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- Varchev Finance: Trading day in one post – 13.12.2017
Varchev Finance: Trading day in one post - 13.12.2017
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Loading...Asian stock market: Asian markets were mixed in Wednesday trading as investors awaited the conclusion of the Federal Reserve's two-day policy meeting and the dollar edged down following a projected Democrat win in Alabama. Though the Nikkei 225 was lower by 0.56 percent, there were gains among some automakers and most financial stocks. Energy-related names pulled back while tech shares were a mixed picture, with SoftBank off 0.78 percent and Sharp climbing 0.93 percent. Across the Korean Strait, the benchmark Kospi index tacked on 0.54 percent as South Korean President Moon Jae-in began a four-day trip to China. North Korea's weapons program and Seoul's deployment of the THAAD missile defense system are expected to be on the agenda during the trip. In Sydney, the S&P/ASX 200 erased early gains to trade 0.03 percent below the flat line as energy names declined. Santos shed 1.08 percent and Oil Search lost 0.47 percent. Losses were also seen among utilities and gold miners. Hong Kong's Hang Seng Index edged up by 0.28 percent while mainland markets were little changed. The Shanghai Composite was off 0.12 percent and the Shenzhen Composite 0.1 percent lower.
Currency market: The dollar dropped after a special election for a U.S. Senate seat that saw the Republican majority diminished. The Bloomberg Dollar Spot Index fell 0.1%, its first retreat in more than a week. The euro was at 41.1754, up 0.1%. The yen rose 0.2% to 113.34 per dollar. AUD gained 0.3% to 75.72 U.S. cents after climbing for the previous two days to the highest in more than a week. On the eve of Janet Yellen’s second-to-last Federal Open Market Committee meeting as chair of the U.S. central bank, investors are showing the most confidence in nine months toward the prospect of higher interest rates next year. The spread between yields on January 2018 and January 2019 fed funds futures contracts -- a proxy for how many times rates will be raised next year -- widened to half a percentage point on Tuesday for the first time since March, which translates into two quarter-point increases. Back in September, investors weren’t even fully pricing a single hike.
Commodity market: Oil prices fell on Tuesday, retreating after an early surge to a 2½-year high when the United Kingdom's biggest North Sea oil pipeline was shut, crimping the flow of global benchmark Brent crude. The Forties pipeline, which was scheduled to pump 406,000 barrels per day (bpd) in December, was shut on Monday after cracks were found in what traders believe is the first unplanned outage for some years. That pushed Brent prices higher on Monday, and the rally continued into Tuesday morning before prices retreated during U.S. trading hours. Brent crude, the global benchmark, was down $1.34, or 2.1 percent, at $63.35 at 2:29 p.m. ET, giving up all of Monday's gains. The contract earlier broke above $65 for the first time since June 2015, trading as high as $65.83. U.S. West Texas Intermediate crude ended Tuesday's session down 85 cents, or 1.5 percent, at $57.14. It fell from an intraday peak $58.56, which was about 50 cents shy of a 2½-year high. Gold was steady at $1,244.18 an ounce.
European stock market: Market's uncertainty will cast a shadow on the European bourses today as well. All 3 major indices will open looking for a direction. German DAX will start the session 17 points lower at 13,152; French CAC is seen at 5,414 - 6 points decline. UKX is on the positive side this time, notching 4 points at the moment around 7,490. The previously promised 40-45 billion euro from the UK, to pay for Brexit come with one additional condition and it is that this amount will be available on EU accounts only if a trade agreement is signed between the two parties. May's statement, along with the forthcoming Bank of England default rate, sent pounds down, with GBP -0.32% down in the minutes before the end of the day. Despite the backward pace of the Brexit talks, the GBP remains relatively stable, trading with normal volatility. First of all, investors are cautious considering the forthcoming Bank Of England meeting, and on the other hand GBP is supported on the background of the progress in the negotiations on Northern Ireland. We remain in anticipation of Bank of England's decision and considering the high inflation and partial progress of Brexit over the past few weeks, we expect central bankers to change their tone and a few increases next year. In spite of the temporary turmoil in the UK, we remain Long on GBP, and any such statement that causes the currency to adjust will be used to add to the long positions.
U.S. stock market: U.S. stocks rose on Tuesday amid growing optimism that Republican lawmakers would be able to revamp the corporate tax system. Wall Street also looked to the Federal Reserve as its two-day policy meeting kicked off. The Dow Jones industrial average jumped 154 points to an all-time high, boosted by gains in Boeing and Verizon. Boeing shares surged 2.8 percent after the company raised its dividend and approved an $18 billion buyback. Verizon's stock, meanwhile, rose 2.6 percent after Nomura upgraded it to "buy" from "neutral." Nomura also raised its price target on Verizon to $61 per share from $47, representing a 17.7 percent upside from Monday's close. The S&P 500 gained 0.3 percent, notching an intraday record, with telecommunications and financials outperforming. The Nasdaq composite lagged, trading 0.1 percent lower. Traders are looking for the federal-funds interest rate to be raised by a quarter-percentage point, to 1.25%-1.5%. That would mark the third rate increase this year. Fed Chairwoman Janet Yellen, who will soon be leaving the central bank, will host her final post-decision news conference Wednesday.
Economic calendar for the European and U.S. trading sessions:
09:00 Europe - German CPI
11:30 UK - Average Earnings Index + Bonuses
11:30 UK - Unemployment Rate
12:00 Europe - Industrial Production
15:30 USA - Core CPI
17:30 USA - Crude Oil Inventories
Tentative USA - President Donald Trump Speaks
21:00 USA - Fed Interest Rate Decision
21:30 USA - FOMC Press Conference
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