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Market Evolution - A Daily Summary of the Financial Markets

June 21, 2017

Asian markets rush with oil declines, at the same time MSCI says YES to China.

Asian markets have been bearish in Wednesday’s session, following the MSCI Emerging Markets Index’s affirmative response to gradually include most of the Chinese stocks in that index after several failed attempts.

The Agency indicated that it will include 222 companies with high market capitalization from next year.

The US dollar made a pullback, from the highs of the last month, against a basket of major currencies. The Dollar Index stood at 97,699 which is 0.05 lower than the previous figure. Oil prices down have had their weight. At the same time, the pound has suffered a sharp fall after the speech of Carney who said that there will be no interest rate hikes at the moment.

Gold has risen in the Asian session on Wednesday after touching the last five weeks’ lows in the previous session. It has been influenced by the declines in the American markets, by the fall of the dollar and by the fall of the oil.

Crude has had problems during the Asian session, standing at lows of the last months. Investors do not give much credit to the OPEC and non-OPEC countries’ agreements on production cuts.

European markets are expected to open the session on Wednesday lower.

THE PROBLEM OF INFLATION

There is no confidence that the price of oil will stabilize. There is also no confidence in the producers, so that they can agree to increase the price.

The increase in the price of oil would, in general, help inflation rise.

Reducing the above, several voices within the Federal Reserve say that inflation is not responding as it should. That is why there is no hurry to raise interest rates. However, other voices say that there are serious risks if interest rates remain very low.

We continue in a cycle of interest rate rises, but there is no reason to accelerate them too much. With this, the scenario of margin increases for the banking sector is further removed.

Here is an important correlation: At the same time as the price of crude falls, inflation decreases and the financial sector is also under pressure.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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June 22, 2017

Asian markets have been moderately bullish in Thursday’s session, while oil has been struggling between rises and falls.

Asian markets have been mixed on Thursday, after slight rises in oil prices after reaching ten-month lows overnight.

According to Vandana Hari of Vanda Insights, the situation of panic gave way to another one of paranoia. This is due to technical sales in the oil that explain why prices didn’t went up after the decline in US inventories.

With oil prices below $ 45 a barrel, OPEC will be forced to further deepen production cuts. The OPEC leader, Saudi Arabia, is preparing for the IPO of Saudi Aramco for the next year and will not be able to accept prices below $ 50.

The price of gold rises again for the second consecutive day, supported by a weak dollar and by declines in US Treasury bonds. Gold is very sensitive to changes in interest rates and the evolution of bonds.

The bond curve has flattened near the lows of the last ten years as investors assess the Fed’s somewhat more aggressive position as inflation weakens.

European markets are expected to open mixed session Thursday.


POINT IN FAVOR OF THE CHINESE MARKET

They finally get into the MSCI of emerging markets. The Chinese rulers had been longing for it to come. It represents a greater international projection, not only of the country but also of its economy.

To achieve this they have had to liberalize and accept the access of foreign money to their markets.

Now, the MSCI includes no less than 222 Type A shares in its index, meaning that China will be 0.7% of that index. It will arrive in June next year.

Everyone rubs their hands because that means that the passive management funds, which follow that index, must buy a proportionate share of those Chinese stocks in order to replicate it. It means a really important international money injection.

We are talking about huge amounts of money, because there is nothing less than $1.6 brillion following this index. Some of that money will go directly into the shares of these companies. It’s like making a kind quantitative program to the beast with foreign money.

We talked about a possible inflow of money over the next few years. Let no one expect exceptional movements in 24 hours.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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June 23, 2017

Asian markets have been flat as oil recovers from lows; The Chinese financial sector is immersed in an inspection process opened by the regulator.

Asian markets have been mixed during Friday’s session. They have been influenced by the process opened by the banking regulator of that country. It is mainly investigating questions for banks related to loans for overseas and asset purchases. At the same time the advance of oil has had its weight.

Oil has rebounded during the Asian session on Friday. It does it from the lows it had at the beginning of the week. However, it is at the worst level in the last two decades, despite OPEC-led production cuts.

The dollar did not change much during the Asian session on Friday, waiting for the inflation data that will appear during the next week. Some major currencies, related to commodities such as the Canadian dollar have seen strong following a bounce in crude oil prices.

The Dollar Index did not suffer much variation, remaining at 97,547.

Gold has been steady during the Asian session on Friday, above the five-week low reached this week. It has been supported by technical aspects and has maintained its downward trend of the last three weeks.

European markets are expected to open the session on Friday lower.


RISK AVERSION

Oil has unleashed, with its downfall, a new wave of risk aversion. All indicators that measure this factor are moderately activated. They are the yen, the bonds and the gold fundamentally.

In essence, the current problem is that OPEC has lost control and influence over oil. Everyone begins to see that the United States and non-OPEC countries have as much weight as the others.

In fact, OPEC loses market share each day. If oil stabilizes at low levels inflation will not rise. With this, the approach that had central banks is collapsed. The financial sector is badly hurt.

Rivers of ink run on banks. Moody’s report has raised many blisters in which it makes a comparison between how the European Union has behaved with the Banco Popular, expropriation of shares, and how it is behaving with the Italian banks …

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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June 26, 2017

Asian indices are rising as oil prices rise and several markets in the region remain closed.

Asian markets were on the rise in Monday’s session as oil rebounded from the lows of the last ten months reached last week.

The beginning of the week will have few important economic data and some corporate results.

The dollar weakens against a basket of major currencies, losing traction as US bonds remain low on the expectation of seeing if the Federal Reserve will again raise rates for the remainder of the year.

The Dollar Index fell to 97,239 in Monday’s Asian session, increasing losses of 0.4% it already had on Friday.

Oil prices have been bullish during the Asian session, against a weak dollar. There is still concern about the increase in production at the global level, despite attempts by OPEC cuts.

Gold has remained unchanged pending the economic data that will come out during the course of the week. The weak dollar also supports this value.

European markets are expected to open up Monday’s session higher.

REFORMS IN THE USA

Business magnates are very concerned about Donald Trump. They doubt that he will be able to carry out his economic reforms.

ECB QANTITATIVE RELAXATION PLAN

The QE will end in math by the middle of 2018 at the latest. There are simply no more German bonds to keep the QE.

JOBS IN THE USA

Is the US unemployment really as low as they say?
90% of the jobs created since 2008 in the US are bad and part time. Many people have three or four of these junk jobs in order to survive. The real unemployment rate would be 20%.

EXPECTED GROWTH

The last thing we need to think about growth is to see the purchasing managers’ indices take a step back.
If they think about buying less in the coming months, it is because they may not see so many potential sales. Growth would not be as expected.
It is what has come out in Germany, France and the euro zone.
PMI data and new home sales below expectations. It is the lowest expansion rate of the manufacturing sector seen since September 2016.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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June 27, 2017

Asian indices have been mixed as oil prices rise. The traders will be attentive to the speeches of the central bankers.

Asian markets have been mixed in Tuesday’s session as the market awaits signs from central bankers.

The rhetoric used will be observed with interest, at the Forum on Central Banks held in Sintra, Portugal. Janet Yellen, meanwhile, will speak in London in the afternoon.

Despite the numerous speeches that will take place, it is not expected that much will be revealed about the monetary policy that will be followed by the Central Banks.

In terms of energy news, the increase in oil production and over-supply continue to worry the markets.

The dollar has yielded some ground at the end of the Asian session on Tuesday, although at the beginning it has reached peaks in the last month against the yen. Yellen’s statements will have their weight in today’s session.

On Tuesday the gold suffered a ‘fat finger’ reaching minimums of the last six weeks. It seems that it was caused by a strong sales order from the United States. The cause is not well defined, although the feeling of fear prevails in the markets because of the strong political uncertainty that exists around the world.

European markets are expected to open up Tuesday’s session.


Sales in oil

The wave of oil sales could worsen if Arabia throws in the towel, just as she did in 1985. Markets do not believe that the extent of production cuts will be enough to counter the surge in US supplies.

They do not square the accounts. Experts say that in order for the market to reach equilibrium in 2018, it would be necessary until the end of next year that not one more petroleum installation will be opened in the United States. This is a lost battle of OPEC.

Problems for technology

The Nasdaq seems damaged by news of the partial start-up of Trump’s immigration veto. As soon as the news has appeared, the Nasdaq has turned around. Serious problems for technology when it comes to recruiting talent abroad. This hurts the index indirectly.

Weak macro data

In the currency market the dollar is losing positions on many fronts. Some macroeconomic data has turned out to be worse than expected. The positive reading is that you start asking the Federal Reserve to think twice about keeping rates up. In a way it benefits the market.

Financial sector

The banking sector is improving more than 1.2%, thanks to the fact that there is already a solution for the two Italian banks in trouble. Although there is a clear difference with respect to what happened in Popular.

Banks have taken a very positive discounting rate which, in the end, will not be produced in the discounted measure because of weak inflation prospects.

Scam on the Forex Market

They ripped up nearly a million investors with promise of profits in the Forex currency market.

The Spanish Guardia Civil, in the framework of the operation ‘Watermark’, has arrested two men in Sant Cugat del Valles who convinced investors that they had developed an infallible algorithm, which they called ‘Robot’.

They promised much benefit and little risk. In addition, they were forced to open an account in Switzerland. They promised benefits of around 50% per year and minimal risk.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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June 28, 2017

Asian markets have been bearish, after the US Senate delayed voting on health care and following Draghi’s words.

Asian indices have been bearish in Wednesday’s session, after a very slight advance in the American markets that had a surprise with the delay of the vote on health care.

Senate Majority Leader Mitch McConnell said Tuesday that the vote could be delayed until July 4.

Investors also digest Mario Draghi’s statements in Sintra, where he said the ECB may be forced to adjust its monetary policy in response to changing economic conditions.

The current quantitative program is expected to last until the end of this year and operators now think that the ECB could announce in September an extension of it.

As a result of the two previous events, the euro has been greatly strengthened during Tuesday’s session reaching a high of the last ten months against the dollar, while this currency was weakened.

The price of gold has held steady during the Asian session on Wednesday. The stock market’s general declines, the weakness of the dollar and the statements of the President of the European Central Bank are the reasons for that strength.

European markets are expected to open the session on Wednesday lower.


Semestral portfolio

At the end of the quarter, and at the end of the semester, the corresponding portfolios can condition the rest of the week. There will also be strong movements in currencies and other markets.

On Monday there was much talk about the brutal discharge of gold in less than a minute. Strong hands have already begun to square their beads.

Strong euro movement

Draghi defends his monetary policy.

Draghi’s words in Portugal, speaking of reflationary pressures, have acted as a catalyst for the euro, which has skyrocketed against the dollar to two-week highs. The crossing has risen about 80 pips after the intervention of the ECB President.

Following Draghi’s comments, debt and the euro move in the same direction.

Reflation: Economic phenomenon characterized by having at the same time a strong rise in prices, inflation, and a recession. It is ‘artificial inflation’.

Criptodivisas

The ethereum drops more than 9%, amid a wave of sales in bitcoin and other crypto-currencies.
A young market, which has entered thousands of players in the last half year to increase their trading volume by almost 95%.

No one should miss the brutal volatility that plagues the crypto-currencies, which have lost nearly 21% of capitalization.

The mess with the central banks

Increasingly, hints are being heard that central banks end up using ‘helicopter money’. That is to say, to throw money from a helicopter, in the figurative sense, or to enter money in the accounts of the people of direct form.

After previous absurdities… Can you imagine? Entering money into people’s account. For a few months ago several politicians dropped it in some forums in the eurozone and in other parts of the world. Presuming as far as they could go if necessary.

The reality is that right now there is a ball of crap in the hands of the central banks. You can not go back, you have to keep kicking forward …

New cyberattack goes global

A cyberattack hit major companies including Rosneft and A.P. Moller-Maersk, while disrupting government systems in Kiev and the Chernobyl nuclear facility. More than 80 companies in Russia and Ukraine were affected by the Petya virus that disabled computers and told users to pay $300 in cryptocurrency to unlock them. WPP, the world’s largest advertising company, was hit by the attack, and employees were told to turn off their computers and instructed not to use Wi-Fi.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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June 29, 2017

Asian markets have been bullish following central bankers’ statements. The Kospi reaches the 2400 points.

Asian indices have been bullish in Thursday’s session, boosted by Wall Street’s bullish close and as investors digest statements by central bankers.

The statements by the President of the European Central Bank, Mario Draghi, in which he spoke of the readjustments that will have to be carried out, have been misinterpreted. Draghi meant that they want signs of greater tolerance towards low inflation, which does not necessarily mean an extension of the stimulus.

Despite these comments, the euro rose for the third consecutive session. On Wednesday it reached highs of the last year.

The Bank of England was also a center of attention. Mark Carney said they are debating a rise in interest rates in the coming months. This caused a strong upward movement in the pound.

Stephen Poloz, President of the Central Bank of Canada, said interest rate cuts are doing their job. The Canadian dollar rose to its highest level since February after the statements.

Oil futures have risen during Thursday’s Asian session for the sixth consecutive day. Although there is still an over-supply.

Gold remains steady, despite having suffered sharp declines in recent days by statements from central bankers in Europe and the United Kingdom. It seems that setbacks are imposed on the stimulus programs, in a coordinated way among all banks.

European markets are expected to open up Thursday’s session.


Multi-million dollar fine to Google

The highest fine in EU history to a company for abuse of dominant position and violation of antitrust laws.

Create proven that Google artificially altered the results of Google Shopping, its price comparator service, to position its products well and relegate those of the competition. Therefore imposed a penalty of 2.420 million euros and the obligation to cease these practices within 90 days.

Although 90% of its revenue comes from advertising, in 2004 Google entered the market for comparison shopping services in Europe, with a product initially called Froogle, known since 2013 as Google Shopping, a service that allows consumers search and compare prices of all types of stores.

When entering the market there were other competitors and an internal document shows that the company recognized that ‘Froogle simply is not working’. That is why from 2008 onwards he changed his strategy, according to Brussels, ‘systematically giving priority to his own service’, placing his products first, even if they were not the most beneficial to customers. And in addition, ‘delaying rivals’, adding to their algorithms new criteria.

The fine is only a small part of its annual turnover, but to that must be added the income that will cease to be perceived by the changes. Also that the Brussels decision opens the door, and almost invites, aggrieved competitors to go to court for compensation. There are already three complaints in Europe in progress.

Rebound of the pound

The pound bounces after Mark Carney opens the door to a rate hike in the coming months.
Specifically, the Canadian banker points out that the rise in interest rates will be discussed in the coming months, as the British economy is close to operating at full capacity.

Footsie 100 of London on the low after the strong rise of the pound.

Crude inventories

EIA oil reserves rise 118,000 barrels, when a decline of 2.585 million was expected. These data will be reflected in oil prices. So far the USD / CAD has dropped sharply.

Do central banks agree?

It seems that Draghi and Yellen’s statements were coordinated. They want to curb the bubbles somehow. But this is utopian.

Comments by the Bank of England, who has said that we must remove monetary stimulus, have shot the pound and weakened the dollar index.

There are already three: the ECB, the Fed and the Bank of England. The Bank of Japan is silent, because it is such a ball that they have to say something that collapses all the same as a house of cards.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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June 30, 2017

Asian markets have been bearish, despite the fact that manufacturing activity in China was better than expected. The shares of technology fell.

Asia has been bearish in Friday’s session, despite good manufacturing activity data in China. It accelerated more than expected, causing even more confusion as to whether the economy in this country will continue to weaken, as expected, or on the contrary will have a favorable evolution.

Stocks in the banking sector rose on Thursday, after the Federal Reserve accepted the reinvestment programs of big bank stocks.

Oil prices have been bullish during the Asian session on Friday, its best week since mid-May. It ends with five previous weeks of declines, crude rose supported by a drop in inventories in the United States.

The dollar is weak, near the lows of the last nine months. A more aggressive position was expected from the central banks of Europe and Canada, but now there are doubts about whether interest rates will rise for the remainder of the year.

Gold is supported by a weak dollar, the generalized declines in stock markets and the comments of central bankers in the sense that stimulus programs are going to be reduced.

European markets are expected to open the session on Friday lower.


Canadian Dollar Continues to Rise

USD / CAD slips below 1.3000, to test the 2017 lows.

The crossover is down for the fourth consecutive day, amid growing expectations of a possible rate hike from the Bank of Canada and a weak dollar.

G-20 Meeting

Merkel is committed to expanding the single market to ensure the future of the EU after Brexit.

The priority of the European Union is to shape its immediate future and strengthen its international role, whatever happens to Brexit.

European utilities, bonds and stock exchanges

Utilities is the worst sector by far. The reason is the high natural indebtedness, for the infrastructures they need.

Bad times for bonds, which are falling to plumb.

We still have a weak dollar against most currencies. Against the euro, European exporters suffer and, with them, the markets of the old Continent.

The big beneficiary will be the banking sector, provided that the standardization of the stimulus programs is moderate.

Central banks all together

The hardening of the tone of the central banks has been orchestrated and has appeared in most of the important ones.

It makes one thing clear: Finance is becoming more expensive for everyone. That means that the increase in financial spending will detract from benefits to companies, so it is logical that most sectors will be harmed.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 3, 2017

Asian markets have been bullish after better-than-expected PMI Caixin data from China.

Asia has been bullish in Monday’s session as investors digest a PMI Caixin data from China that has beaten expectations. It remains at 50.4, above the level of expansion, from the previous 49.6.

The dollar is recovering slowly, from the low of the last nine months, against a basket of the main currencies. However, it remains shaken by the central banks’ commitment to gradually reduce monetary stimulus programs.

Gold has held steady during the Asian session on Monday, ahead of the Independence Day holiday that will take place on Tuesday and the weakness of the dollar.

Oil prices rose on Monday. They were driven by the first decline in months that American oil reserves are suffering.

European markets are expected to open Monday’s session mixed.


New semester, new scenario

When there appeared to be no relevant changes, some central banks aligned themselves with the Fed, at least in the words. It remains to see if these words become facts.

The June Fed’s rate hike threatened to be a trigger for the dollar, a blow to its rivals.

University of Michigan Consumer Confidence

Final feeling 95.1, when 94.5 was expected from the preliminary of 94.5.

Better than expected the final indicator and the current situation, but worse the future expectations, probably because of the great uncertainty that introduces Trump in the forecasts
.
Although the overall indicator has been above expectations, it is the lowest since November 2016.

Flattening of the type curve

The flattening of the rate curve at the current level is not harmful to the stock market. Many wonder how dangerous the fact that rate curves are flattening is dangerous.

What is dangerous is that they are invested, but the flattening itself is not. There is a lot left for this investment at the moment.

Confused messages

The markets may have misunderstood Draghi, or they may have understood him perfectly. The fact is that it has melted the markets.

Draghi’s statements have plunged the bonds, with sales more aggressive since 2015. They have shot the euro and put the stock markets nervous. When it is not oil is that the Nasdaq corrects and when not, it is Draghi.

It has hurt much the collapse of Bayer, which has led the chemical sector to be the worst on Friday, after giving bad forecasts.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 4, 2017

Asian markets have been wary of a new missile launch by North Korea and after the RBA has not changed interest rates.

Asian markets have remained on the defensive before another missile launch by North Korea. Also after the central bank of Australia has kept unchanged, at 1.5%, interest rates as expected. The Australian dollar has fallen sharply.

North Korea has launched a new missile. Official sources say it has fallen in Japanese jurisdictional waters.

Following the news, the safe-haven yen has been appreciated violently.

Gold edged higher in Tuesday’s Asian session. However, it is at its lowest level of seven weeks, reached during the previous session in which it reported its biggest intraday fall since November.

Oil prices shrank during Tuesday’s Asian session, stopping its eight-day run of rallies on signs that production in the United States is starting to slow down.

European markets are expected to open Tuesday’s session lower.

Blackout period

There are a lot of little known factors that affect the quotes and what we should know.

One of them is surely hurting us today. It is the factor of the blackout period, related to the repurchases of own shares.

Repurchases of companies are a decisive factor in the stock market today. In many cases they have been almost the only factor that kept markets going.

Under SEC rules, companies, to avoid manipulation, can not buy their own stock in the United States for five weeks before publishing results and up to two days after they have been published.

As the results campaign is already over, many companies have suspended their purchases and this is hurting the exchanges. It is one of the hidden factors that are causing weakness.

The European Union and Japan are closer

The European Commission says that it is close to being able to reach a principle of agreement with Japan on free trade. You know, it comes out UK and you have to look for props out. Now we will see if in the Union are agree with that…

Oil installations account by Baker Hughes

Important change because we have the first reduction in many months.

Crude is up 0.4% and we have to rebound from the oversold, and from the support zone, around $ 42 a barrel.

Part of the market is expecting the increase in production to be negative for US producers.

The bearish pressure on the price of the oil would make some of the new American installations less profitable. With that, there would be another wave of closure of facilities, until a balance was struck between US production and OPEC cuts.

ISM manufacturer

ISM US manufacturing surpasses expectations and rises to highs since August 2014.

The dollar gained momentum in the market and extended the advance after it became known that the ISM manufacturing index rose much more than expected to climb to 57.8, against 55.2 of the market consensus, and higher than 54.9 last month. It is the highest reading since August 2014.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 5, 2017

Asian markets have been cautious. There is concern about increasing geopolitical tensions.

Asian markets have been pressured in Wednesday’s session as concerns grow after the latest launch of a long-range missile by North Korea.

That country said the missile, which landed in jurisdictional waters of Japan, was a projectile capable of carrying a heavy nuclear warhead.

South Korea and the United States have responded by increasing their military exercises in the area, which also include the launching of ballistic missiles.

The dollar has lost ground against the yen at the beginning of the Asian session, although it recovers at the end. Geopolitical tensions between the United States and North Korea and statements by the President of the Central Bank of Canada, which he said he supports a rise in interest rates, are having a lot of weight.

Gold has risen in Asia on Wednesday as demand for safe-haven rises due to geopolitical uncertainty. The minutes of the last meeting of the Federal Reserve, which will appear at the end of the day, will influence the evolution of the precious metal.

European markets are expected to open mixed Wednesday session.

Actions of the Chinese Government

Every movement of the Chinese government is followed with dread by the investors. To try to reassure, the Central Bank speaks of its monetary policy going to be calm and predictable.

They will use various tools at their disposal to maintain stable liquidity and to seek reasonable growth, both in social financing and in credit.

With respect to their currency, they say that they are going to keep it stable. They will not allow it to increase in value, which would harm their exports.

Consumer Credit Risks

The Bank of England is beginning to demand tests from consumer credit generators. They ask that they be properly protected against losses due to delinquency.

In general, they are given until September to demonstrate that they are adequately protected against the risk of consumer credit, that is, they have realistic provisions.

Message to Trump

The European Union and Japan will announce a free trade agreement on the eve of the G20.

The European Union and Japan will hold a summit on Thursday to announce a political agreement that will lead them to sign a free trade pact between the two powers. It is a stark contrast to the current US policy.

Keys to the Wednesday session

Fed minutes and PMI’s battery.

The ECB has once again said that lax policy is necessary and to get the inflation target. This has helped to reduce secondary market returns.

Investors’ eyes will focus on the United States, as the Federal Reserve will publish the minutes of the June meeting.

The June Redbook Index and the New York ISM index for the same month will also be announced. We will have the data of orders to factory of the month of May and the economic optimism of the month of July.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 6, 2017

Most Asian markets lost ground despite the fact that Wall Street was strong amid oil’s wobble

Asian markets have yielded in Thursday’s session, even with a positive close in the United States. Oil prices recover somewhat, after falling about 4% at the beginning of the Asian session.

The strong demand for oil in the United States has supported. However, analysts warn that price forecasts are down because of oversupply.

The dollar has remained more or less stable following the Federal Reserve’s minutes. In them has verified how the Fed is aware of what will be the evolution of inflation to make decisions on interest rates. The market now expects statements from central bankers and economic data that will appear in the United States.

Gold has held steady during Thursday’s Asian session, after reaching a low of the last eight weeks in the previous session.

European markets are expected to open mixed session Thursday.

United States within reach of North Korea

It has been seen that the last missile of North Korea was able to climb at high altitude and that traveled almost 1000 km. Many military experts have begun to say that it is quite possible that they could achieve targets in the United States, in particular they could have shot Alaska. US calls for action against North Korea.

Although low volatility is still present, Goldman has said today that it looks like the market would need a war or a recession to react. They are quite strong statements that are being highly commented.

Economic data

PMI compound and services also with recoil. Index of directors of purchase takes another step back to be 55.4 from 56.3. Although it is significantly above the forecast in 54.7.

Data from United Kingdom. Services PMI step back and outstanding interest rates.

We have seen the data from the services sector, which is calculated privately in China, from June is down from 52.8 to 51.6, much worse than expected to rise to 52.9.

ISM of New York in June leaves a reading of 55.5, rising strongly from 46.7. Good data for the economy, good data for the market and also for the Federal Reserve. Good data for the dollar and bad for the bonds.

Decisive for crude oil

Tension between Saudi Arabia and Qatar may also affect oil production.

The point is that Qatar wants to increase the production of natural gas by a very significant percentage. Everyone has come to believe that one way of stoking the feast in Saudi Arabia, and calling on the country’s boycott for allegedly supporting terrorism, is to increase crude production and destabilize the situation.

Thursday Session Keys

ECB Minutes and US crude inventories.

On Thursday, investors will look to Europe as the minutes of the June European Monetary Policy meeting will be published.

In addition, there will be speech of Praet, member of the Monetary Body.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 7, 2017

Asian markets have been pressured by a weak US close and rising bond prices.

Asian markets have yielded in Friday’s session, ahead of a sharp rise in the bonds.

The movements in the debt have been opposed to the exchanges. The former have increased significantly, while the latter have weakened.

Investors now seem to have little appetite for European debt and are waiting for the ECB to raise interest rates and reduce its stimulus programs.

The dollar has remained stable during Friday’s Asian session, after a sharp drop during the previous session, pending a non-farm payrolls report that is expected to increase by 179,000 new jobs, up from 138,000 in the previous month.

Gold has fallen at the beginning of the session, with minimums in the last two months. The appearance of the American employment data later in the day can be decisive in the evolution of the price of gold.

European markets are expected to open the session on Friday lower.

Debt Auctions

We have had quite significant auctions in Spain, France and the United Kingdom. There has been a significant increase in all deadlines.

This has shown that the reaction to the Federal Reserve minutes is to look for higher rates.

What has been put on the table is medium- and long-term debt. Rises of this type, with maturities of five, ten and more years, are very significant.

Markets have gone down by types of interest

As soon as we have seen that in Spain the rates have risen, and then also in France, the market has collapsed.

It is true that the recovery of the lows of the month led to the search for medium-term resistance, which was located in the buyer interest sample for the month of May. Spanish, German, European and French index futures.

The increase in interest rates in the primary market has been followed by a further increase in rates in the secondary market.

In addition, the resistance in risk assets has not been overcome, which has caused the stock market downturns.

The oil rises

Oil rebounds 2% after its collapse on Wednesday. Crude oil price plummeted after export data from the Organization of Petroleum Exporting Countries.

CNBC reported last week that shipments of the largest oil exporter, Saudi Arabia, and other OPEC members were on the rise in June.

Non-Farm Payrolls

And here comes another loose report. That moment of the month came again, when the United States published what was once the largest engine on the market. The monthly NFP non-farm payroll employment report from the United States, however, has ceased to be the engine of the market for a long time.

Decisions by central banks have been stealing the spotlight. Slowly at first, but are now the only possible trigger on the market that can change a trend.

In fact, headlines on creating new jobs, while still relevant, have been stepping back to the benefit of wages. The latter are related to inflation and central banks base their decisions almost exclusively on inflation.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 10, 2017

Asian markets have been strong, after better-than-expected US employment data.

Most Asian markets have been bullish in Monday’s session, after US employment data hit all expectations and after China’s inflation data was in line with expectations.

Investors are also eyeing the bond market, after a week of widespread gains.

Gold is down in Asian trading on Monday, while the dollar has remained stable and Asian stocks have been strong. The good employment data is taken as favorable for a next rise in interest rates by the Fed.

Oil prices have recovered somewhat from the 3% loss suffered in the previous session. However, markets continue to be under pressure from US economic activity and from the abundant production that still exists on the part of OPEC countries.

The dollar has held steady in Monday’s Asian session after a strong rise in Friday’s session after good job data. Everyone is looking forward to the economic policy that the Federal Reserve will follow in the remainder of the year.

European markets are expected to open up Monday’s session.

Japanese Yen

The Bank of Japan breaks the status quo. It announces again unlimited purchases of Japanese bonds, disregarding the general policy of other central banks.

The yen has weakened strongly after this news.

Reactions to the employment data

Experts say that there are many long ones that have a lot of livestock and have not yet taken profits. There seems to be a lot of choice and role interests in the 1.15 area.

If a favorable data for the euro came out, in the short term there could be a reversal of intense profits.

More uniform dollar for solid employment data? The euro fell against the dollar by 0.28% and stood at 1.1392.

The 10-year US bond yield continues to rise, up to 2.385%.

The price of crude falls again

It leaves almost 3%. The weekly drop is 4%.

In the day of Friday went down by the last references of production known in the United States.

Brent, the benchmark in Europe, trades with declines of 2.91% to $ 47.72. West Texas, a benchmark in the United States, fell 2.9% to $ 44.2.

The Russians make rumors. They are specialists in the matter of low oil. They are dropping they are ready to agree again to lower production. In OPEC they say that there is nothing foreseen, but that they are hopeful by that predisposition.

The play of the bonds

When the interest rates went down, reaching negative rates, the move in the debt market was to buy bonds hoping to sell them at a higher price.

Now, when everything starts to turn around, the problem is that when it starts to increase profitability the price goes down. This directly generates a loss in the case of wanting to sell before maturity those bonds that were bought when interest rates were very low.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 11, 2017

Asian markets have made gains, despite the mixed tone with which American indices ended.

Most Asian markets have been bullish in Tuesday’s session, though the Dow closed slightly lower.

In the midst of a very quiet session, the Fed’s intention to reduce its balance sheet is being weighed.

As large economic data are not expected, investors are now focusing on the movements of central banks that will take place at the end of the week. Janet Yellen must testify before Congress on the 12th of this month.

Oil prices rose during Tuesday’s Asian session, boosted by an expected increase in demand in the coming weeks. Market conditions remain weak, given the over-supply of crude oil and doubts about whether demand will remain in the long term.

Gold has come down on Tuesday, against a firm dollar and as markets wait for Yellen’s speech in which are expected clues about the Federal Reserve’s monetary policy.

European markets are expected to open mixed session Tuesday.

Invest in yen

On Friday the Bank of Japan decided that it will keep its 10-year bond rates at zero percent. Bearing in mind that bond yields at the same time, in the dollar area and in the euro area, are already clearly higher, do not doubt that this will cause a chronically outflow of capital from Japan.

Investors will sell Japanese debt to buy more profitable debt and all that paper is left by the Central Bank of Japan. Its balance is already total nonsense, the worst in the developed world, but will continue to grow more and more …

Natixis believes that all this will lead to strong yen sales that will cause serious problems. They estimate that it has not yet gone through the grotesque consideration that the market has that the yen is ‘safe haven’.

If this totally psychological factor is lost, the fundamental yen should literally fall to lead and cause a crisis of this currency that could end up dragging the bourses. For now let us note that investing in yen, for that of the shelter value, is very unwise.

New oil installations

The Baker Hughes oil facility count in the United States is increased by 12 new facilities. The difference, compared to the same period last year, is 512.

There is no continuity in the reduction of the facilities that we had seen and is a fact that is still clearly negative for the price of crude oil.

BNP Paribas downgraded WTI forecast, at the end of 2017, from 61 to 45 dollars per barrel.

June’s OPEC exports are the highest since a year ago. Is 1.9 million barrels a day more than the same month of the previous year. Do not blame them, as they are doing, on countries outside the agreement. It is true that they are producing much more, but those of OPEC are not far behind.

Population of the European Union

It raises in 1.5 million by the immigration. The population of the European Union stood at 511.8 million people on 1 January 2017.

However, it should be noted that there were the same number of births as of deaths, 5.1 million according to Eurostat.

Dollar Remains

The Fed is still in charge. The dollar starts the week with the same good tone that ended the session of July 7. It retains some of the bullish momentum it gained after the US labor market data for June.

The ‘green ticket’ bulls took the increase in the creation of new jobs as a total support to the monetary normalization of the Federal Reserve.

The US currency has been catapulted to a two-week high against the yen.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 12, 2017

Asian markets have been bearish as investors digest the Trump Jr email issue and Yellen’s appearance.

Asian markets down in session on Wednesday. Trump Jr argues that it will be completely transparent in clarifying everything related to his meeting with Russian lawyer Natalia Veselnitskaya in June of last year. She has stated that she has evidence showing the help offered, on the Russian side, in the presidential campaign.

The reaction to the subject of emails has had more weight in Treasury bonds than the markets themselves.

The dollar has weakened against the yen, having been at a high of the last four months during the previous session. Also the euro / dollar pair has been affected, reaching its highest level since May 2016.

The so-called ‘Russia-gate’ has had its effect on the evolution of the last few hours, however now investors focus on central bank monetary policies.

Oil prices extended their gains in Wednesday’s Asian session, while the United States looks set to see production cuts for next year in the face of continued inventory increases.

Gold bounces from lows for the past four months, as investors are keenly aware of Janet Yellen’s two appearances in Congress and the Senate, where she is expected to hint at the Fed’s intentions for rate hikes interest.

European markets are expected to open lower the session on Wednesday.

Electric power will replace fossil fuels

Fossils fuels are no longer the largest recipient of investment in the energy sector, the latest report from the International Energy Agency said. Investment in electricity received the largest level of investment for the first time ever.

Evolution of the economy in UK

S&P warns that, as the economy slows in the UK, it does not see a rate hike until mid-2019.
According to them, economic growth could slow down in the next two years, with risks to further deceleration by the Brexit.

Warren Buffett’s Greatest Donation

Warren Buffett on Monday donated roughly $3.17 billion of Berkshire Hathaway stock to the Bill & Melinda Gates Foundation and four family charities, his largest contribution in a more than decade-long plan to give away his fortune.

New oil installations

The Baker Hughes oil facility count in the United States is increased by 12 new facilities. The difference, compared to the same period last year, is 512.

There is no continuity in the reduction of the facilities that we had seen and is a fact that is still clearly negative for the price of crude oil.

BNP Paribas downgraded WTI forecast, at the end of 2017, from 61 to 45 dollars per barrel.

June’s OPEC exports are the highest since a year ago. Is 1.9 million barrels a day more than the same month of the previous year. Do not blame them, as they are doing, on countries outside the agreement. It is true that they are producing much more, but those of OPEC are not far behind.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 13, 2017

Asian markets have followed the rise to the Americans after Yellen’s remarks to Congress.

Most Asian markets advanced in Thursday’s session, influenced by gains on Wall Street following Janet Yellen’s dovish statements.

Exports in China are up 15% so far this year. The figure also reflects that the level of business between China and North Korea has grown by 10.5% in the first half.

The Australian dollar, much influenced by the evolution of the Chinese economy, has strengthened after the economic news of that country.

Janet Yellen said that the Federal Reserve will continue with the decline of its balance sheet this year and that will pay special attention to the evolution of inflation. She considers it premature to say whether the 2% target will be achieved shortly. Interest rate rises will be conditioned by the evolution of inflation and the economic situation and do not expect many moves in the remainder of the year. In general, his statements were considered as non-aggressive, reassuring markets.

Oil prices have remained stable during Thursday’s Asian session, in the face of strong demand from China and concern over over-production.

Gold has rebounded on Thursday, following Yellen’s statements in which she said they would move very gradually in their monetary policy. Speculation about possible interest rate hikes for the remainder of the year has come tumbling down.

European markets are expected to open up Thursday’s session.

BoC type upload

As expected, the Bank of Canada raised the interest rate by 25 basis points, from 0.5% to 0.75%. It is the first time since 2010 that there is a rise. Most analysts expected an increase, which on confirming raised the Canadian dollar strongly.

Another bullish factor is in the bonds that try to recover again after the recent strong falls. The market is very sensitive to these things. That is precisely why the meeting of the Central Bank of Canada will be closely monitored.

Once the BoC has raised rates could spread the bonds of major powers and lower.

Shopping at record levels

Amazon customers are shopping at ‘record levels’ worldwide this Prime Day, Amazon said Tuesday morning.
The 30-hour event began Monday night at 9 p.m. ET. By 4 a.m. Tuesday, Amazon said that millions of Prime members globally had already shopped the website for bargains and ‘lightning deals.’

To take advantage of the discounts, shoppers must be Amazon Prime members, which costs $99 a year and includes perks like free, two-day shipping, access to Prime Video and Prime Music.

The yen and the oil

The yen gained momentum after Yellen made her appearance in Congress. She responded to the members of the House Financial Services Committee. Yellen’s tone reduced market expectations for a rate hike in September and raised US bonds.

Weekly crude reserves in the United States fall -7.56 million barrels, well above the -2.85 million estimate. Remember that it is below the figures offered by the API Institute.

Better a gradual rise

The Lieutenant Governor of the Bank of England says he is not prepared to raise interest rates, or at least vote in favor, as there is a lot of uncertainty about the economy. It mentions directly the negotiations of the departure of the United Kingdom of the European Union.

On the other hand, two members of the FED, Brainard and Harker, said the same thing. They do not see anything clear to go up in a hurry, because the economic situation is not clear.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 14, 2017

Asian markets have been mixed, while oil takes a breather.

Asian markets have had a mixed tone in Friday’s session as the bonds rise and investors digest Yellen’s second appearance.

The Federal Reserve Chairman said she agrees that the Trump Administration’s growth target of 3% could be reached because of the productivity growth of US companies. Ten-year bonds have reached 2.35% in the previous session.

The dollar has held steady, against most major currencies, while currency investors remain cautious about the inflation data that will appear on Friday. It is expected to grow in the short term.

Energy markets have suffered declines in Friday’s Asian session. Oil prices are affected by the upward trend in inventories. Nevertheless the weekly balance has been positive.

The gold has hardly undergone variations after cutting, in the previous session, three consecutive days of rises. It was the first week in positive of the last three.

European markets are expected to open up Friday’s session.

Reactions to Yellen’s appearance

The pound / dollar pair moved sideways about 1.29 during Thursday’s US session, while comments from the Federal Reserve Chairman did not provoke market reactions.

Oil will not rise

OPEC fires oil and dynamite pumping oil pact. Libya and Nigeria lead the oil supply increases, for the improvement of their conflicts. Angola, Iraq and Saudi Arabia also raise it.

The harsh reality is that oil today is the most important key to inflation and by far. Right now, unless things change a lot, oil has it very difficult to rise strongly in the remainder of the year.

Low Interest Rates

The types are going to remain low for a long time in all the powers. Possibly for several more years. That will not sound bad to the markets.

The big question is what will happen with tapering in Europe. Although it wants to continue, it is quite unsustainable because there is much debt shortage.

Equally the ECB opts for a rather slow reduction, which may be the ideal solution, and that would not be bad news for the stock market either.

Access to the Single Market

Investment firms established in the United Kingdom will not be allowed to operate in the Single Market.

A derivatives association said that the localization movement towards the European Union was going to make derivative trading more expensive. The European Union’s market authority has urged national regulators to prevent UK investment firms from opening virtual branches within countries in order to continue launching operations from London.

This is called for to ensure that the entire network of decision-making is physically established in one of the member countries.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 17, 2017

Although China’s gross domestic product was better than expected, Asian markets were mixed on Monday.

Asian markets have shown a mixed tone, after data from China’s gross domestic product rose 6.9%, better than the expected 6.8%. The news comes as investors see some signs of a slowdown in the world’s second-largest economy and also concern about high levels of debt.

The dollar weakens, as the risks associated with an aggressive policy on interest rates from the Fed fall. This is throwing investors into values considered risky.

Oil prices have been strong during Monday’s Asian trading session, as a result of declining US inventories and the perception of increased demand.

Gold has risen, while the dollar falls to lows of several months, following the poor economic data in the US that diminish the possibilities of immediate rate hikes.

European markets are expected to open Monday’s session mixed.

Repurchases of own shares

The volume of share repurchases in Europe, is being higher than the regular money inflows in the last decade. In addition, these programs tend to be more stable and less volatile.

We are talking about more money coming in for repurchases than for the usual ‘natural causes’. You have to be very aware of how important it is.

You can do macro calculations, valuations, results, etc. We will remain lame as long as we do not incorporate the very important share buybacks.

The macro may be totally against, even the ECB launching news with the QE, which as the repurchases do not loosen will continue to rise. Of course, on the other hand, it could be all wonderful, that if I gave them to loosen …

Starting the program of repatriation of profits of American multinationals abroad, by means of low taxes, is going to make that also in the United States the buybacks increase substantially.

Only Apple has $ 2.3 billion abroad. Microsoft 116000, Google 53000, Cisco 61000, Oracle 50000, J & J 38000, Amgen 35000, Qualcomm 25200, Gilead 28000, Merck 22000, General Motors 15000.

If all these capitals were brought to their country, repurchases would be very strong.

Central banks in the middle of the scene

Expect a week of much movement, with a dollar that will try to recover part of its losses and with very good opportunities in pairs crossed with the yen.

New York shares, which continue to fly, will have their influence on other markets.

An inflation that goes nowhere

With an evolution of inflation unclear, retail sales are again negative. There has been a decline in consumer confidence created by the University of Michigan.

The dollar has suffered a blow on practically all fronts and commodities have had support for that part.

There is still one base point left so crude oil can take off again. There is certain optimism, more speculative than fundamental, above the tables of the operators.

Access to the Single Market

Investment firms established in the United Kingdom will not be allowed to operate in the Single Market.
A derivatives association said that the localization movement towards the European Union was going to make derivative trading more expensive. The European Union’s market authority has urged national regulators to prevent UK investment firms from opening virtual branches within countries in order to continue launching operations from London.

This is called for to ensure that the entire network of decision-making is physically established in one of the member countries.

DISCLAIMER

The research covered in this report should not be construed as a recommendation to operate. All opinions, news, research, analysis, prices or other information are provided as general market comments and not as investment advice.

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July 18, 2017

Just a few days…

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