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- Varchev Finance: Trading day in one post 16.01.2018
Varchev Finance: Trading day in one post 16.01.2018
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Loading...Asian stock market: Asian markets traded mostly higher on Tuesday as the dollar nursed overnight losses. Japan's Nikkei 225, which had earlier hovered near the flat line, rose 0.55 percent late in the morning. Subaru advanced 2.59 percent to outperform its peers. The company said it expected sales stateside to increase by 5 percent this year to 680,000 vehicles, the Wall Street Journal reported Monday. Other Japanese automakers were mostly higher: Toyota added 0.82 percent and Honda tacked on 0.15 percent. Across the Korean Strait, the Kospi erased early losses to climb 0.19 percent as index heavyweight Samsung Electronics rose 1.36 percent. Rival chipmaker SK Hynix also recorded gains, climbing 0.96 percent. Automakers also rose as the session progressed, with Hyundai Motor adding 1.29 percent. Brokerages and manufacturing names, however, traded lower on the day. Down Under, the S&P/ASX 200 slipped 0.23 percent as the energy, utilities and telecommunications sectors led losses on the broader index. The heavily-weighted financials sector declined 0.27 percent. Rio Tinto shares declined 0.42 percent, paring earlier gains made after it reported fourth-quarter production figures. The company said 2017 iron ore shipments rose 1 percent and were in line with guidance. Fourth-quarter iron ore shipments rose 3 percent compared to the same period one year ago. The Hang Seng Index bounced 1.09 percent after ending a 14-day winning streak in the last session. Index heavyweights Tencent and HSBC were up 2.4 percent and 0.3 percent, respectively, as financials, casinos and energy-related plays notched gains. On the mainland, the Shanghai composite edged up 0.41 percent and the Shenzhen composite rose 0.683 percent. Despite the broader move higher, airline stocks suffered steep losses in the morning, with Air China falling 3.73 percent and China Eastern Airlines losing 3.39 percent.
FX Market: The Bloomberg Dollar Spot Index rose 0.1%, the first advance in a week. The Japanese yen sank 0.3% to 110.91 per dollar, the first retreat in more than a week and the biggest dip in almost four weeks. The euro gained less than 0.05% to $1.2266, hitting the strongest in more than three years with its fifth consecutive advance. Hedge funds and other speculative investors have amassed the heaviest long positions on the euro ever, according to the latest CFTC data. The Group-of-10’s best currency in 2017 is getting fresh momentum from the prospect of a September end to European Central Bank stimulus and an upswing in growth. Although the pound has enjoyed extraordinary growth in recent weeks and almost complete recovery from Brexit decision, JP is of the opinion that the outlook for the island is negative. According to the bank, weak economic data from the UK will put pressure on the pound. Currently, GBP receives support from Bank Of England, as the institution responds quickly to rising inflation with a sharp change in monetary policy and raising the base rate. JP's opinion among other Wall Street leaders differs dramatically, as most banks believe GBP will continue to climb even at the beginning of the year. For comparison, the average Q1 end estimate is at a price of 1,3300 GBP/USD, and the expectations of J.P. are priced at 1.3000.
Commodity market: WTI crude increased 0.4% to $64.56 a barrel, hitting the highest in more than two years as Brent crude declined 0.3% to $70.05 a barrel. Gold gained 0.1% to $1,341.29 an ounce, reaching the highest in more than four months on its fifth consecutive advance. Palladium outperformed the 33 other major commodities tracked by Bloomberg last year, and it’s blasted out of the gate in 2018. In the spot market, the metal climbed as much as 3.9 percent to $1,128.68 an ounce Friday -- surpassing the record set 17 years earlier. Used to curb pollution from gasoline-fueled engines, Palladium has been spurred on by persistent supply concerns: Inventories in warehouses tracked by the New York Mercantile Exchange have remained unchanged this month, after capping a fourth straight annual decline.
European stock market: Positive moods in the late hours will also be brought to Europe, where major stock indices will begin the profitable session. The German DAX will start 25 points higher at a price of 13,220. The French CAC has a 9-point gain to 5,514; while the FTSE 100 is 11 points up at about 7.782. Today we expect CPI data in Germany and the UK. They will show the movement of monthly inflation in countries and may predetermine the index trend during the session. The news that Chancellor Angela Merkel and Martin Schulz reached a deal Friday on a coalition government also favored DAX, expecting it to trade today with gains.
U.S. 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:
09:00 Europe - German CPI
11:30 UK - CPI
15:30 USA - NY Empire State Manufacturing Index
22:30 USA - API Weekly Crude Oil Stock
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