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- Varchev Finance: Trading day in one post 23.11.2017
Varchev Finance: Trading day in one post 23.11.2017
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Loading...Asian Stock Market: Asian markets were mostly subdued on Thursday, taking the lead from a quiet overnight session on Wall Street as investors parsed through minutes from the U.S. central bank. Down Under, the S&P/ASX 200 shed 0.13 percent. The energy and materials sub-indexes led gains in the broader market after commodity prices strengthened overnight. Those gains, however, were offset by losses in the utilities and consumer discretionary sub-indexes. South Korea's benchmark Kospi index edged down 0.05 percent after markets opened an hour later on Thursday due to a nationwide university entrance exam. Blue-chip tech plays slipped, but several prominent manufacturing names climbed: Samsung Electronics fell 1.11 percent and Posco rose 1.76 percent. Cosmetics companies also made gains, with Amorepacific tacking on 1.46 percent. Greater China markets were mixed, with Hong Kong's Hang Seng Index rising 0.07 percent ahead of the lunch break. The index had closed above the 30,000 mark for the first time in a decade on Wednesday. Mainland markets were more downbeat. The Shanghai Composite slipped 0.86 percent and the Shenzhen Composite lost 1.69 percent. Elsewhere, Japanese markets were closed for a public holiday. U.S. markets will also be closed for Thanksgiving Day on Thursday.
Currency Market: Britain slashed its official projections for economic growth Wednesday and anticipates it will need to borrow sharply over the coming years. Finance Minister Philip Hammond delivered the U.K. government's official Autumn Budget at a time when the ruling Conservative party is facing challenging political and economic circumstances. The non-partisan Office for Budget Responsibility (OBR) forecast Britain's gross domestic product (GDP) would grow by 1.5 percent in 2017 before slipping gradually to 1.3 percent over the next three years. The U.K. had been forecast to grow by 2 percent in 2017. Sterling dipped to a session low of 1.3213 against the dollar on the news. Today, investors expect the island's GDP data, with better-than-expected figures having a short-term positive effect on the local currency. However, it is important to note that the analysts' forecasts are for strong GDP by the end of this year, which is already partly accumulating in the price of the sterling. From now on, its price will reflect the lower expectation of economic growth, as well as Brexit's influence on trade and consumer spending in the country. This will have a negative effect on GBP over a medium-term time horizon. The dollar edged down against a basket of six currencies to trade near its lowest levels since October. The dollar index stood at 93.200 at 12:04 p.m. HK/SIN after falling as low as 93.160 earlier. The FOMC Meeting Minutes were released earlier. Federal Reserve officials expressed largely optimistic views of economic growth at their most recent meeting but also started to worry that financial market prices are getting out of hand and posing a danger to the economy. Minutes from the Oct. 31-Nov. 1 Federal Open Market Committee meeting indicate members with almost universally positive views on growth — the labor market, consumer spending and manufacturing all were showing solid gains. While there were disagreements on the pace of inflation, and even a discussion about changing the Fed's approach to price stability, the sentiment otherwise was largely positive. But on inflation, the consensus was weaker, with some members disagreeing with the notion that all the softness was due to issues that would fade. The fact that inflation is still lagging behind the central bank's target of 2% worries investors as it can play a key role in the decision on the future of interest rates. Chances for a new rise in December remain over 90%, which would be positive for the dollar, but most of this positivism is already reflected in its price. The Fed commented that with such a backward inflation, it would not be easy to raise interest rates again next year. They will need solid evidence that it is approaching the target of 2%, and that it accelerates its pace before they can make a new promotion. These news items immediately affected the greenback, with the negative sentiment expected to be maintained by the end of the week.
Commodity market: WTI fell 0.2% to $57.90 a barrel, trading near its highes since mid-2015, as U.S. crude stockpiles declined. OPEC's meeting next week could be a volatile one for the energy market, as the cartel seeks to extend its agreement to limit oil production against rising U.S. output. OPEC is expected to extend its deal with Russia and other oil producers to keep 1.8 million barrels a day off the market, but what's not clear is for how long. Analysts say the market is positioning for a nine-month extension from the deal's current expiration in March. So far the agreement has been seen as a factor in stabilizing the oil market, and it has helped boost prices to a two-year high. But heading into the Nov. 30 meeting, Russia's oil companies have been complaining loudly because higher crude prices have helped the U.S. shale industry ramp up production and nibble away at global market share. Analysts expect the U.S. to add about another million barrels per day of production next year. In the past week, the U.S. produced 9.7 million barrels a day, 1 million barrels more than last year. The U.S. exported 1.5 million barrels a day.
European Stock Market: European markets are expected to open with mixed moods. The German DAX will start with a 5-point rise to 12,981. Today, investors will track GDP figures in the country as well as PMI production. As a country highly oriented in production, these news can have a volatile character and determine the movement of the index by the end of the week. Gross Domestic Product will show how fast the world's 4th largest economy is developing. Lower values may have a negative effect on DAX. The political turmoil in Germany can also have a negative effect on the markets. Angela Merkel's failure to form a coalition questioned her future as a country leader, and this uncertainty bothers investors. It is still unclear whether parliamentary elections will be held, so market participants will remain cautious, as each rumor on the subject may play an important role in the movement of the index and shares. UKX is expected to open 14 points in negative territory. Britain slashed its official projections for economic growth Wednesday and anticipates it will need to borrow sharply over the coming years. Finance Minister Philip Hammond delivered the U.K. government's official Autumn Budget at a time when the ruling Conservative party is facing challenging political and economic circumstances.
The non-partisan Office for Budget Responsibility (OBR) forecast Britain's gross domestic product (GDP) would grow by 1.5 percent in 2017 before slipping gradually to 1.3 percent over the next three years. The U.K. had been forecast to grow by 2 percent in 2017. On Tuesday, figures from the Office of National Statistics (ONS) showed Britain's deficit rose to £8 billion last month — a rise of nearly 7 percent when compared to the same period a year earlier. Analysts had anticipated a figure of around £7 billion. The widening budget deficit, which is the gap between government spending and tax receipts, pointed to a weaker picture than previously thought for the U.K.'s public finances. Hammond has pledged to achieve a budget deficit of less than 2 percent of GDP, from 2.6 percent for 2016/17, by 2020 with the goal of eliminating the deficit by the mid-2020s. Before the Brexit vote in 2016, the U.K. had been hoping to post a budget surplus by the end of this decade.
U.S. Stock Market: The Nasdaq composite eked out a record close on Wednesday, led by gains in Amazon. The tech-heavy index closed 0.1 percent higher at 6,867.36 as Amazon gained more than 1 percent. Amazon shares rose after CNBC reported the company's cloud business is about to announce a huge health-care deal with Cerner, one of the largest health technology companies in the world. The Nasdaq has now posted record closes in back-to-back sessions; it also hit an intraday high on Wednesday. The S&P 500 and Dow Jones industrial average, meanwhile, finished lower after Federal Reserve expresses concern about the impact of the market's sharp rise on the economy in a summary of its previous meeting. The Dow declined 64.65 points to close at 23,526.18, with DowDuPont declining 0.9 percent to lead decliners. The S&P 500 fell 0.1 percent to 2,597.08, with financials and real estate as the worst-performing sectors. HP Enterprise was the worst-performing stock in the index.
Economic calendar for the European and U.S. stock market:
09:00 Europe - German GDP
10:30 Europe - German Manufacturing PMI
10:35 Europe - ECB's Praet Speaks
11:00 Europe - Manufacturing PMI
11:30 UK - Gross Domestic Product
14:30 Europe - ECB Publishes Account of Monetary Policy Meeting
15:30 Canada - Core Retail Sales
20:15 Europe - ECB's Coeure Speaks
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