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- Varchev Finance: Trading day in one post – 27.07.2018
Varchev Finance: Trading day in one post - 27.07.2018
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Loading...Asian stock market: Asian shares were mixed on Friday, with Australia climbing while other major markets in the region turned in more tepid performances. The Nikkei 225 inched higher by 0.06 percent. The benchmark's advance was capped as the securities brokerages sector dropped 2.74 percent, with Nomura falling 5.92 percent after it reported net profit in the quarter ending in June fell to 5.2 billion yen ($46.8 million), compared to 56.9 billion yen one year ago. Elsewhere, South Korea's Kospi hovered around the flat line, and was last marginally lower by 0.01 percent. In Australia, the S&P/ASX 200 recorded convincing gains of 0.89 percent in morning trade, with the index led higher by the information technology subindex. Markets in China traded lower, with the Shanghai Composite shedding 0.48 percent and the Shenzhen Composite pulling back by 0.72 percent. In Hong Kong, the Hang Seng Index eased 0.6 percent, with the declines led by a drop in materials.
FX market: After Donald Trump's comments that he did not agree with the fast-rising interest rate USD was a sound slap on the part of the investors. And, at the moment, traders are still reassessing the Fed's monetary policy, and if we judge the market behavior, vendors definitely take precedence. If until a few days ago investors were on track to accumulate interest rises by another 150 bps by 2020, they currently only accumulate 75, leading to a USD decline. The Technical Dollar Index is at a key level of resistance that failed to fall over the past two months. After forming a double peak, the short-lived ascending channel was drilled, then successfully tested in the previous two weeks. Price Action, which the price registers today, is indicative of moods among traders, and we can conclude that the resistance zone remains significant with a high probability of a turnaround to a downward trend. In addition, the Fibonacci 50% correction of the main downward trend, as well as DeMarker, is pointing downwards from a surplus zone. I expect the depreciation of the greenback to remain the same next week. Comments from the Fed or Trump on the issue of monetary policy will lead to high volatility and sharp movements in the dollar.
Commodities market: The loss of Iranian crude to the market – amid U.S. sanctions on the Islamic Republic, which get underway in November – is seen by many as the biggest risk to global supplies. Analysts have estimated up to 1 million barrels a day of Iranian crude could be wiped of the market. U.S. President Donald Trump in May said the United States would leave the 2015 Iran nuclear agreement, paving the way for sanctions to resume. Iran’s leader warned over the weekend that it might shut the Strait of Hormuz, the world’s most important seaborne transit lane for oil. In addition, oil prices get fresh boost after data from the American Petroleum Institute (API) reported U.S. crude inventories fell more than expected last week. U.S. crude stockpiles fell 3.2 million barrels in the week to July 20, the API said on Tuesday, compared with expectations for a decrease of 2.3 million barrels. However, graph shows that for now the bears prevails, which means that the markets doesn't judge the
price, so critical.
European stock market:European stocks grew after the US and the European Union reached unanimity over the termination of some tariffs. The Stoxx Europe 600 index added 0.3%, with miners and car makers leading to an increase. Royal Dutch Shell dropped 1.2 percent after second-quarter earnings forecasts slipped. President Trump and European Commission President Juncker have agreed to end the new tariffs while negotiating for lower limits on transatlantic trade. Investors will also focus on European bank stocks, as the ECB can provide more clarity about the timing of the first interest rate increase next year.
U.S. stock market: While the headlines on the internet, television and the cult Wall Street newspapers are obsessed with the obsession with the trade war, the SP500 seems live in a parallel universe. If we compare the fall in the index with the last 4 market retracements of about 10%, this year's "crash" is nothing different from the previous ones. This, along with relatively good financial statements, puts the index on its way to a new peak in the early days of August. Is it reasonable to think that this will happen? Most likely, yes. SP500's annual return reflects changes in the US ISM Production Index. Given that the commercial tariffs have not yet significantly affected economic data, it is quite normal to think that a new peak in August is entirely probable.
Economic calendar for the European and U.S. trading sessions:
09:00 UK - Nationwide HPI
09:00 Germany - Import Price Index
15:30 USA - Gross Domestic Product
17:00 USA - Michigan Consumer Sentiment
18:00 Canada - Budget Balance
20:00 USA - Baker Hughes Oil Rig Count
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