Varchev Finance: Trading day in one post – 04.07.2018

Asian stock market –  Today markets were trading mixed. Japan’s Nikkei 225 fell 0.43 percent while in South Korea Kospi rose 0.25 percent. Australia’s ASX 200 fell 0.34% and the IT sector dropped. Hang Seng in Hong Kong is trading close to the opening price, while Shanghai composite declines by 0.16%.

FX market – after better data from Australia and China risk appetite returned and AUD and NZD rose. There may be short-term resistance correction in AUD and NZD, with current data not going to be enough to change the bearish trend. Because of the day off in the US we can expect low volatility on the FX market. At 10:55 pm, we expect PMI in the service sector in Germany and the Eurozone. Data from the UK will affect the market today, we expect at 11:30 PMI in the service sector. At 13:55, we expect the speech of Victoria Saporta, BoE member, expecting it to confirm the Central Bank’s position on tightening monetary policy.

Bank of England may surprise the markets with a faster rise in interest rates

Against the backdrop of mixed sentiment in Asia, the JPY rose as I expect today to stay behind because of low liquidity.

Commodities market – increased oil production from Saudi Arabia, Russia, UAE and Kuwait will not be enough to balance the market. We should not forget that on Saturday, Trump said that King Salman has agreed to increase crude oil production to nearly 2 million barrels. In this way, the world’s largest oil consumer will compensate for the lack of supply from Iran and Venezuela. Saudi Arabia is the largest oil exporter in the world and the largest producer in the Organization of Petroleum Exporting Countries (OPEC). A week ago, OPEC and its allies, including Russia, agreed to increase supplies. Iran has urged other OPEC members to “refrain from any unilateral action”. At gold, the price stopped at horizontal support, then reversed in the upward direction.

GOLD – an option for long of key levels

European stock market – moods before the opening of European markets are positive. DAX will open 11 points higher, UKX will open 2 points higher, CAC will open at the closing price. Donald Trump’s threat that he will impose tariffs on EU car imports may trigger a response from Brussels. Trump’s commercial policy has already caused tensions in steel and aluminum. On Sunday, Trump compared European countries with China in terms of trade with the United States. We expect declines in the automotive sector to continue.

US stock market – US markets closed down due to the escalating relationship between the US and their trade associates and the downsides in the technology sector. Dow declined by 0.54% to 24 174.82 points. The big reason is Apple’s depreciation of over 1.5%. The S & P 500 ended with a fall of 0.49% to 2713.22 points, as the technology sector dropped by 1.4%. Nasdaq composite declined by as much as 1% due to Micron’s and Facebook’s decline of 5.5% and 2.4%, respectively. Today US markets will remain closed due to Independence Day.

Economic Calendar for European and US Stock Sessions:
Holiday day in the USA
10:55 Germany – PMI services
11:00 Europe – PMI Services
11:30 UK – PMI Services
13:55 UK – speech by Victoria Saporta, BoE member

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