- Home
- >
- Daily Accents
- >
- Varchev Finance: Trading day in one post – 22.02.2018
Varchev Finance: Trading day in one post - 22.02.2018
Rating:
Loading...Asian stock market: Asia markets were mixed in morning trade on Thursday, after a lower finish in U.S. stocks following the release of the latest Federal Reserve minutes. Australia's ASX 200 opened higher but retraced gains to trade down 0.21 percent. The heavily weighted financial subindex traded down 0.16 percent, while the energy sector was down 1.19 percent and materials gained 0.21 percent. Major banking stocks in the country were lower, with Commonwealth Bank shares down 0.24 percent, Westpac lower by 0.46 percent and the National Australia Bank losing 0.14 percent. ANZ shares were down 0.25 percent. Japan's Nikkei 225 was down 1.4 percent while the Topix index was lower by 1.18 percent. In South Korea, the Kospi slipped 0.56 percent. Chinese mainland markets returned to trade after being shut for the Lunar New Year holidays. The Shanghai composite rose 1.31 percent in early trade while the Shenzhen composite added 0.84 percent. Elsewhere, Hong Kong's Hang Seng index was down 1.48 percent and Taiwan's Taiex fell 0.82 percent.
FX Market: The Bloomberg Dollar Spot index was little changed. The yen jumped 0.4% to 107.40 per dollar. The euro was little changed at $1.2274. The Aussie extended overnight losses to 78.06 U.S. cents. The US dollar decided there wasn't so much to worry about in the FOMC Minutes after all. The kneejerk higher across the board has now been completely erased. EUR/USD jumped to a session high of 1.2360 from 1.2315 but now it has retraced. It's a similar story in other pairs with the dollar falling and then recovering around 40 pips. There really wasn't much to be surprised or excited about in the Minutes. One driver right now is bonds. Treasuries are selling off and it's pushing yields close to fresh cycle highs. That's helped to spark USD buying and has stocks worried after the initial surge. The odds are stacking up against sterling. Long positioning pound is crowded, sitting near its highest level in five years, based on Citigroup's GBP pain index. News that Theresa May is under pressure from her own party to take a harder approach to Brexit negotiations signal more volatility. And if that wasn't enough, U.K. domestic data continue to disappoint.The squeeze on households is plain to see in tepid retail sales figures, which have averaged about 1.9% since real wage contraction began about a year ago, compared with 4.7% in the preceding year. That's a huge deterioration as household spending power diminishes. In that period of buoyant retail sales growth, inflation adjusted earnings averaged +1.6%. Even if the BOE is right and nominal wages do start to pick up, it'll take a long time before consumers feel as rich as they did before (and just after) the Brexit referendum. This will probably keep a lid on MPC rate hikes, and will cap GBP upside.
Commodities market: WTI crude lost 1% to $61.05 a barrel. A measure of 30-day volatility in gold futures climbed this week to the highest in more than a year as swings in the dollar, higher bond yields and speculation about the pace of U.S. interest-rate hikes rattle investors. Bullion plunged Tuesday by the most since July after posting the biggest weekly gain since 2016 on Friday. “Unless we have a clear view -- if we are going to get three or four interest rate hikes this year -- investors are going to remain nervous,” said Naeem Aslam, chief market analyst at TF Global Markets in London.
European stock market: Uncertainty in markets will shift over to Europe today. The German DAX will start with a 14-point loss at around 12,395; The French CAC recorded 6 points loss at 5,268; while the FTSE 100 has a 24-point loss. Traders will be interested in tracking Gross Domestic Product data in the UK as it will give fresh indications of how the economy is performing at the threshold of Brexit. The data will also shed more light on the question of when and what is the BoE's plan for interest rate hikes.
U.S. stock market: Stocks closed lower on Wednesday, erasing sharp gains, after interest rates reached fresh multiyear highs following the release of the latest Federal Reserve minutes. The Dow Jones industrial average closed 167 points lower after rising 303.24 points. The S&P 500 fell 0.6 percent, with real estate sliding nearly 2 percent. The Nasdaq composite closed 0.2 percent lower. The S&P 500 and Nasdaq had risen more than 1 percent each. "The made it clear that you're going to see more rate hikes," said Quincy Krosby, chief market strategist at Prudential Financial. "The question for the market now is how many." The minutes from the Fed's January meeting showed officials see increased economic growth and an uptick in inflation as justification to continue to raise interest rates gradually. The central bank said it believes inflation can reach its 2 percent target, but does not think inflation is getting out of hand.
Economic calendar for the European and U.S. trading sessions:
11:00 Germany - Business Climate
11:30 UK - Gross Domestic Product
14:30 Europe - ECB Monetary Policy Meeting Account
15:30 USA - Initial Jobless Claims
15:30 Canada - Retail Sales
17:00 USA - Fed's Dudley Speaks
18:00 USA - Kansas Fed Manufacturing Activity
22:30 USA - FOMC Member Bostic Speaks
Varchev Traders Read more:
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
