian stocks were mixed on the last trading day of the week, taking cues from Wall Street's overnight performance as uncertainty lingered over escalating trade tensions between China and the U.S. Japan's Nikkei 225 slipped 0.44 percent, with insurers and mining stocks leading overall declines. Semiconductor-related plays were also down, with Tokyo Electron dropping 3.34 percent. Elsewhere, the Kospi pulled back by 0.72 percent as major technology names recorded declines in early trade. Samsung Electronics fell 3.52 percent and SK Hynix declined 3.59 percent. The S&P/ASX 200 gave up early gains to trade lower by 0.13 percent. The energy and utilities led losses, losing 1.41 percent and 1.13 percent, respectively, while the heavily weighted financials sector recorded slight gains. Chinese equities were in positive territory, extending the sharp gains made in the previous session. The Shanghai Composite was nearly flat at 0.13 percent in morning trade and the smaller Shenzhen Composite rose 0.52 percent. Still, the Shanghai benchmark was in bear market territory at the end of the last session.

FX market: The pound slipped to the lowest level against the euro in almost nine months amid growing concern that the U.K. could end up leaving the European Union with no agreement for future economic ties. Sterling dropped for the third day versus Europe’s common currency and weakened against most of its Group-of-10 peers. The U.K.'s Trade Secretary Liam Fox said Monday that the European Union is stubborn, and the chances of a no-deal stand at 60 percent. At the same time, trade tensions supported the greenback, which also contributed to the 11-month low for GBP/USD. Heightened concern that the U.K. won’t agree exit terms with the European Union has helped increase demand for pound put options over that for calls.

Commodities market: WTI is currently traded in the $ 3 range, which is the narrowest range since 2003 based on monthly data. Currently, the market is still weighing down US stocks and potential supply constraints in the Middle East against the escalation of trade tensions between the US and China. Oil traders will most likely continue to focus on a series of bearish factors affecting the market this week, including emerging surplus data and renewed concerns about global demand delays.

European stock market: Today European indexes will follow the example of their Asian competitors and launch the trading session with declines. The main reason for this is the increasing tensions between the US and China, which will certainly have an impact on the region's business. Traders are awaiting UK Gross Domestic Product data - as they can give early indications of whether the country's economy is ready and could undertake a new move on monetary policy from the UK central bank. At 15:30 hours, inflation data is expected in the United States. So far, they are modest, but let's not forget that just inflationary fears have been the basis of the January correction.

U.S. stock market: Wall Street's biggest bull is standing by his call that the S&P 500 will jump 12 percent by the end of 2018 as the broad market index nears highs not seen since January. In less than five months, the index will hit 3,200 points by year's end as a healthy economic backdrop and robust corporate earnings support the historic bull market, wrote Canaccord Genuity strategist Tony Dwyer. Optimism among businesses and consumers alike, combined with continued positive quarterly results, suggest "there is a long way to go" despite persistent tariff and trade headlines, he argued. Our "core thesis suggests any pause in the upside should be considered opportunity," Dwyer said in a note to clients Tuesday. "There is no doubt the unpredictable news backdrop of a potential trade war with China and a rise back to 3 percent in the 10-year U.S. Treasury yield can cause increased volatility, but the fundamental backdrop commands using it as an opportunity to add risk." As the most most bullish strategist of all strategists tracked in CNBC's regular survey, Dwyer expects the S&P 500 to rally well beyond its all-time high of 2,872.87, which it clinched on Jan. 26. A spike in market volatility based on fears of higher borrowing costs sent the major stock indexes tumbling more than 10 percent from those benchmarks earlier this year before anxieties surrounding rampant inflation calmed.

Economic calendar for the European and U.S. trading sessions:
11:30 UK - Business Investment
11:30 UK - Gross Domestic Product
11:30 UK - Industrial Production
15:30 USA - Core CPI
15:30 Canada - Employment Change
20:00 USA - U.S. Baker Hughes Oil Rig Count

Read more:

• Retail Sales in Germany during the European trading session
• Macro-fundamentals for the day
• Economic calendar for the European and U.S. trading sessions
• Economic calendar for the European and U.S. trading sessions
• Economic calendar for the European and U.S. trading sessions