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- Varchev Finance: Trading day in one post 25.01.2018
Varchev Finance: Trading day in one post 25.01.2018
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Loading...Asian Stock Market: Asian indices are trading with declines on Thursday. Japan's Nikkei has a 1.14% drop, mainly due to the strong yen. All major sectors in the country - financial, technology, manufacturing, consumer - are slumping. Australian ASX is also in red territory with 0.08% China's markets also reported a decline. Hang Seng is trading with a 0.31% drop, Shanghai composite and Shenzhen composite reported 0.14% and 0.01% losses.
FX Market: USD continues to weaken against its competitors. The weakness of the US currency is maintained despite the fact that the Fed is preparing to raise the interest rate in 2018 at least 3 times, although economic data is better than expected and despite the stability of the US economy. The technical analysis is also not on the USD corner. The dollar index, whose strength is more than 50% of the EUR/USD ratio, went below the psychological level of 90, indicating that the US dollar slump may have just begun. We remain strongly negatively toward the dollar and will use any correction to enter on new short positions against the US currency. EUR: On the other side of the currency palette is the euro. The common currency enjoys investor confidence and keeps growing against other currencies. Today we expect the ECB's decision on the change in the interest rate. Expectations are that there will be no change in the rate. A little later, during the European session, we will be watching the statement of the ECB President, Mario Draghi, who will give guidance on when and what will be the change in QE. We expect Draghi to try to calm the rapid rise of EUR, but not to knock it off. If there is a more significant correction, the market will probably use it for new long positions in EUR. NZD: Decreased seriously during the Asian session. Inflation data in the country went well below expectations, resulting in a sharp decline in the NZD, which continued throughout the session. From a fundamental point of view, NZD remains stable. The economy of New Zealand and the strength of their currency is strongly related to the economy of China. And now, China's economy, if anything, keeps its pace of growth. We remain positive towards the NZD.
Commodities market: GOLD: passed over it's top made on 08.09.2017. We expect the upward momentum of precious metal to persist. The main reason for the appreciation of gold is not political uncertainty or global turbulence, when it is used as a hedging instrument, but rather the weakness of USD and low inflation in the United States. We remain positively toward GOLD. OIL: The upward momentum continues. The price of Brent reached $71.05 a barrel, levels that the market has not seen since December 2014. WTI also posted an increase of 1% and traded at about $66.26 a barrel. Both crude oil benchmarks have risen by about 60 percent since mid-2017. The background around black gold remains positive, as we do not expect OPEC to change its agreement by the end of 2018.
European stock market: European indices will open with decline. The German DAX will start the session by about 3 points down on the price of 13419 euros, the French CAC with a 6 point decrease at the price of 5491 euros, the UKX with 10 points lowering the price of 7636 gbp. European indices closed down the session on Wednesday, and maybe this correction was awaiting investors before firing the benchmarks to new peaks. There may be caution in the market, considering Mario Draghi's statement later today.
American Stock Market: Obviously, we can't have a new historical peak every day. Although a fairly short correction of the US indices took place. But we should not worry, market corrections are a normal and healthy. We have no change in the fundamentals of US indices, which leads us to think that the correction will soon be erased and the market will again fly to the top. We remain positive towards the US indices.
Economic calendar for the European and American trade sessions 25.01.2018
11:00 Germany - Ifo business climate
11:30 UK - BBA Mortgage approvals
14:45 EU - Interest rate decision
15:30 USA - Initial jobless claims
15:30 USA - Trade balance
15:30 EU - ECB Monetary policy statement
15:30 Canada - Retail sales
17:00 USA - New home sales
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