Varchev Finance: Trading day in one post – 06.07.2018

Asian Stock Market – Asian markets were trading mixed with investors reflecting the development of the trade war, whose tariffs come into force today. The Nikkei 225 jumped 0.57%, mainly due to the automotive sector that has begun to breathe in the last few days. China’s markets have been downsizing in view of the sharpening trade relations between the US and China. Earlier today, it became clear that Donald Trump is ready to impose additional tariffs against China worth over $ 500 billion. This contributed to the decline of Hang Seng by 0.31%, Shenzhen by 0.2% and Shanghai composite by 0.41%. In Australia, ASX200 rose 0.38%, with growth being driven by the telecommunications sector. Kospi fell 0.17%, mainly due to Samsung’s bad news and a fall of nearly 3%.

FX Market – The Forex market remained calm during the Asian session, with no significant movements in major currency pairs. The reason is clear, investors expect data on new jobs in the US today at 15:30. Official data is expected to be lower than the previous one, with 200,000 against 223,000 in May. As we know, better data than forecasted will lead to a USD growth, a worse, to a downside. With better data, I expect the EUR / USD to re-test the support area that the bulls approved at the end of the week. For worse data, the growth of EUR / USD is likely to continue. Taking into account the much worse GDP data that was posted this week, I expect any bad data for the NFP to have a detrimental effect on the USD. In the long run, the US dollar may be a hostage to the strong economic data the US economy has recorded in recent months.

Goldman Sachs optimistic for NFP today

Commodity Market – Petrol was again and continues to be in focus for traders. Currently, the oil market remains divided into two – Iran vs. the rest of the world. Late last night, Donald Trump again criticized OPEC with a post on Twitter – “The OPEC Monopoly must remember that gasoline prices are jumping, and they are doing little to help.” On June 30, Trump, talks with Saudi Arabia to increase the country’s production of 2m barrels a day or twice as much as the OPEC + agreement reached a yield increase of up to 1m barrels per day, and earlier it became clear that Russian oil companies are also discussing a rise in yields in the country. At the other end, Iran threatened to stop 30% of oil worldwide deliveries.

Iran threatens to stop 30% of world oil supplies

What to expect on the oil market in the short term

Gold managed to stay above the weekly support zone, and if the price close near current levels, we will have enough criteria to consider long-term long positions.

US Stock Market – After the weekend of Independence Day stock exchanges, the indices started trading with strong growth, driven by information that the US and the EU soften their positions on car duties. Today until 15:30 the markets will remain cautious, and then I expect increased volatility. Dow jumped 180 points, or + 0.75%. Health and technology companies supported the SP500 with 0.86%. Technological Nasdaq rose by 1.12% mainly due to the rise in shares of Facebook, Amazon, Netflix and Alphabet.

European stock market – The tone between the US and Europe will lead to a positive start on European markets. Given the chance that car duties will not be introduced on both sides, I expect the automotive sector to recover. It is good to head to automotive companies where Intraday profitability will be the best. Futures of European indices indicate positive start. The German DAX will open about 50 points higher, at a price of 12518 euros. The French CAC40 will open with a gap of 20 points higher and the UKX with about 15 points.

Economic Calendar for the European and US Stock Trade Session – 06.07.2018

09:00 Germany – Industrial production

10:30 UK – Halifax Price Index

15:30 US – Non Farm Payrolls

15:30 US – Unemployment rate

15:30 US – Average hourly wage

15:30 Canada – Unemployment Rate

15:30 Canada – Trade Balance

20:00 US – Baker Hughes Oil Rig Count

 Trader Petar Milanov

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