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- Varchev Finance: Trading day in one post 15.01.2018
Varchev Finance: Trading day in one post 15.01.2018
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Loading...Asian stock market: Asian markets are trading with increase during the first day of the week. Japan's Nikkei is up 0.28%, as the financial and technology sector was responsible for raising the index. Korean Kospi climbed 0.14%. Australian ASX added 0.1% to its value. Major mining companies are on the rise. BHP and Rio Tinto reported an increase of 0.84% and 0.97% in stock price. Chinese markets are trading in mixed moods. Hang Seng is up 0.77%, while Shenzhen composite and Shanghai composite are down 0.61% and 0.21%.
FX Market: The weakness of USD continues. During the Asian session, the dollar dropped to a 3-year low against the EUR and is at the key level of 1.22. A break above this level will confirm the weakness of the US currency. For the time being, 3 interest rate rises are expected in 2018, but they have already been priced in by the market. We may see an increase in USD if the FED commented on an additional 4th rate hike. Another factor that can support the value of the dollar is if the CPI (the official measure of inflation) rises to around the target of the central bank - 2%. CAD: The Canadian dollar continues to rise. This week we expect the BoC meeting and an increase in the base interest rate to 1.25%. The moods around CAD remain very positive. The country's economy is developing at a good pace. The high oil price reflects very positively on the value of the Canadian dollar. We remain positive to CAD. JPY: We see a change in sentiment in the yen. BoJ has already reduced its quantitative easing once. During the Asian session, the President of the Central Bank announced that if needed BoJ cad reduce QE or increase QE. The economy of the country is stable, the financial system works well. If necessary, the bank will expand its monetary base to reach its inflation target. All of these news led to the yen rising, expecting it to stay in the next few weeks.
Commodities market: GOLD: It seems like there is nothing to stop the rise in the price of gold. Although the global environment is relaxed, investors continue to appreciate the hedging metal. The main reason for this is the weak dollar (GOLD is quoted in USD) and low US inflation. Today the precious metal opens in a downward gap, but quickly fills it, indicating that positive moods remain toward the metal. The price is already above the $ 1340 support and is headed for the peak at $ 1357.50 on September 8, 2017. OIL: The price of black gold futures indicates a decline during the Asian session. Brent traded with a 0.2% drop at $ 69.72 a barrel and WTI with a 0.01% drop at $ 64.27 a barrel. Market analysts believe that rising oil prices in the US and Canada will lead to a fall in oil prices over the medium term. For now, the OPEC agreement remains in place, and we can conclude that OIL's price will not drop significantly.
European stock market: European benchmarks will open in green territory. The German DAX will open with around 40 points increase at 13278eur, the french CAC, with a 13 point rise of 5524eur and the UK's UKX with a 10 point increase of around 7788 pounds. We expect a strong start in the markets in Europe. It is already official: there is a coalition in Germany. Chancellor Angela Merkel and Martin Schulz reached a deal Friday on a coalition government. This will be the engine of the European market today as the expectations for the rise of the German index.
American Stock Market: The reporting season has begun and this is seen in the US stock market. The indices made new peaks last week. For the time being, driven by companies' better reports, investors remain undisturbed. We need to be careful when the big Wall Street banks publish their fiscal statements. We believe that due to the tax reform, banks will report much worse than expected results for the fourth quarter. But in the long run, tax breaks will have a very positive impact on the banking sector.
Economic calendar for the European and American trade sessions 15.01.2018
12:00 EU - Trade balance
20:15 UK - MPC member Tenreyro speaks
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