Varchev Finance: Trading day in one post 22.01.2018

Asian stock market: Most Asian markets traded lower on Monday as investors kept an eye on political developments in the U.S. after a government shutdown began last week. Japan's Nikkei 225 edged down 0.18 percent in afternoon trade. Automakers were mixed: Toyota declined 0.68 percent while Mitsubishi Motors tacked on 1.97 percent. Technology stocks were also a mixed picture, with Sony edging lower by 0.04 percent and SoftBank Group advancing 0.73 percent. Meanwhile, South Korea's Kospi declined 1.14 percent as index heavyweight Samsung Electronics fell 2.68 percent. Other technology stocks were mixed, with chipmaker SK Hynix declining 3.55 percent and LG Display gaining 0.99 percent. Down Under, the S&P/ASX 200 gave up gains seen earlier in the session to trade lower by 0.16 percent. The heavily-weighted financials sector declined 0.65 percent, weighing on the broader index. Shares of Commonwealth Bank sank 1.2 percent, underperforming most other banking names. Greater China markets were mixed. Hong Kong's Hang Seng Index was off by 0.04 percent, but casino stocks traded in positive territory — with Wynn Macau higher by 2.62 percent. The technology and financials sectors were mixed in the early going, meanwhile, with Tencent higher by 0.53 percent and HSBC softer by 0.47 percent. On the mainland, the Shanghai composite added 0.22 percent and the Shenzhen composite gained 0.93 percent. The blue chip CSI 300 index was higher by 0.75 percent.

FX Market: EUR was steady at $1.2218. The Bloomberg Dollar Spot Index was little changed. The yen was little changed at 110.79 per dollar. The pound was flat at $1.3869. Markets are getting more optimistic about GBP. The pound has climbed toward $1.40 this year and traders are positioning for further gains, options markets show. Demand for calls betting on a rise in sterling has overtaken that for puts for the first time since 2009. For the optimism to last, investors will expect to see more progress in Brexit talks in coming months.

Commodity market: WTI rose 0.3% to $63.58 a barrel. OPEC have agreed to continue the restrictions on the extraction of the raw material. The meeting was held in Oman earlier today, which discussed the introduced quotas and the situation on the oil markets. Gold was little changed at $1,331.07 an ounce. After the talks, the sentiment is that the limitations will continue, Saudi Arabian Energy Minister Khalid al-Falih reports. And if market imbalances persist, OPEC + may extend the agreement in 2019, he said. Formally, the talks on quotas and the possibility of extending for another year will be held in November 2018. Russian Energy Minister Alexander Novak commented before the meeting that he expected a balanced market in 2018. When this happens, "time will show," he said.

European stock market: The political uncertainty will cast a shadow over the European markets today. German DAX will open 2 points higher, French CAC 5 points lower and FTSE 100 is virtually unchanged. After a light economic calendar for Monday, the rest of the week may hide a few surprises for investors. In the UK, market players will focus on the first estimate of British fourth-quarter GDP for further hints on the health of the economy and the likelihood of the Bank of England raising interest rates this year. The European Central Bank is widely expected to keep interest rates at their current record low levels when it holds its first policy meeting of the year at 1245GMT (7:45AM ET) on Thursday. President Mario Draghi will hold what will be a closely-watched press conference 45 minutes after the rate announcement. The main focus will be whether the ECB thinks the euro zone recovery is now so strong that it can end its €2.5 trillion stimulus program in one fell swoop in September, as some in its ranks have been suggesting recently.

U.S. stock market: Dow Jones industrial average futures declined 33 points and briefly fell as much as 101 points. S&P 500 and Nasdaq 100 futures dropped 2 points and 8 points, respectively. The U.S. government shut down Saturday after a bill that would've kept government funded through Feb. 16 was voted down in the Senate. The shutdown will continue for a third day after the Senate on Sunday failed to reach an agreement to break an impasse before the work week began in Washington. The White House was quick to blame Democrats once the shutdown started. In a statement, White House press secretary Sarah Sanders said: "This is the behavior of obstructionist losers, not legislators." On Sunday, however, Republican lawmakers were getting behind a plan that would keep the government funded through Feb. 8. Meanwhile, some Democrats are preparing to give immigration concessions to the GOP. Some of those concessions include President Donald Trump's proposed wall along the U.S.-Mexican border. A point of contention between Republicans and Democrats is an immigration bill which Democrats want to pass. This is the first U.S. government shutdown since 2013. That year, the government was shut down for 16 days. Concerns about a shutdown kept investors on edge last week. On Tuesday, the Dow gave up a 283-point gain, while the S&P 500 and Nasdaq also closed lower in that session. The Cboe Volatility index (VIX), widely considered the best fear gauge on Wall Street, finished the week nearly 11 percent higher. Historically, the Vix averages a return of 9.7 percent one week after a government shutdown, while the S&P 500 slips 0.3 percent in that time period.

Economic calendar for the European and U.S. trading sessions:
15:30 USA - Chicago Fed National Activity Index
15:30 Canada - Wholesale Sales
18:30 USA - 3-Month Bill Auction
18:30 USA - 6-Month Bill Auction

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