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- Varchev Finance: Trading day in one post 19.01.2018
Varchev Finance: Trading day in one post 19.01.2018
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Loading...Asian Stock Market: Overall, Asian markets reported a rise in the trade on the last day of the week. The Japanese Nikkei added 0.03% to its value due to the weak yen. The financial and automotive sectors have the highest increases in the index. Korean Kospi rose by 0.04%. Australian ASX declined 0.16%, with major mining companies Rio Tinto and BHP Billiton losing 0.69% and 0.15% of their value. China's markets picked up. Hang Seng is 0.11% up, Shanghai composite with 0.36%, and Shenzhen composite by 0.1%.
FX market: USD remains under pressure. The US currency can not keep up the momentum and consistently reports declines against competing currencies. EUR/USD is trading again above the psychological level of 1.22. The dollar index is still on hold above level 90, which is to some extent positive. If it goes below this limit, it can be said that the USD has entered the bear market. Although the FED gives indications of a minimum of 3 interest rises in 2018, investors prefer to stay away from the USD. For the moment, we remain negative to USD. CAD: BoC was the first developed country's central bank to raise interest rates in 2018. For now, the Canadian dollar is losing momentum, but we expect it to change soon. The economy of the country remains strong and develops at a good pace. The bank's latest report mentioned that it is possible to see further interest rate hikes by the end of 2018 if the economy is going well. The high oil price also strongly supports Canadian shale oil producers, which make a significant contribution to the country's GDP. We remain positive towards CAD. EUR: is among the strongest currencies on the market. Traders are still trading expectations for QE suspension in 2018, or at least a significant decline. For the time being, no interest rate change is expected. We will be following the next ECB meeting and Mario Draghi's statements on how the future policy of the central bank will be. As far as EUR is concerned, we will stick to the saying "buy the dip" (for the moment).
Commodities market: GOLD is still trading close to its peak in August 2018. The rise in precious metal is mainly due to the weak dollar and that inflation in the US has no upward momentum. If gold breaks over its peak from 2017. we can expect a rising impulse as the next resistance is the peak of 2016, which is the key level of 1375$. OIL: reported a decline during the Asian session. Brent dropped 0.8% to 68.78$ a barrel, while WTI was down 0.9% in red at 64.89$ a barrel. The reason for the fall in the price of black gold is the increasing US production. At a price above 60$ a barrel, shale makers are making a big profit, so the market is oversupplied. We have to bear in mind that crude oil production in China for 2017 has fallen by 4%. As China is the largest consumer of oil, this decline will most likely act as a catalyst for OIL's prices and we will see an increase.
European stock market: European indices will open in red territory in Friday. The German DAX will start trading with 25 points down, the French CAC with 13 points decline and the UKX UK with 20 points down. Correction of indices in Europe can be considered as a profit taking and should not bother us. There is still not enough strong catalyst to reverse the index trend or cause serious correction. We remain positive towards European benchmarks.
American Stock Market: With the US indices, the picture is similar to the European ones. After the incredible rises and new highs that registered almost every day is the time for a short break. There are two factors that are guiding US economy now. The first is the fiscal statements for the last quarter of 2017. Another major event is the danger of a government "shut down" if the Senate does not approve the Funding Bill. The deadline for the Senate's decision is in the small hours of Saturday.
Economic calendar for the European and American trade sessions 19.01.2018
9:00 Germany - PPI
10:15 Switzerland - Export and import prices
11:00 EU - Current account
11:30 UK - Retail sales
15:30 Canada - Canadian investment in foreign securities
17:00 USA - Michigan consumer sentiment
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