CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Market evolution

July 2, 2018

Asian markets fall as China weakens again with the prospect of new tariffs on the horizon

The main Asian markets fell on Monday 2 July, the first trading day of the second half of the year. Heavy losses were recorded in China, before the imminent deadline by which both Washington’s and Beijing’s tariffs are expected to enter into force.

In Tokyo, the Nikkei 225 fell despite the yen’s continued weakness. Losses were widespread, with retailers and the food sector among the worst performers. In China, further declines occur after markets have experienced a rebound in the previous session. The S&P/ASX 200 erased gains at the start of the session and remained almost flat, as the consumer sector and gold producers traded lower. Hong Kong markets closed on Monday for holidays.

The cautious mood in the market is due to the fact that investors are watching for trade tensions between the United States and its trading partners, especially China. U.S. tariffs on $34 billion of Chinese products are expected to come into effect July 6 and China is expected to retaliate with its own tariffs on American products.

Despite this uncertainty, Wall Street closed slightly higher on Friday, June 29. The United States has been supported by the energy sector’s momentum, also after the banks passed the Federal Reserve stress tests and gave good dividends. In addition, Nike has reported results with good sales within the United States and this is making the discretionary consumer sector one of the best.

The euro fell in the early hours of Monday, after the German Chancellor suffered another blow when her Home Secretary resigned because of the conflict over immigration policy.

On the energy front, President Donald Trump unexpectedly announced that there was a new deal with Saudi Arabia. Trump said they had agreed to increase production by up to two million barrels a day. Oil prices fell by more than 1 percent in Monday’s Asian session as supplies from Saudi Arabia, the largest exporter, rose and signs of an economic slowdown in Asia eroded demand prospects.

On Monday’s Asian trading day, gold fell on the Asian market, as the Dollar rose sharply from Friday’s gains in five sessions for the first time.

European markets are expected to open lower on Monday.

Banking stocks are also on the rise

The secretary of state denies that Trump said he wants to leave the World Trade Organization.

These comments have caused a rally in the stock markets on Friday, June 29th. The Dow is preparing to go up more than 100 points, but still has a weekly loss.

U.S. equity index futures pointed to an upward opening, with market sentiment disturbed by tensions in world trade.

Banking stocks are also on the rise, after announcing buybacks and dividend increases following the Federal Reserve’s annual stress test.

Strong rises in stock markets following the European Council’s pact on immigration. European stock markets are rising sharply on Friday 29 June, the last session of the week, following the agreement on immigration reached by political leaders at the European Council.

China is spending billions to develop an army of robots to fuel its economy

In 2014, Chinese President Xi Jinping called for a ‘robotic revolution’ in manufacturing. Now it is on the move to boost productivity.

After decades of growth, rising wages are consuming profits and pushing manufacturing into Southeast Asia. The monthly minimum wage in Shanghai, for example, the highest in China, is 2,420 yuan (US$366), two and a half times higher than a decade ago.

Not being able to compete with cheap labour means raising overall manufacturing capabilities, said Jing Bing Zhang, director of market intelligence research.

According to the International Federation of Robotics, China added 87,000 industrial robots in 2016. It is slightly below Europe and the United States combined, but China’s growth is forecast to exceed 20 percent annually by 2020.

Data from the euro area. Preliminary CPI rises a bit higher

The preliminary consumer price index for the euro area in June rose by 2%.

It’s up from the previous 1.9% and it’s just what expected.

The underlying is just the other way around. From a growth of 1.1% it drops to 1%.

The upward thrust of fuels continues to be very noticeable.

Agreement in Europe on the problem of migration

As soon as the news broke, the euro began to rise sharply against all the crosses.

It is expected that this agreement will reduce the strong political tensions that were originating, mainly in Germany, with the danger of breaking up the governing coalition.

Exchanges also benefit from this appreciation.

Why when the recession comes, the rate curves are reversed?

Those who manage 99% of the fixed income market are the strong hands.

When they see serious danger in the economy, they start to discount that at some point the central bank will lower rates. Or, at the very least, it will take steps to try to support the economy.

In such a situation it is no longer in their best interest to buy bonds in the short term, which may not benefit from this decline. It pays more to buy long-term bonds because they know for sure that sooner or later there will be a rate cut and this will give more value to your bonds.

Thus, long bonds fall in yield because there are many purchases, and short bonds rise because they have fewer purchases.

The alarm would come if the spread were to approach the 60 basis point range. It is currently at just over 30 basis points.

DISCLAIMER

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

1 Like

July 3, 2018

Asian markets are falling in the middle of the trade war

Asian equities traded mostly lower on Tuesday, July 3. China’s markets widened their declines as investor concerns about trade relations between Beijing and Washington grew.

Hong Kong’s Hang Seng index plummeted after opening its doors after the holidays. The main losses were in the energy and services sectors. Highly weighted finances also collapsed. The Nikkei 225 has plummeted after a slight reverse during the night session. Airlines and oil producers clung to profits, while most other sectors calmed down. In South Korea the Kospi fell, with manufacturers and technology showing a mixed tone.

Investors remain cautious, awaiting developments in trade tensions. The July 6 deadline for the United States to impose a 25 percent tariff on Chinese products is approaching. They cover more than 800 categories, worth $34 billion. China has also announced that it will retaliate, with taxes on the same value, on U.S. products.

Companies that buy back their own shares are the only thing keeping the stock market afloat right now. Stocks remain buoyed by a bonanza of historic corporate acquisitions. At the same time, investor sales have also set a new record.

The Dollar held steady during Tuesday’s Asian trading session, as political uncertainty in Germany grows.

Oil prices rose on Tuesday after Libya declared problems in supplying the markets. However, the increase in total OPEC output, as well as that of the United States, continues to drive energy markets.

Gold rose sharply on Tuesday’s Asian trading day, after hitting a six-and-a-half month low. Tensions in international trade supported this metal as a refuge value.

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

Independence Day of the United States

Wall Street futures move in with heavy falls.

On Monday, July 2nd, the only outstanding reference is the PMI of the manufacturing sector for the month of June.

The week is marked by the holiday of July 4th, the Independence Day of the United States, with markets closed on Wednesday and early closing on Tuesday.

Traders are awaiting the end of the week’s key data: Minutes of the latest Fed meeting on Thursday and Non Farm Payrolls data for June on Friday.

Europe opens the semester with new falls. After an opening with strong falls on Monday 2nd July, the European stock markets are moderating the cuts they are making for the first time this semester. The Ibex, which dropped 1.8% in the first few minutes of the session, is moving away from the year’s lows and trying to recover its 9,600 points.

European stock markets begin the day with bearish references from Asia and the added problems of Germany. Fears of a break-up of the ruling coalition are aggravated by the announcement of the resignation of the Minister of the Interior.

Trump continues to attack European products and the European Union does not back down

The situation can be more than unsustainable with the back and forth of new tariffs by all parties to the conflict.

General Motors has warned that their business is in danger if Trump goes ahead.

The supply chain has become globalised and the increase in costs will be felt, reducing profitability and damaging profits or sales, depending on whether the company wants to assume the cost.

Ford is in exactly the same position.

Whoever says car manufacturers also says supplies. Values like Johnson Controls or American Axle also have problems.

Last Friday, the European Union sent a document to the US Department of Commerce

It describes as unjustifiable and meaningless the possible new tariffs on imports of cars and components for the sector.

In addition, the text warns that the main victim could be the US car industry itself, due to possible countermeasures by the European Union.

On the other hand, from Brussels they warn that some 420,000 jobs could be at stake that European manufacturers are currently holding on US soil.

Baker Hughes oil facility countdown

The memory of oil installations by Baker Hughes offers a decrease of five installations, which leaves a difference of only 107 compared to last year at this time of year.

It should be borne in mind that, little by little, the gap with last year is narrowing.

Unemployment remains at 8.4% in the euro area

Unemployment in the euro area remained stable at 8.4% in May. As in the European Union, where it remained at 7%.

In Spain, the unemployment rate in May stood at 15.8%, two tenths less than in the previous month.

In the countries of the single currency this is the lowest percentage since December 2008. While in the Twenty-eight it is the lowest rate since August of the same year.

DISCLAIMER

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

1 Like

July 4, 2018

Markets in Asia falter, with China edging lower as trade concerns simmer

Asian equities fell on Wednesday, July 4th. China’s markets failed to maintain their gains from the last session, as investors’ nerves continue to grow before the deadline for new tariffs to take effect.

In Japan, the Nikkei 225 fell, with the household appliance sector being one of the worst performers. The Kospi fell by 0.38 per cent, while in Australia the S&P/ASX 200 fell by 0.57 per cent amid widespread weakness. Hong Kong’s Hang Seng index fell, widening the losses of the previous session, with the largest falls recorded in the energy, real estate and materials sectors.

Both the yuan and the Chinese markets are on the brink of a precipice as US tariffs are approaching activation. Beijing has said it will retaliate by also imposing tariffs on US products.

Apart from China, the United States is also involved in trade-related disputes with other trading partners. These are Canada, Mexico and the European Union. All these countries have begun to impose tariffs on U.S. products, following the Trump administration’s decision to apply tariffs on imports of steel and aluminium.

Investor sentiment is reeling amidst the uncertainty surrounding U.S. trade policy on the eve of the July 6 deadline.

On Tuesday afternoon, oil prices remained stable after a volatile session in which US crude oil reached $75 a barrel for the first time since November 2014 and before falling sharply in the middle of the morning. The market is increasingly concerned about oil shortages. Supply disruptions in Libya and Canada, and the harsh sanctions announced by the US against Iran, have had an impact.

The Chinese yuan recovered from its 11-month lows following efforts by the authorities to show financial markets that its currency is not depreciating.

Gold rose to weekly highs on Wednesday, after previously hitting a seven-month low, while the dollar weakened against the yen and the deadline for the release of Chinese import tariffs is approaching.

European markets are expected to open mixed on Wednesday.

Profits on Wall Street

Profits on Wall Street on the eve of the 4th of July.

Wall Street recorded moderate gains on Tuesday, July 3, while the market remains expectant of the outcome of the trade frictions between China and the U.S. pending the activation of U.S. tariffs on Friday.

Within the business chapter highlights the fall of Facebook in the NASDAQ 100. It gives 2% after a failure that allows access to 800,000 users blocked to the social network. Tesla is also down 3% and is the least profitable company in this index.

The day is marked by the 4th of July holiday, which celebrates the Independence Day of the United States. On Tuesday Wall Street will only open in mid-session format and on Wednesday there will be no stock market. Trading volumes are expected to be lower than normal these days.

Careful about Independence Day in the United States, market behaviour can be erratic and illogical.

Europe leads the way and the United States is lagging behind. Finally, an agreement is reached within the German government that allows for their survival. It is something that is accelerating the entry of money into risk markets and exits from security markets.

Share buyback

Companies that buy back their own shares are the only thing keeping the stock market afloat right now.

Shares remain encouraged by a large number of historic corporate acquisitions.

At the same time, investor sales have also set a new record.

Retail sales remained stable in the eurozone

Retail sales showed no change in May in the euro area and rose by 0.3% in the EU as a whole compared to the previous month.

In April, retail trade had declined by 0.1% among the 19 countries sharing the single currency. However, they had increased by 0.2% among the Twenty-eight.

The volume of retail sales in the euro area was unchanged due to a 1.1 % increase in the food and stimulant sector. The non-food sector fell by 1% and the fuel sector remained intact.

The dollar is rising and platinum is rebounding sharply with gains of more than 3%

We need to keep an eye on the materials sector and also on the energy sector.

In the energy sector of the S&P 500 it is clear that, until there is an increase in oil production, the market will continue to tighten the screws on OPEC and Russia.

Libya has problems producing because of armed clashes near strategic production points.

A significant and visible increase in production is needed if the market is to curb its intention to reach $80 a barrel. It has been seen that politically, difficulties were going to be introduced in order not to reach this area.

An advisor to the Central Bank of China says he does not think the Yuan will depreciate significantly

The recent depreciation is a normal market reaction and the Chinese do not recognize that they are actively guiding the depreciation of the Yuan.

The trade war is there and China also has strong trade relations with Europe.

In fact, they said they wanted to buy a lot of planes on the Old Continent. There could be an extra source of income in this part, which Boeing wouldn’t take.

DISCLAIMER

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

2 Likes

July 5, 2018

Most Asian markets are losing ground to cautious investors in the face of the first wave of trade tariffs

Asian markets traded mostly lower on Thursday, July 5, and investors were cautious before the deadline for U.S. and Chinese tariffs to be implemented.

The Nikkei 225 fell with falls from oil producers. Banks and retailers led the losses. South Korea’s Kospi invested the initial gains to record a decline as technology stocks fell on negative ground.

Concerns about the U.S.-China trade dispute have weighed on market sentiment the day before the tariffs that both countries say will take effect July 6. The Trump administration has imposed a 25 percent duty on $34 billion worth of Chinese products. The Chinese government has retaliated by announcing tariffs on the same value for U.S. products. Because of the time difference, the tariffs imposed by Beijing will probably come into effect before those imposed by Washington.

European markets closed on a mixed tone in the last session, with investors nervous about rising tensions between Washington and Beijing. U.S. markets closed on Wednesday because of the Independence Day holiday.

Although the economic impact of tariffs is relatively small, investors have been nervous about possible retaliation that could turn the dispute into a major trade war.

On Thursday, on the eve of Washington’s deadline to impose tariffs on Chinese imports, the Japanese yen remained stable. The yuan also remained stable after the Chinese Central Bank attempted to halt its recent decline.

Oil prices fell during the Asian session on Thursday, after President Trump tweetaled to urge OPEC to reduce oil prices.

Gold rose to a one-week high on Thursday as the Dollar weakened. Markets are waiting the minutes of the June meeting of the U.S. Federal Reserve, which will be released at the end of the session.

European markets are expected to open lower on Thursday.

Without the Wall Street reference

July 4 holiday in the United States celebrating Independence Day.

The stock exchanges are left without the Wall Street reference on Wednesday, July 4th. Trading volumes fall significantly, as is often the case. On holidays on Wall Street, the trend on European stock markets is generally upward.

If the trade war picks up on Friday, a possible halt in the Federal Reserve’s trend may be expected. The Bank of England has already warned of the need to be prepared for a possible global rate cut.

Activity in the Eurozone improves thanks to the services sector PMIs on Wednesday 4 July. The whole world is on the lookout for the side effects of the European Central Bank movement. It seems that the conditions for the European Central Bank to change its monetary policy have not yet been created.

On the one hand, there is the fear of damage to world growth caused by the tariff war. On the other hand, there is the positive effect of the high price of crude oil on inflation. This would leave a dead heat situation.

Weekly API Crude Oil Reserves

They give an estimate of 4.5 billion barrels, against 9.228 billion in the previous estimate.

Iran’s OPEC governor talks about Donald Trump’s pressure on international firms not to buy Iranian oil. He says they’re contributing to a rise in the price of crude oil.

He adds that oil should not be used as a weapon for political purposes.

Official Kremlin sources have stated that oil will not be one of the main topics to be discussed during the upcoming summit between the President of the United States and the President of Russia.

The director of the Ifo of Germany ventures further problems for the German economy

He reports that if more exports than imports continue, there could be a deterioration of the German economy.

Germany’s exports are focused on the manufacturing sector and are creating an imbalance. Not only with the United States, but also with other trading partners and with the European Union.

Statements by Harada of the Bank of Japan

He says they will do their best to reach the inflation target of 2%.

They could provide further monetary policy measures, if necessary, in the event of losing the recent upward trend.

Moreover, unemployment must continue to fall if this inflation target is to be met.

What was ahead with the yuan

Reports are leaking out that China will continue to drop the yuan. On Tuesday, the authorities tried to prevent it from happening too quickly and uncontrollably.

China seems to be serious about tariffs against the United States. There are reports that China will apply tariffs from 12 p.m. on Friday, July 6.

With the time difference, it would be China that would shoot first in this war. You’ll see how Trump handles this, because he can now accuse that it’s China that’s looking for the damage.

DISCLAIMER

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

1 Like

July 6, 2018

Asian markets are positive, awaiting the deadline for the imposition of tariffs and American employment data

Asian equity markets were slightly bullish on the last trading day of the week, as investors prepare for new developments on the trading front. The deadline for the entry into force of the U.S. and Chinese tariffs is this Friday.

On Friday, July 6, investors will be mainly awaiting the activation of the US tariffs of 34 billion dollars, which in principle will have an equivalent response from the Asian country, although China has said they would not be the first. The U.S. economy will also be on the macroeconomic agenda with the release of its June unemployment rate, along with non-agricultural payrolls and average hourly wages. It will also release its trade balance for the previous month.

After the expiry of the entry into force of the tariffs, Chinese markets rebounded slightly, after having been on negative territory. The Nikkei 225 climbed, as most sectors recovered after three consecutive downhill sessions. In Australia, the S&P/ASX 200 was bullish due to convincing gains in the materials and telecommunications sectors.

During Friday’s Asian trading session, most of the major currencies were affected by the upcoming implementation of tariffs and the release of U.S. employment data. If the employment data is positive, then both the Dollar and the Yen are likely to be on the upside. The EUR rose on Thursday as Washington softened its threats to EU carmakers.

Crude oil prices fell during Friday’s Asian session in a market that was nervous about trade developments.

On Friday, gold prices fell under the influence of a stable dollar. Investors are preparing for any kind of global impact, due to the deepening trade conflict between the United States and China.

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

Wall Street bounces back

Wall Street bounces back on the eve of tariffs.

Wall Street bounces slightly on Thursday, July 5th. The market is still very much awaiting the activation of US tariffs against China, which, according to Beijing, will have an equivalent response.

In the area of monetary policy, the Federal Reserve published the minutes of its last meeting. It decided to raise interest rates and anticipated two further increases before the end of the year.

The employment report of the private consulting firm ADP has shown the creation of 177,000 jobs in June, a positive figure although slightly below the 190,000 jobs expected by consensus. This is a leading indicator of the official U.S. Employment Report, which will be released Friday by the U.S. Government. The consensus anticipates the creation of 195,000 jobs, an unchanged unemployment rate of 3.8% and an increase of 2.8% in the average hourly wage.

The news has come out that the US ambassador has spoken in Germany about tariffs. He has been with the major car manufacturers and offered to cancel the threat of tariffs if Europe does not impose taxes on American cars.

There was fear that China would pull the trigger on tariffs before the United States

This would undoubtedly be answered by Donald Trump by making there more reasons for the United States to give free rein to its tariffs.

However, China has said that they will do nothing as long as the U.S. does not fire.

This opens up the possibility that the Americans will not finish off the threats. This is a very positive development for the automotive sector.

Federal Reserve releases minutes of its June meeting

At that meeting, the Fed raised interest rates for the second time this year.

Central bankers also reported two more increases during 2018.

The Bank of England says a trade war would do more harm to the United States

The governor of the Bank of England says that if trade disputes between the United States and other powers intensify, it will be the U.S. economy that suffers the most.

In a speech in Newcastle, Carney said that GDP in the United States would suffer by 2.5% if tariffs on its trading partners were increased by 10 percentage points.

The global economy as a whole would lose 1%, while in the European Union and the United Kingdom the impact would be less.

The market breathes when Trump hesitates in the trade war

Once again, the American president’s strategy is clear: He is very threatening and aggressive in the negotiations. However, when the one across the street stands up, it seems he has no problem offering a way out.

In short, the automotive and parts supersector is the best in Europe. The same situation seems to exist in the United States, but with an extension to the technology sector by Tesla.

DISCLAIMER

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

2 Likes

July 7, 2018

Just a few days…

2 Likes

July 23, 2018

The Nikkei is down 1.1% as the dollar spreads its losses and the rest of Asia is trading lower

Asian equities fell on Monday, July 23, and Japanese equities were under pressure from the Yen’s strength. They do so after the dollar fell in the face of criticism from the US president of the Federal Reserve.

The Nikkei 225 fell 1.09 percent, as the Dollar continued to lose ground against the Japanese Yen. The Dollar was 0.35 percent weaker than the level seen at the end of Friday’s session in New York. Leading exporters were downwardly traded, with a 0.86 per cent drop in the household appliance sector and car manufacturers. The financial sector, however, recorded strong gains.

Chinese stocks also fell. The Kospi fell and the sharp declines in major technology stocks were partially offset by gains in the automobile manufacturers and manufacturing sector.

The Dollar fell sharply against the Yen on Monday’s Asian trading session. It does so after the US President expressed his displeasure at the strength of the dollar and after world finance leaders concluded the G20 meeting without consensus on how to resolve the many disputes over US tariff measures.

Trump broadened his criticism of global monetary policy and the Federal Reserve. He says that China, the European Union and other countries have been manipulating their currencies and interest rates to the detriment of America. This, together with the Fed’s interest rate hikes, caused the US to lose its competitive edge as the dollar strengthened.

The US Administration wants a weaker dollar, either implicitly through its protectionist policy actions focused on the current account deficit, or explicitly, as we have heard from the president on many occasions.

Oil prices fell during Monday’s Asian session due to growing concerns about fuel demand and after finance ministers and central bank governors warned at the G20 that the risk of a weakening of global economic growth has increased amid growing trade and geopolitical tensions.

Gold rose sharply on Monday as the Dollar hit a two-week low after Trump criticized the Federal Reserve’s interest rate tightening policy.

European markets are expected to open lower on Monday.

Trump knocks the markets down

The week ending 20 July, Trump made another of his own comments. It now proposes to put tariffs on virtually all products that China exports to the United States. The Chinese fall short of putting equivalent sanctions in place. With this, if they want to fight back, they will continue to devalue the yuan.

There’s real panic about Trump’s measures. In an interview with CNBC, he says he is prepared to impose $505 billion in tariffs on China. The market is panic-stricken because it is capable of making this a reality and it will certainly not hesitate to attack the European Union.

In the midst of all this, the recent rise in the S&P 500 comes with few highs and is therefore suspicious.

Italy is back on its feet against the Euro and is shooting up its secondary debt rates. The Italian index is the worst on Friday, July 20, and rates rise with the future on ten-year debt falling 56 points. The fault lies with the new comments of Claudio Borghi, from the Northern League, who says that Italy will come out with the Euro sooner or later and is convinced of it.

Trump criticizes the Fed for raising interest rates

The US president criticised the monetary tightening implemented by the Federal Reserve, saying it is ‘not enthusiastic’ about the interest rate hike. According to him, it can affect the country’s good economic performance.

The Dollar has been blown up after Trump’s attack on its fortress and the Federal Reserve. The President of the United States has once again shown that he has no problem interfering with the dollar exchange rate.

Eurozone government deficit drops to 0.1% of GDP in first quarter

The public deficit in the eurozone fell by five tenths in the first quarter of 2018. It did so at 0.1% of GDP, compared to the last quarter of 2017. Government debt increased by one tenth to 86.8 per cent of GDP.

For the European Union as a whole, the government deficit was reduced by one tenth in the first quarter to 0.5% of GDP. Debt also fell by one tenth to 81.5% of GDP.

IMF estimates that a ‘hard brexit’ would cost the EU 1.5% of GDP over the next decade

The strength of integration between the euro area and the United Kingdom means that there will be no winners for the Brexit.

The International Monetary Fund forecasts that the United Kingdom’s exit from the European Union next year could have a negative effect on the EU economy of 1.5% of combined GDP in the long term.

However, the Fund indicated that the impact on individual countries would vary according to their links with the United Kingdom. It placed Ireland, Holland and Belgium as the most affected.

U.S. considers imposing tariffs on uranium imports

The Department of Commerce Security Office will conduct a thorough, fair and transparent review to determine whether uranium imports threaten to harm national security.

The inquiry will analyze the uranium sector of the mining industry through enrichment, defense and industrial consumption, according to the government.

U.S. production needed for the nation’s military and electric power has declined from 49% to 5%.

This decision follows a petition filed by two U.S. uranium mining companies and follows consultations with industry stakeholders, members of Congress, the Department of Defense and the Department of Energy.

DISCLAIMER

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

1 Like

July 24, 2018

Asian markets advance with China leading and the Yuan still dropping

Asian equities advanced on Tuesday, July 24, with China outperforming all and investors watching for bond yields and the fall of the Chinese yuan.

Chinese equities expanded their gains. These gains came after China’s State Council announced on Monday that it would pursue a more vigorous fiscal policy as the economy cooled. Meanwhile, the yuan extended its losses by another 0.6 percent.

Hong Kong’s Hang Seng Index rose as strong gains in the materials, construction and financial sectors improved. The Japanese Nikkei 225 advanced, recovering slightly after Monday’s session. The steel sector led Tuesday’s rally and most sectors posted gains, with car manufacturers strengthened. In South Korea, Kospi reversed the downward trend. Australia’s S&P/ASX 200 rose, with the materials sub-index leading the gains.

All these moves came after a mixed shutdown on Wall Street, with US technology stocks advancing to a record level. Google’s parent company, Alphabet, rose after the company reported its results, which exceeded second quarter profits and revenues. Facebook and Amazon are expected to report corporate results on Wednesday and Thursday, respectively. More than seventeen percent of the S&P 500 companies reported earnings in the previous quarter.

The dollar weakened slightly on Tuesday in Asia as Japanese exporters bought the yen, offsetting gains made by the dollar after U.S. Treasury yields rose. Influencing the expectation that the Federal Reserve will persist in its intention to raise interest rates more times this year.

Oil prices fell. Attention was focused on the risk of oversupply and as investors set aside the escalation of tensions between the US and Iran.

In Tuesday’s Asian trading session, gold was on the decline as US Treasury yields rose and investors’ reaction to the US-Iran dispute remained on hold.

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

The Bank of Japan has brightened the day

The Bank of Japan has brightened the day for banks.

The Bank of Japan would be considering how to turn monetary policy around.

The comments that haunted the market on Monday, July 23, came from virtually everywhere. It began last week, with those direct comments form Trump to the Federal Reserve saying that they should not raise interest rates and seek to devalue the dollar to boost exports.

It follows the crossover of statements between the United States and Iran. This country threatened the United States with the mother of all battles. America replied that Iran it would pay the consequences.

We had a bearish session in Europe with statements by the President of the United States to social networks on Monday, July 23, maintaining the trend that breaks with the established order in diplomacy for decades.

If the next blow comes, because of commercial tension, with interest rates very low, it could not be lowered any further to contain the economic disaster. Before that happens interest need to be raised. We now have a general rise in interest rates on the secondary market and banks in Europe and the United States are thanking for that.

U.S. business address out of the president’s reach

It has left everyone open-mouthed about the Wall Street Journal where a Republican senator has sent a letter to the White House suggesting that, if Donald Trump does not stop pursuing tariffs, he would support a change in legislation.

Such a change would propose that the country’s business management capabilities be beyond the reach of the president.

There were already a lot of comments on this last week and it was said that they did not necessarily agree with President Trump’s business strategy.

Therefore, the threat is so serious that a certain civil war is beginning to appear within the Republican party.

There’s a feeling that Donald Trump is totally out of control.

China warns the United States that its threats of higher tariffs will not work

China warned the United States that threats and intimidation will never work and asked it to try to resolve trade disputes in a reasonable manner.

The Chinese will always have the option of devaluing their currency to attack American exports.

America is calling for a trade war

China does not want a trade war, but it is not afraid.

Geng Shuang, spokesman for the Ministry of Foreign Affairs, said that ‘we will do what we have to do and we are confident in our ability to secure our interests’.

The ministerial source said so after the U.S. president assured Friday that he is willing to impose a third battery of taxes so far this year in Beijing.

China has no intention of boosting its exports through a comparative devaluation of its currency. The exchange rate of the Chinese yuan is determined by market supply and demand. There are ups and downs, it’s a two-way fluctuation.

G20 agrees to step up efforts to mitigate economic risks

The third meeting of the G20 finance ministers ended with a call to intensify dialogue and action to mitigate economic risks and strengthen confidence.

Leaders admitted an increase in trade tensions. World trade is recognized as an engine for growth, job creation and development.

With protectionism as a major theme, finance ministers and central bank governors reaffirmed the conclusions reached at last year’s Hamburg summit.

The emphasis is now on the commitment to free trade.

DISCLAIMER

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

3 Likes

July 25, 2018

Asian markets show a mixed tone as recent China bounce wavers

Asian markets were mixed on Wednesday, July 25, with reference to Japan and Hong Kong which were bullish. The session followed the trend of Wall Street, which advanced thanks to solid corporate results.

The Nikkei 225 traded higher, with the steel sector in the lead. The car manufacturers were strong for the most part. The Kospi moved into negative territory, as the big technology companies declined. The S&P/ASX 200 lost, as declines in health care and basic necessities dragged the index down.

China’s stocks were mixed. Earlier this week Beijing announced that it would pursue a more vigorous fiscal policy, including corporate tax cuts. Chinese financial markets are rediscovering an appetite for risk that had not been seen in months, taking as a reference the government’s greater drive to invigorate an economy that has been slowing so far this year.

On the trade front, the Trump administration intends to offer up to $12 billion in aid to support farmers affected by tariffs between the United States and its trading partners. US tariffs on $34 billion in Chinese imports came into effect earlier this month and were the subject of retaliatory measures by Beijing on US products. The Chinese tariffs included U.S. soy, among other products.

The mixed session in Asia also took place after the rise of the American markets. Most of this was due to the publication of good corporate results. Alphabet is jumping 3.9 percent after the company reported its expectations.

The U.S. dollar and the euro remained within a tight range during Wednesday’s Asian session, prior to the meeting between U.S. President and European Commission President Jean-Claude Juncker, as investors focused on the trade rupture between the two economic powers.

Crude oil prices rose for the second day in a row on Wednesday after data showed that U.S. oil inventories had fallen more than expected in the past week. This eases concerns about the oversupply that had dragged the markets into the past few sessions.

Gold prices rose sharply on Wednesday in Asia as investors waited for economic data from the U.S. economy.

European markets are expected to open mixed on Wednesday.

The Dow has a three-day losing streak

However, the S&P 500 is positive after three days. The Nasdaq saw its first win in four sessions on Monday and has benefited greatly from the FAANGs.

On the American side, on Tuesday, 24 July, there was a good development of events, but with nuances. Many of the business results have shown improvements in forecasts, which was a major concern in the context of the global trade war.

There was a positive session in the European market on Tuesday 24th July. The major index futures have been on positive ground, especially the German index.

Europe is doing well with strong increases in core resources

This is something that should be passed on to the materials sector of the SP 500. The banks are also helping and the automotive and spare parts sectors are doing exactly the same thing.

We must remember that the meeting between Europe and the United States will soon take place to discuss trade and car tariffs.

For now Trump is embracing the meeting, saying it was long overdue. This absence of hostilities is something the market likes very much.

Car manufacturers and their entire ecosystem are thankful to see that, in June’s preliminary reading, the index of purchasing managers in the manufacturing sector has improved from the previous one. It has come out above expectations and is expected to be similar in the US.

IMF warns of excessive imbalance in the global external sector

The International Monetary Fund warned of an excessive imbalance in the external sector on a global scale. It is a concentrated imbalance in advanced economies and poses risks to the stability of global finances.

Between 40% and 50% of global current account imbalances are considered excessive, i.e. some countries are saving too much and others are borrowing too much.

From a global perspective, excessive surpluses have been particularly large and persistent in a small group of countries. Especially in Germany and China and, to a lesser extent, South Korea, the Netherlands, Sweden and Singapore.

The excessive current account deficit was concentrated in the United States, the United Kingdom, some euro area debtor countries, such as Spain, and emerging market or developing market economies, such as Argentina and Turkey.

The Turkish lira plummets after the central bank has left rates unchanged

Another setback for the Turkish lira, which plummeted 3% against the dollar.

It does so after the Turkish Central Bank has announced that it is keeping interest rates unchanged at 17.75%.

North Korea appears to have begun dismantling key facilities

It is being observed that it is dismantling, for example, its main satellite launch site.

It is a step towards fulfilling the commitment made by North Korean leader Kim Jong Un at his summit with President Trump in June.

DISCLAIMER

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

1 Like

July 26, 2018

Most major Asian markets weakened as U.S.-EU trade fears fade away

On Thursday, July 26, Asian equities fell, driven by a weakening of Chinese markets.

China’s markets deepened their losses at the start of the session. Most sectors declined, including the financial, automotive, oil and real estate sectors. Japan’s Nikkei 225 is down. In South Korea, the Kospi rose slightly. The manufacturing, technology and oil sectors were the main contributors to progress. The Australian S&P/ASX 200 suffered losses.

The Dow rises more than 150 points in a sudden move, after Trump allegedly has obtained concessions from the European Union to avoid a trade war. All American markets closed higher on Wednesday.

Trump said they have agreed to work together to achieve zero tariffs, plus zero non-tariff barriers and zero subsidies for industrial goods outside the automotive sector. Both the United States and the European Union have begun to establish a transatlantic trade truce. The negotiations still have a long way to go.

There was hope for an agreement with China in May, but since then both China and the United States have become entrenched in their positions. Trump takes advantage of popular support for protectionism and anti-Chinese sentiment. The trade threat could therefore worsen further, meaning that it risks slowing economic growth.

The dollar plummeted on Thursday and the euro rose as the U.S. and the European Union agreed to begin talks to lower tariffs, easing concerns about worsening global trade tensions.

President Trump has been talking a lot about controlling world oil prices. He spoke about Saudi Arabia’s need to increase production. During a press conference with Russian President Vladimir Putin, he also raised the idea of regulating oil prices. Now there are good reasons for Trump to be concerned, as his administration’s plan to sanction Iranian oil exports in November will create a significant decline in global oil supply.

Brent crude led the way in rising oil prices, extending profits for the third day in a row after Saudi Arabia suspended crude oil shipments through a strategic transport route in the Red Sea and data showed U.S. inventories fell to a three-and-a-half year low.

Gold prices rose sharply on Thursday, as the Dollar fell on the back of an agreement between the President of the United States and the President of the European Commission.

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

A very volatile day on Wednesday

U.S. futures and another big block of corporate profits.

A very volatile day on Wednesday, July 25th, when the Nasdaq reached record highs during the session to finish in lows.

Bad news from the price of crude oil, which stands at over 69 dollars a barrel, as weekly reserves have fallen further and tension in the Middle East has increased.

Another negative point in the U.S. has been the sale of new homes. It has fallen more than expected, following the negative trend of the whole year. The sale of second-hand homes was not strong either.

All this things in a context of higher interest rates and higher financing costs.

Fear of Donald Trump pulling the trigger on car tariffs. Negative session in the European market on Wednesday 25th July, where the clear protagonist has been related to the import tariffs on European cars in the United States.

If we look at the market from the inside we have that most of the supersectors are in negative, but with clear losers: Automotive and spare parts with a decrease of 3% and travel and leisure with a decrease of 1.2%.

Trump to propose to Juncker that the United States and the European Union repeal all tariffs

The European Union comes to Washington to negotiate a trade agreement.

Trump has said he has an idea for them: Both the US and the EU are abolishing all tariffs, restrictions and subsidies. That would finally be free and fair trade.

The president added that the United States is ready to adopt its proposal, but assumes that the European Union will not be ready to adopt it.

The question is… Who started this whole tariff thing?

Finally there was a principle of agreement…

It’s the results of General Motors that have unleashed a downward blow

General Motors, while the results have not been good, warns of the damage that tariffs are causing to steel and aluminium and reduces the prospects for this year.

This has boosted sales throughout the automotive sector and also in other manufacturing sectors.

Boeing has performed better than expected, but also has a bearish move.

White House strategies are already having a negative effect on American companies.

There is a renewed sense that technology is the refuge value. At the Globex, the Nasdaq is the best behaving.

Weekly oil reserves

Weekly oil reserves fall by 6.14 million barrels. This is a drop of more than the 2.33 expected.

Weekly reserves of distillates fall by 101,000 barrels and remain negative after 371,000 the previous week.

Weekly gasoline reserves are falling by 2.32 million barrels. This is much higher than the expected drop of 713,000.

This may lead to a bullish crude oil price.

German employers’ confidence falls to a sixteen-month low

German business confidence fell in July to its lowest level since March 2017.

The companies were somewhat more satisfied with their current business situation, but slightly lowered their expectations.

According to the president of the IFO Institute, Clement Fuest, the German economy continues to expand, but at a slower pace.

DISCLAIMER

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

2 Likes

July 27, 2018

Most Asian markets have shown a slightly bullish tone

Asian equities were mixed on Friday, July 27, with Australia rising while other major markets in the region showed weak results. Investors focused on trading headlines and upcoming economic events.

The Nikkei 225 rose, although progress was limited because the financial sector did not keep up. Next week’s Bank of Japan meeting is expected to be the focus of investors’ attention. The S&P/ASX 200 recorded more convincing gains, with the index led by the information technology sector.

During the week, U.S. equity markets rose, thanks to good news about business performance and a possible solution to U.S.-European trade relations. It is still too early to celebrate the outcome of the negotiations between the United States and the European Union. It has not yet been proven that Trump is now against tariffs. However, the new attitude could also influence trade relations with China.

Wall Street stocks were moderately bullish, while the technology sector suffered a sharp decline after Facebook reported a loss of revenue in the second quarter. The social media giant’s shares fell 18.96 percent, suffering the worst day in its history.

During Friday’s Asian session, the Dollar remained stable as investors waited for U.S. economic growth data. Such data could be a new catalyst, in the midst of a new approach to global monetary policy and the direction of bond yields.

Oil prices fell on Friday after three days of gains, but were still supported by Saudi Arabia’s suspension of crude oil transport via a key sea route, the fall in US inventories and the easing of trade tensions between Washington and Europe.

Gold prices rose on Friday, but remained at last year’s lows, while investors are awaiting data on U.S. economic growth.

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

What Facebook takes down Trump puts on

Trump surprised by putting his famous tweets on Thursday, July 26, this time in a very positive volume in connection with his meetings with Juncker to negotiate a possible mutual lifting of tariffs.

For the time being, common sense seems to have prevailed and they have reached a pre-agreement according to which: They are going to negotiate the removal of tariffs, which would save the automotive sector if it were to be confirmed. They’ve put the steel and aluminium tariffs in the package. Both parties undertake, while negotiations are in progress, not to impose any further tariffs.

It is very important what happens, because the market might think that in the end the same thing will happen with China.

The big negative factor of the day has been the sharp fall in Facebook, which has fallen to 19% and lost a market capitalisation of almost 150 billion dollars in a single day. Never in the history of Wall Street have we seen anything like it.

Day of strong rises in Europe. There have been numerous publications of results in Europe on Thursday 26 July and, in general, they have not gone wrong.

Draghi has again reiterated that the QE ends in December and that rates will not be raised until at least the summer of 2019. But he added something new, which the stock markets liked but not the euro. He said that if the trade war were to cause strong economic damage to the eurozone economy, they would automatically rethink QE.

Control of oil prices

President Trump has been talking a lot about controlling world oil prices. He talks about Saudi Arabia’s need to increase production and, during a press conference with Russian President Vladimir Putin, also raised the idea of regulating prices.

Now there’s good reason for Trump to worry. His administration’s plan to sanction Iran’s oil exports in November will create a significant decline in the world’s oil supply. Oil prices rising too fast have caused economic recessions in the past.

It has been speculated that Trump may attempt to exploit the U.S. Strategic Petroleum Reserve. The Trump administration is also pressuring international partners to release emergency stocks through the International Energy Agency.

The Strategic Petroleum Reserve is the world’s largest emergency oil storage facility. There are 660 million barrels stored in huge underground salt caves off the Gulf of Mexico coast.

Raw materials are becoming increasingly expensive for General Motors

This could cause the cost of a new car to rise.

The largest U.S. automaker said Wednesday that it is prepared for a larger-than-expected increase in commodity costs this year. More expensive raw materials and unfavourable exchange rates in Brazil and Argentina will cost to the Company $1 billion this year.

This increase led GM to cut back on its earnings outlook for the year, causing stocks to fall in their biggest one-day drop since November 2011.

The company is able to offset some of the cost impact by selling vehicles at higher prices this year.

Tariffs are about to affect consumers

The tariffs that the White House has collected so far have fallen mainly on industrial supplies and components of other goods.

That is about to change and consumers will feel the impact if tariffs are applied as planned.

Economists at the Société Générale estimate that the $200 billion being considered against Chinese goods will significantly increase consumer prices.

The world is on fire because of a variation in atmospheric currents

Record temperatures spread from Japan to Norway and further west to Texas. In the Arctic, mercury reached 30 degrees Celsius.

At least 170 people have died worldwide. The heat wave is driving up raw material prices.

The culprit is a weather system that weakens the currents that move through the upper atmosphere.

DISCLAIMER

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

1 Like

July 30, 2018

Asian markets were bearish in the wake of Wall Street

Asian equities fell on Monday, July 30, with markets following in the wake of the last Wall Street session. The focus is now on the Bank of Japan and other central banks meeting this week.

The BOJ is not expected to make any monetary policy changes. However, there is increasing speculation that the Bank of Japan may change its yield curve control adjustments, partly due to lower bank profitability and low inflation in Japan. The Federal Reserve will hold its two-day meeting on Tuesday and Wednesday, although not much is expected to happen.

The Nikkei 225 fell, with falls in utilities, energy and pharmaceuticals. In addition, the Kospi recorded losses as investors digested the release of good corporate earnings. The Hang Seng index fell, with the information technology and consumer goods sectors posting losses. The S&P/ASX 200 fell as most sectors traded in negative territory.

The negativity in the Asian session followed the drop in US equities observed on Friday. Business news in the United States overshadowed the release of solid data on the gross domestic product of the United States. The technology sector has played a major role in the downturns.

GDP in the United States grew by 4.1 per cent in the second quarter, in line with expectations, driven by higher consumer spending and corporate investment.

Intel shares fell in the previous session. The chip manufacturer announced delays for the latest generation chips. Meanwhile, Twitter sank after reporting a drop in the number of active monthly users. This contributed to a second day of heavy losses for the U.S. technology sector following Thursday’s drop in Facebook stocks.

The Dollar rallied against most of its major currency pairs on Monday in Asia, as concerns about a number of central bank meetings are expected. These meetings could set the direction for the currencies in the short term.

Oil prices were mixed in Monday’s Asian session, with the US benchmark WTI index rising after four weeks of declines. The consequences of trade tensions also weigh on energy markets.

Gold does not vary much in the early hours of the day. Currency movements and central bank meetings will be the focus of attention this week.

European markets are expected to open lower on Monday.

The Nasdaq is down more than 1%

U.S. stocks fell on Friday, July 27. The poor results of Intel and Twitter outweighed the strong growth reading for the U.S. economy.

The Nasdaq Composite fell 1.46 percent and is its biggest drop since June 27. The S&P 500 fell 0.7 percent, with technology stocks down 2 percent. The Dow Jones Industrials fell 76.01 points.

Technology stocks recorded their second consecutive day of heavy losses. On Thursday, the sector fell by more than 1.5 percent when Facebook had the worst day in its history. Intel and Twitter shares led the way on Friday, after the release of their latest quarterly results.

The drop comes after the Commerce Department said the U.S. economy grew the last quarter at its fastest pace since the third quarter of 2014.

Europe’s results and political climate withstand the collapse of social networks.

The positive atmosphere has been given by the future of the German index, along with the European index, which closed above the average of 200 sessions. The agreement between the United States and Europe, which reduces trade tension with regard to manufacturing, has been very well received. Some good business results are added to the news.

Facebook drags the hedge fund and its fall costs them 6,000 million

‘You don’t make 500 million friends without making some enemies’.

This is how one of the promotional phrases of the social network reads, in the film that tells the story of the uneven beginnings of one of the great technologies of today.

Zuckerberg’s biggest rival could be himself right now.

Social network stocks are the preferred choice of the U.S. stock market among these investment firms.

$120 billion evaporated from Facebook stock market capitalization in just 24 hours

The California-based company closed Thursday’s session with a 19% slump after posting its second quarter results.

Mark Zuckerberg was aware of the storm that was going to hit his company’s securities and, according to the records of the U.S. Securities and Exchange Commission, Zuckerberg sold some $3.5 billion in technology shares between April 5 and July 23.

First reading of the gross domestic product of the United States

It rose more than 4% in the second quarter, as expected, but some have pointed out that it is below what the market expected. One thing is what is said to the rest of the world and another is what is really expected.

The issue is that the tax cuts are being noted with a rise in consumer spending and with companies increasing investment, even with a slower pace than in the first quarter.

Year-on-year inflation is supported, but it is doubtful that the PCE in the quarter has fallen compared to the previous quarter.

The downside is that the Federal Reserve is continuing with its prospect of raising interest rates

There’s a lot of caution, because Trump already warned that he wasn’t comfortable with rate hikes. According to him, the Fed should devalue the currency.

If the macroeconomic data improves, we will see which position it wins in this contest.

The positive side is seeing the strong increase in exports and the minimal growth in imports, which has reduced the trade deficit.

DISCLAIMER

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

July 31, 2018

Asian markets were mixed as the Nikkei rose following Bank of Japan decisions

Asian equities showed a mixed tone on Tuesday, July 31, as investors assimilated the Bank of Japan’s decision to keep monetary policy stable. The result was also due to Wall Street’s losses amidst the weakness of the technology sector.

Central banks are the focus of investors’ attention, with the Bank of Japan relaxing its monetary policy. The Bank of Japan maintained its target for ten-year government bond yields at around zero percent. Overall, the strength of the yen and the rise in Japanese government bond yields have fuelled speculation that the Bank of Japan may change its policy of controlling the yield curve at this meeting. In the end, the BOJ may simply be looking for more flexibility to reach its inflation target rather than abandoning its commitment to monetary stimulus.

The Nikkei 225 entered positive territory thanks to the decision of the Bank of Japan. It rose thanks to the profits observed in the mining sector, in the transport sector and in the insurance companies. Profits and finances are down. The Kospi fell, after trading both above and below the flat line, with gains seen in the manufacturing sector. In Australia, the S&P/ASX 200 rose, with the energy sub-index at the top. Chinese stocks changed little after the release of the official PMI for manufacturing, which slightly exceeded expectations.

The mixed session in Asia came after the Wall Street stock market crash on the first trading day of the week. Sharp declines in major technology companies contributed to a 1.39 percent drop in the Nasdaq.

The Federal Reserve begins its monetary policy meeting on Tuesday morning and its decisions will be announced on Wednesday. The Fed is expected to keep interest rates stable at the end of its meeting.

The Dollar rose against the Yen on Tuesday after the Bank of Japan made a few minor adjustments to its monetary policy instead of making more drastic changes as some analysts expected.

Oil prices fell on Tuesday, recording its biggest monthly loss in two years, due to concerns about oversupply and after a report showed that OPEC production in July had reached its highest level of the year.

Gold prices rose during Tuesday’s Asian session. The Bank of Japan’s minor changes in its monetary policy and the difficulties in the U.S. technology sector were likely to influence investor sentiment.

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

All eyes are on the Federal Reserve meeting

Preliminary reading of the second quarter of the gross domestic product is still ticking down, growing by 4%.

Now all eyes are on this week’s Federal Reserve meeting. Due to strong growth, further interest rate hikes are expected.

Commodities have had the support of a weak dollar on Monday 30 July. Special emphasis has been placed on crude oil, which has been hovering around $70 a barrel and has been heavily influenced by comments that if there is no significant increase in production in the near future, there could be a surge in demand that will not be met, driving up prices. In addition, Baker Hughes’ recount of active oil installations has shown a slight upturn.

Sales have continued in the FAANG+, with falls of more than 5% in Twitter, Facebook and also Netflix, which lost 4%. There is speculation that social networks are now opting for a higher quality business and increased security.

The bad influence of technology continues but with eyes on central banks. There was a negative session on the European market on Monday 30 July. It hasn’t been positive at any point during the session, except for the Ibex 35 with a good performance of banks.

Baker Hughes Oil Facility Countdown

The Baker Hughes oil installation count offers an increase of two new installations, leaving the overall figure in the United States at around 1050. There has already been some stabilisation, as the gap with last year has narrowed to only 90 installations.

This is negative for the price of crude oil.

Geopolitical tensions, and movements in the currency market, may or may not be favourable to price.

At the moment, the $70 a barrel area is being touched.

Gold, silver and platinum are sinking

Precious metal accumulates a fall of 10% from annual highs, silver a fall of 13% and platinum a fall of 20%.

But this decline is not exclusive to so-called precious metals, as many raw materials are also suffering. Copper is down 17% or cotton is down 10%, among many others.

It has not been easy to find the excuse that explains, above all, what is happening with the gold.

It is not so much that the dollar is strong as the fact that expectations of rate hikes from the Federal Reserve remain intact. Rates hikes are making US Treasury bond yields more popular and rivalling gold.

Gold investors feel that they are no longer earning money and are more inclined towards debt than gold.

Elon Musk would resign from Tesla and join a new technology company Bitcoin

Real-life iron man Elon Musk announced that he is about to resign his position at Tesla to create a new business project that he believes will change the world more than Tesla, SpaceX and Solar City could.

The new project is a Bitcoin Transaction System. Although he didn’t have the idea, he invested several millions of euros that allow him to control all of Bitcoin Trader’s decisions.

Consumer confidence stabilizes in July in the euro zone and falls in Spain

Consumer and business confidence in the economy remained at the same levels as last June.

It fell by 112.1 points in the Eurozone and by 1.7 points in Spain, according to the ISE Economic Sentiment Indicator published by the European Commission.

In the European Union as a whole, consumer and business confidence rose by 0.1 points to 112.3 in the EU-27.

In Spain, the indicator fell to 107.7 points in July, driven by a decline in confidence in construction and industry.

DISCLAIMER

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

1 Like

August 1, 2018

Most Asian markets are rising amid hopes that China and the United States will reach trade agreements

Asian equities rose slightly on Wednesday, August 1, after news that the United States and China could resume talks on their trade dispute.

The Nikkei 225 advanced, with steel manufacturers and the various product sectors leading the way. Car manufacturers also traded higher amidst the Yen’s stability. In South Korea, Kospi won with the mixed technology sector. Some Apple suppliers were strengthened after the iPhone manufacturer surpassed earnings expectations. Chinese stocks rose, as investors digested headlines on trading and following the release of the unofficial survey of Chinese manufacturing activity, which met expectations. The Australian S&P/ASX 200 index was below the flatline as gains in materials were offset by declines in the strongly weighted financial sub-index.

Representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private talks to resume trade talks in an attempt to avoid a trade war.

Slight gains in Asia came after Wall Street advanced on Tuesday, which was also the last trading day of the month. In July, U.S. stocks recorded their highest monthly gains since January, amidst strong corporate performance and good economic data.

The Chinese yuan fell, and the Australian dollar also fell, during Wednesday’s Asian session in response to a report that the U.S. administration will propose to raise its projected tariffs on Chinese imports to 25 percent. The Yen rose slightly, but remained on the defensive after the Bank of Japan committed to keeping interest rates low for a long period of time and to being more flexible in its control of the yield curve.

Dollar gains before Federal Reserve monetary policy meeting ends. Trade-related news also supported the Dollar.

Oil prices fell on Wednesday after data showed that U.S. oil reserves rose unexpectedly.

Gold prices remained stable on Wednesday in Asia after falling to a two-week low, as investors waited for the results of the Federal Reserve’s monetary policy meeting.

European markets are expected to open Wednesday’s trading session lower.

Future U.S. stock markets rose

Bloomberg has made it public that the United States and China are looking for new meetings to avoid an all-out trade war.

The Dow and the S&P 500 are up on the last day of July and have their best monthly results since January.

The Nasdaq had their first consecutive losing streak in three sessions in almost three years. The biggest drop in technological actions in recent times was led by Facebook, with almost 22 percent of losses in three sessions.

The United States and China are looking for each other and the market is encouraged. A session in Europe that ends on a positive note on Tuesday 31st July, a day in which there have been a lot of macroeconomic factors that have given rise to an exciting development of events.

There is concern in the market because, as inflation rises, growth weakens. This creates a nightmare situation if the European Central Bank is forced to make funding more expensive.

Eurozone inflation rises to 2.1% in July

The annual inflation rate in the euro area stood at 2.1% in July. It is one tenth above the previous month’s reading and represents the largest price increase since December 2012.

The rise in prices in July reflects a 9.4% rise in energy costs.

Eurozone GDP moderates its expansion to 0.3% in the second quarter

GDP growth in the euro area came to a halt in the second quarter. It represents a one-tenth slowdown compared to the 0.4% expansion seen in the first three months of 2018. It represents the slowest growth rate of the euro area countries since the second quarter of 2016.

Compared with the second quarter of 2017, the euro area economy recorded an annual expansion of 2.1%, four tenths less than in the previous quarter, thus experiencing its weakest reading since the first quarter of 2017.

Across the European Union as a whole, GDP grew by 0.4% quarter on quarter. It is in line with the first three months of 2018.

The market is starting to calculate whether there’s a trade war or not

The Russell 2000, a small and medium-size company, is the fastest growing in the United States.

If the trade war is not fought, we would be talking about greater growth prospects and more possibilities for central banks to speed up interest rate increases.

It remains to be seen where the increase in the cost of financing begins to damage economic growth.

In the United States, consumer confidence improved further

In this case, this is the Conference Board’s figure of 127.4. It’s above expectations to go down to 126.

The one-year inflation expectation rises from 4.9% to 5.1%. These one-year inflation prospects give us food for thought.

This is positive for the economy, positive for the market, positive for the dollar and negative for bonds.

DISCLAIMER

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

August 2, 2018

Asian markets have been in a downward spiral amid new concerns over trade relations between China and the United States

Asian markets fell on Thursday, August 2, after a mixed session in the United States where renewed trade concerns offset strong technology gains.

Japan’s Nikkei 225 fell. In Australia, the ASX 200 benchmark index was down, while the materials sub-index was the worst. In addition, the big mining companies are weakening. The markets in South Korea and China also declined.

The Trump administration announced that it is considering a 25 percent tariff on Chinese imported goods worth $200 billion, compared to the initial 10 percent previously announced. This comes after China said that blackmail will not work with them and that they will retaliate against the United States if additional trade measures are imposed.

The Federal Reserve concluded a two-day meeting on monetary policy and kept interest rates unchanged. Wednesday’s decision was a long-awaited one and the central bank improved its view of the economy, describing it as strong. This appreciation strengthens the option of raising rates in September and leaves the door open for another in December. It will depend on data and Trump’s tactics.

The Bank of England is expected to raise interest rates on Thursday, despite uncertainty about what the Brexit could mean for the UK economy.

The U.S. dollar continued its bullish trend against most of its major counterparts on Thursday, after the Federal Reserve made an encouraging assessment of the world’s largest economy and remained firm in its stance to gradually raise interest rates.

Oil prices rose on Thursday, recovering some of the losses of the past two days. The rise was largely due to the increase in U.S. crude oil inventories, along with concerns about U.S.-China trade frictions.

Gold rose sharply on Thursday’s Asian trading session, following the Federal Reserve meeting and the strength of the dollar.

European markets are expected to open lower on Thursday.

Federal Reserve’s decision

Moderate purchases on Wall Street prior to the Federal Reserve’s decision.

Moderate purchases on Wall Street on Wednesday, August 1, pending the Federal Reserve’s announcement of its latest monetary policy meeting. In addition, investors are looking closely at the latest international trade-related news following the announcement that new tariffs may be imposed on China.

At a time when the Fed meeting is coming to an end, the market is looking forward to the conclusions that may be announced by the body chaired by Jerome Powell. Although analysts do not expect an increase in interest rates, they are awaiting possible changes in the statement to try to anticipate whether there will be a rise in interest rates in September.

Fear of the trade war remains high. Negative session in Europe on Wednesday 1 August. The euro has had problems on all fronts. There have also been sharp declines in secondary market debt prices.

The final reading of the Manufacturing Purchasing Managers Indices for Europe, the UK and China has been released. It is noted that the majority are declining.

Apple sets record highs and caresses the trillion dollars

Apple shares have hit a new record high of $199.26. The technology giant’s securities lead the gains on the New York Stock Exchange, after the Company surpassed consensus expectations with its quarterly results.

Apple has found that the way to continue to drive profit growth is to squeeze higher margins out of its sales at higher prices.

It’s working and profits are flowing despite concerns that iPhone sales growth has peaked.

Brexit would hurt 7,000 European funds in the UK

Some 7,000 investment funds, domiciled in Europe with British clients, could suffer from the Brexit unless the European Union changes its position once the Brexit is formalised.

In a recent presentation by UK negotiators with their counterpart in Brussels, the British warned that Europe’s financial interests in the UK could also be jeopardised.

Weekly crude oil reserves rise but not as much

The API was right on the address but not on the number. Weekly crude oil reserves rose by 3.8 million barrels, when a fall of 2.74 was expected. The data is negative for the price of crude oil.

Despite the fact that Iran’s ability to bring crude oil to the market has been greatly affected by the sanctions imposed by the United States and by the problems experienced by other major producers such as Venezuela, it seems that the OPEC countries are complying with what was announced in June.

They have begun to relax the restrictions on pumping that they have also agreed with other major producers, such as Russia. Now the perspective of the ghost of oversupply is there.

U.S. Manufacturing ISM disappoints

The US Manufacturing ISM for July leaves a reading of 58.1. It’s down from 60.2 and worse than expected it was only down to 59.5.

The rate of new orders also fell from 63.5 to 60.2. This is bad news for the medium term.

DISCLAIMER

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

2 Likes

August 3, 2018

Asian markets are cautious amid growing tensions between China and the United States

Asian equities traded on a mixed basis on Friday, August 3. Earnings from technology stocks in the U.S. have been decisive, with Apple being the first U.S. company to reach $1 trillion in capitalization.

The Japanese Nikkei 225 rose, led by the transport equipment and automobile sectors. In South Korea, the Kospi was bullish with the manufacturing sector showing gains. The Australian stock market rose slightly.

Chinese stocks also suffered. The cautious mood came amidst rising trade tensions between the United States and China. The Trump administration said it is considering increasing proposed tariffs on Chinese imports from 10 percent to 25 percent. China responded by saying that it was fully prepared to defend the interests of the people and free trade.

Wall Street ignored trade tensions and closed on Thursday with positive sentiment, driven by technology stocks.

European equities are expected to open mixed on Friday, with a comfortable spread after the Bank of England’s interest rate hike and the valuation of technology giant Apple.

The Dollar rose against most of its major counterparts on Friday, reaching a 14-month high against the Yuan, as markets were affected by U.S.-China trade tensions.

On Friday, oil prices remained stable, supported by traders who placed new hedges on the futures market. A possible increase in global supply has slowed down the increases.

Gold has undergone few changes during Friday’s Asian session, after touching lows in the previous session.

European markets are expected to open a mixed session on Friday.

U.S.-China trade tensions escalate

Losses at Wall Steet as U.S.-China trade tensions escalate.

Wall Street recorded losses on Thursday, August 2, while the market is fearful of worsening trade tensions between China and the U.S. This comes after the US President announced his intention to raise tariffs on products from the Asian country to 25%.

Negative session in Europe on Thursday 2 August, where there is a very bad mix of disappointing business results, rising trade tensions and an unflattering technical aspect.

An additional 1,000 jobless claims in the U.S. but still at a low level

This promotion was somewhat less than analysts expected.

The average number of applicants for the subsidy last month, the most reliable indicator of labour market performance, fell by 3,500 to 214,500.

Claims for unemployment benefits have been 178 consecutive weeks below the 300,000 mark, a sign of a healthy U.S. labour market.

Trump proposes 25% tariffs on Chinese goods valued at $200 billion

The US president has proposed to impose 25% tariffs on Chinese products worth $200 billion. They are mostly consumer goods.

Before Trump’s proposal was made public, the Chinese government claimed that the blackmail and pressure that the US is trying to exert on its exports will not work.

Bank of England raises rates to 0.75% but no rush to the next high

Rates in the UK are at 0.75%, up from the previous 0.5%. It was an expected move.

There has been no disagreement, because all nine voters have voted to raise interest rates and also to keep the quantitative programme unchanged.

With regard to forecasts, they say that the long-term trend is between 0% and 1%. This would be equivalent to a bank rate of between 2% and 3%.

They warn again that the economic outlook could be significantly influenced by the exit of the European Union.

They also warn against protectionism. They warn that such policies are beginning to have an adverse effect.

Tesla goes up on Wall Street

Tesla’s shares are up more than 10% shortly after the start of the session on Wall Street.

They do so after he announced his second quarter results at the close of Wednesday’s session.

DISCLAIMER

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

1 Like

August 6, 2018

Asian stocks are rising with China somewhat behind after the latest threat of new tariffs

Asian equities advanced on Monday, August 6, despite the fact that trade returned to the forefront after China announced another set of tariffs on U.S. goods and as investors digested the move by the People’s Bank of China to stabilize the yuan.

The Nikkei 225 has made some moderate gains. Increases in the steel and telecommunications sectors were offset by declines in most other sectors, including banks and other product manufacturers. In South Korea, the Kospi rose slightly. The steel mills were the best. The S&P/ASX 200 advanced, with the materials sub-index being the best. In Hong Kong, the Hang Seng index rose, after closing down for the last five consecutive sessions. All sectors traded higher, with progress led by gains in information technology, conglomerates and finance.

The increases observed in Asia, along with the declines in China, came after the new tariffs on US products, announced by China on Friday, brought the trade dispute between the two countries back into focus. However, Beijing is more concerned about internal affairs than its trade war with Washington.

In recent months, the trade war has been used as an excuse to get out of all the emerging markets.

The Dollar held steady against most of its major currency counterparts on Monday after U.S. employment data reinforced expectations that the Federal Reserve will gradually raise interest rates this year.

Oil prices rose on Monday, as Saudi oil production fell dramatically in July and US shale drilling seemed to stagnate.

Gold prices rose sharply on Monday’s Asian trading day after hitting a 17-month low, while concerns about the US-China conflict remain high.

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

Dow Jones up

Dow Jones up 0.5% on China’s employment and tariff data.

Wall Street ends Friday, August 3, with gains of close to 0.5% for the Dow Jones and S&P500. Very slight 0.12% for the Nasdaq. The market has hardly reacted to the latest US employment report and the announcement of new tariffs by China.

Investors expected the creation of 194,000 jobs and a drop in the unemployment rate to 3.9% from the previous 4%. Real data have shown the creation of 157,000 jobs and an unemployment rate of 3.9%. In addition, the hourly wage worked has risen 2.7% year-on-year, in line with forecasts.

Overall, the data indicate a robust labour market, with an economy growing above average. However, moderate wage growth casts doubt on the Federal Reserve’s assumption that the economy is in full employment and the need to raise interest rates.

Was a bullish session in the European market on Friday 3rd August, with all the supersectors growing. Practically the entire session in Europe has gone above Thursday’s lows, awaiting the US employment figure.

Macroeconomic data such as the final purchasing managers’ indices for the euro area services sector, for example, have not helped.

There is a ‘zero’ commitment between the United States and China

The market had jumped, earlier in the week, with reports that the United States and China were negotiating again.

In fact, in recent days there had been a high-level telephone call that had not provided a solution and that had followed a one-month period of silence between the two countries.

Non-Farm Payrolls increase by 157,000 new jobs

Growth slowed in July, after two robust months. However, the unemployment rate fell and the overall picture remains strong.

Total non-agricultural payrolls rose below the 190,000 expected jobs. The unemployment rate fell to 3.9 per cent, as expected, and is around its lowest level in almost 50 years.

Hourly earnings also met expectations, increasing by 2.7 percent compared to the same period last year.

The Federal Reserve is keeping a close eye on the wage component as it seeks to reach its 2 percent inflation target.

Trump Administration Sanctions Russian Bank and North Korea

They are doing it for illegal financial activity.

Agrosoyuz Commercial Bank, registered in Russia, was sanctioned for doing business with Han Jang Su. According to the US Treasury, he was the principal representative in Moscow of the Foreign Trade Bank, which is North Korea’s largest foreign exchange bank.

For the time being, U.N. and U.S. sanctions will continue to be applied, closing off sources of illicit revenue to North Korea.

According to the Trump Administration, its sanctions will remain in place until the final and fully verified denuclearization of North Korea has been achieved.

Economic growth in the euro area slows down at the start of the third quarter

The pace of economic growth in the euro area slowed in July and lost most of the momentum it had gained in the previous month.

The composite PMI is 54.9 compared to June’s 54.3. This is due to the slowdown in the services sector, which has had its second lowest reading in the last year and a half.

Manufacturing output grew at a slightly faster pace and was similar to the pace of activity in the services sector.

While all countries continue to grow, the pace of expansion has lost momentum. Germany is improving to a four-month high, although it is not offsetting the slowdown in the economies of France, Italy and Spain.

DISCLAIMER

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

1 Like

August 7, 2018

Asian markets are mostly bullish despite trade uncertainty

Most Asian equities rose on Tuesday, August 7, after the region’s markets fell in the last session. Nervousness over U.S.-China trade tensions weighed on investor sentiment after Beijing threatened retaliation last week.

Japanese equities rose, with most sectors in positive territory. The best was the telecommunications sector. The South Korean Kospi was upward, with technology being the best sector. Chinese stocks rose, after Monday’s crash. Hong Kong’s Hang Seng index rose, with both energy and real estate leading the way.

Australian equities eased before the Reserve Bank of Australia decided to keep interest rates unchanged. The S&P/ASX 200 index fell, with the materials and telecommunications sectors being the worst.

Asia’s mixed results came after U.S. equities rose in Monday’s trading session. Investors put trading uncertainty aside and focused on the good news about corporate performances.

The pound remained fragile during Tuesday’s Asian session after falling to a minimum of 11 months against the dollar in the previous session. The drop is due to concerns about a tough Brexit and while trade tensions between the U.S. and China supported the dollar.

Oil markets began cautiously on Tuesday, as many traders in Asia were reluctant to take new positions before the imminent introduction of U.S. sanctions against Iran.

On Tuesday, gold prices rose, but the strength of the dollar and expectations of further interest rate hikes in the United States limited interest in the precious metal.

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

Technology is starting to advance on Wall Street

The week begins on Monday, August 6, with a poker face looking at the trade war. Last Friday China replied to the US intentions to raise tariffs to 25%. They say that the Americans have lost their heads and the difference in tariff figures is a good example of this.

Bullard of the Federal Reserve has set Australia as an example of a country without a recession for more than 20 years. He is trying to say that having a good and broad economic streak does not mean that a crisis will soon appear. This has done the dollar a lot of good.

The currency market draws attention. The dollar is gaining a little more strength on Monday, August 6, supported by negative factory orders in Germany.

If we look at the market from the inside we find that most of the supersectors are in positive, with the automotive and parts sectors as the best of all. On the other side of the table we have basic resources like the worst, followed by banks.

Asia-Pacific Cooperation

United States Announces $300 Million Investment in Asia-Pacific Cooperation.

The head of U.S. diplomacy, Mike Pompeo, said the investment will serve to strengthen cooperation in security, maritime security, humanitarian and peace work and to fight transnational crime.

U.S. Sanctions on Iran Return

On 4 November there will be sanctions and no one will be able to buy Iranian crude oil.

That’s why there have been talks between the U.S. and OPEC members to try to convince them to increase production and make up for the 2.8 million barrels a day that will be missing.

Now there are news, from within the US administration, about this Tuesday some sanctions will already be imposed on Iran in order to put enough pressure on it to reach a new nuclear agreement.

Euro/Dollar recovers positions and is a bad new

Automotive and spare parts moves away from the day’s highs as the euro/dollar moves away from the day’s lows.

It must be watched, because regaining altitude in the euro is not good for Europe, as we have seen from the reactions in the markets.

Brexit negotiations

The British Secretary of Commerce has said that there is still a possibility that there will not be an exit agreement from the European Union.

According to the British, Europeans are very closed-minded and intransigent.

A spokesperson for the Prime Minister has tried to soften the blow by saying that everyone is still working against the clock to reach an agreement.

However, he insists that everyone should be prepared in case no agreement is reached.

DISCLAIMER

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

2 Likes

August 8, 2018

Asian markets are mostly bullish after the good corporate results in the United States

Asian equities traded mostly higher on Wednesday, August 8, following gains on Wall Street after good corporate results.

The Japanese Nikkei 225 rose, with the shipping sub-index leading. Telecommunications and finance also experienced an increase. In Australia, the S&P/ASX 200 rose, with gains in the financial sub-index strongly weighted. Hong Kong’s Hang Seng index rose, with energy-linked stocks trading higher.

Data released during the session showed that China’s trade surplus with the United States fell to $28.1 billion in July, while the trade dispute continued. This is lower than the previous figure of 28.9 billion dollars in June.

Concern about the trade dispute is easing, for now. The current positive sentiment comes despite China saying last week that it was preparing tariffs of between 5 and 25 percent on some $60 billion in US imports.

The Chinese currency has weakened against a basket of currencies. The U.S. dollar fell against most of its major counterparts on Wednesday, as the yuan rose to its highest level in a week.

Oil prices remained stable during Wednesday’s Asian session. They were supported by a report on the increase in oil inventories in the United States, as well as by the introduction of sanctions against Iran.

Gold prices remained stable on Wednesday after rising in the previous session, as the U.S. dollar fell against the Chinese yuan and the euro.

European markets are expected to open Wednesday’s session higher.

Wall Street continues to rise

Wall Street continues to rise and the S&P 500 is approaching its historic highs.

Wall Street recorded moderate gains on Tuesday, August 7, allowing the S&P 500 to approach its historic high on January 26. The day is marked by some easing of trade tensions between China and the United States.

In the commodities market, oil continues to advance thanks to the first round of sanctions imposed by the United States on Iran. Donald Trump has said that restoring sanctions means that anyone who does business with Iran will not do business with the United States. ‘I ask for nothing less than WORLD PEACE’. The count of oil installations created by Baker Hughes has remained rather sluggish since May.

The Dollar is taking a step backwards and that is helping raw materials to take a step forward. As a result, basic and oil resources are the best in Europe and the same could happen with the energy and materials sector in the SP 500.

European Central Bank forecasts that wage growth will drive inflation

The European Central Bank says in its latest economic bulletin that wage growth will create upward pressure on prices.

In the current forecasts and projections, a rise in labour costs is considered an important condition for a sustained increase in core inflation.

The ECB has been stressing for months that a very expansionary monetary policy is still needed to raise core inflation.

German industrial production falls in June

German industrial production fell by 0.9% in June compared to the previous month.

Within the industrial sector, the production of consumer goods fell by 1.6% and that of intermediate and capital goods by 0.8% and 0.6%, respectively.

The industrial production situation gained new momentum in the second quarter of the year, both in the industrial and construction sectors. It does so after stagnation in the first three months of 2018 as a whole.

However, the recovery is slower than last year and forecasts suggest that this momentum will continue at a moderate pace.

EU takes steps to protect its companies in Iran

The European Union is implementing a series of measures to limit the impact of US sanctions on European companies that have relations with Iran.

Among these measures is the so-called ‘blocking statute’, which opens the door to claiming damages.

Brussels has updated its legislation to reassure investors about the concerns of European companies doing business in Iran.

Federal Reserve needs to return to normal

They are aware that if the current situation stagnates, when the next crisis comes, their hands will be much tied and they will not be able to use normal weapons such as lowering interest rates or getting to buy assets in trouble.

This means that if the rates are very low they will not be able to lower them much more in the next crisis. If the balance sheet is too large, they will not be able to buy anything else.

So they have to raise interest rates and clear the balance sheet, so that the Fed can be effective again the next time it is needed.

Upon emptying the balance sheet rivers of ink are running. Many are those who believe they will not be able to get rid of everything they have bought at the speed the Federal Reserve believes. Selling all the assets they have involves flooding a market that is not interested in buying something that you know has no future possibilities.

Therefore, it is essential that inflation and economic growth accompany, to try to camouflage the reduction of the balance sheet within a situation of growth.

DISCLAIMER

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

1 Like

August 9, 2018

Asian markets are bullish with Chinese stocks rising

Asian markets traded mostly higher on Thursday, August 9, with mainland China’s indices rising by more than 1 percent.

In Australia, the ASX 200 also climbed with the energy sub-index reversing its initial losses.

On Wednesday, Chinese data showed that the country’s exports in July rose 12.2 percent year-on-year. They exceeded analysts’ expectations for growth of only 10 percent. The July data was the first reading since U.S. tariffs on Chinese imports entered into force earlier that month.

The Yen rose to a nine-day high on Thursday in Asia, as the Bank of Japan is expected to soon abandon its monetary policy. In the other currency markets, the New Zealand dollar fell as its central bank was cautious about its monetary policy and did not change interest rates.

Although the threat of trade war is still alive, traders expect Thursday’s main event to take place in Washington. There, Japan will enter into talks to avoid tariffs on its automobile exports. It will advocate the development of a bilateral free trade agreement with the United States.

Washington said Wednesday it would impose further sanctions on Russia in late August after it determined that Moscow had used a nerve agent against a former Russian agent and his daughter in Britain. On the other hand, the United States is not prepared to wait too long for North Korea to take steps toward denuclearization.

Observers continue to appreciate that the U.S. economy is strong enough to justify further interest rate increases by the Federal Reserve.

Oil prices rose on Thursday, after heavy losses in the previous session. The escalation of the China-U.S. trade dispute with official Chinese data indicates that energy demand from the world’s largest importer has yet to regain its strength.

Gold price remained stable in the early hours of Thursday morning, as the Dollar rose against the Yen.

European markets are expected to open mixed on Thursday.

Gentle falls on Wall Street

Wall Street recorded moderate sales on Wednesday, August 8, while the S&P 500 and Nasdaq are close to their previous highs.

The market behaves shyly on a summer day when there is not much movement.

The intensity of the trade war increases and the market is afraid again. It was a negative session in the European market on Wednesday 8 August, where raw materials have once again played a leading role. It is because China has met its threat and is taking a step forward with new tariffs.

In Italy, the downside has been a downward revision of growth prospects and an increase in the deficit. This may burden the country’s accounts and increase the confrontation with Europe.

Weekly oil reserves

Weekly crude oil reserves in the United States fall by 1.35 million barrels, almost half of what was expected and far from what the API was pointing to.

Gasoline improves 2.9 million. Compensating for last week’s decline.

Distillates are up 1.23 million and still rising after last week’s improvement.

The figure is bullish for the price of crude oil.

China’s exports rose more than expected in July

Chinese exports rose, despite U.S. tariffs.

Washington will begin introducing tariffs of 25 percent on another $16 billion on Chinese products by the end of this month.

Wednesday’s data shows a reduction in China’s trade balance advantage over the U.S. economy.

They provide the first readings of the trade landscape of the world’s second largest economy after the first imposition of tariffs.

Why Trump’s Republican Party fears midterm election

Trump and the Republican Party face grim prospects in the midterm elections.

Democratic and Republican Party strategists believe Democrats are likely to win the 23 seats they need to claim a majority in the House of Representatives.

That would allow Democrats to block Trump’s legislative agenda, initiate oversight investigations and explore impeachment procedures.

Elon Musk wants to privatize Tesla

Tesla’s stock has moved strongly during the week, after Elon Musk said he hopes to privatize the Company.

Tesla’s market value would currently be about $71 billion.

Musk has indicated his desire to privatise the electric vehicle manufacturer in line with a November 2017 statement that ‘it actually makes us less efficient to be a public company’.

DISCLAIMER

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

1 Like