Varchev Finance: Trading day in one post – 05.07.2018

Asian Stock Market – today investors are cautious due to the deadline for charging US and China tariffs. Shanghai composite declined by 0.07% and the Hang Seng Index remained at approximately constant levels. In Japan, the Nikkei 225 declined by 0.16% due to a drop in oil, banking and commerce.


FX market – risk appetite continues and NZD rises again, and AUD is down. Short-term resistance adjustment for AUD and NZD is possible as current data will not be sufficient to change the bearish trend. Today we expect high volatility due to the end of the weekend in the US. During the European session we will expect: at 13:00 Gov Carney’s speech is a member of the BoE, and 15:15 is the speech of Mersch member of the ECB. From the American session we will expect the data from 15:15 to change employment ADP and 17:00 PMI no production index. We will monitor the escalating relations between the US and the leading economies of China and the Eurozone.

Germany responds to US sanctions

Against the backdrop of the mixed sentiment in Asia, the JPY rose as I expect today to increase 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. At gold, the price stopped on horizontal support, then reversed in the upward direction, which we expect to continue today.


European stock market – we expect Europe’s response to US sanctions by the end of the week. Trump’s commercial policy has already caused tensions in terms of cars, 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. Today, the economic calendar lacks important news to influence the stock market. That’s why we expect the market today to be driven by speculation about the war.


US stock market – US markets closed down due to the escalating relationship between the US and their trade associates. Today, US indices return after weekends. We expect high volatility and an increase in US indices. Investors are now awaiting the minutes of the Fed’s last meeting. Although no surprises are expected, traders will be able to get a close look at the central bank’s analysis of the economy, thus drawing valuable insights and forecasts about inflation and future interest rises. Expectations for the moment are for another two rises in interest rates this year and at least one in the other. Any change from this plan can be reflected in sharp movements of forex and stock markets.


Economic calendar for the European and U.S. trading sessions
09:00 Germany – Factory Orders
13:00 UK – BoE Gov Carney Speaks
15:15 USA – ADP Nonfarm Employment Change
15:30 USA – Initial Jobless Claims
16:45 USA – Markit Composite PMI
17:00 USA – ISM Non-Manufacturing PMI
18:00 USA – Crude Oil Inventories
21:00 USA – FOMC Meeting Minutes

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