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Asian Market Update – Monday: Asian Shares Point Higher Ahead of a Big Week in China

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Communist Party Congress

The Big Question: How will Asian markets respond to China’s big meeting this week?

Major Asian equity markets were trading higher during Monday morning’s trading session, as investors turned their focus on a big week in Beijing where the twice-in-a-decade Communist Party Congress is scheduled for later this week.

Also, in the short-term, investors are closely watching China’s inflation data for September, which is set to be released on Monday. Other data for the world’s second-largest economy is also expected this week.

In China, the Shanghai Composite Index was slightly down before midday – 0.11 percent lower at about 3,386, after earlier gains that brought the index to around the 4,000-level. The CSI 300 Index, which tracks the 300 largest companies listed in Shanghai and Shenzhen, was up 0.17 percent to 3,927 before midday.

In Hong Kong, the Hang Seng Index edged up 0.81 percent to 28,707 before midday.

In Japan, the Nikkei 225 was up 0.63 percent to 21,288. After surging above the 21,000 level on Friday, the Nikkei continues to show strong momentum on Monday, having posted gains for the ninth straight day that have brought the benchmark to decade highs.

In South Korea, the Kospi gained a slight 0.13 percent to around 2,476 shortly before midday.

Down Under, the ASX 200 also added 0.62 percent to around 5,850.

With investors awaiting the release of China’s CPI and PPI data for September later on Monday, analysts at Guangda Securities expect CPI growth rate to slow to 1.6 percent and PPI to remain flat at around 1 percent.

The Chinese economy is expected to post strong growth this year, according to the chief of China’s central bank, Zhou Xiaochuan. He further said the full-year GDP growth could reach 7 percent this year.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 21,288 0.63%
China-Shanghai Composite Index 3,386 -0.11%
China-CSI 300 3,927 0.17%
South Korea-KOSPI 2,476 0.13%
Hong Kong –Hang Seng 28,707 0.81%
Australia-ASX 200 5,850 0.62%

Cryptocurrencies

Prices of cryptocurrencies were in a mixed mode overnight during the Asian trading session on Monday, with bitcoin and litecoin seeing slight losses and ethereum gaining.

At midday in Asia, the price of bitcoin was down 1.47 percent to $5,596. Bitcoin has remained steady above the $5,000 level after surging past that level on Thursday. On Sunday, the virtual currency lost more than $400 after falling from about $5,820 to just north of $5,400.

Ethereum surged 4.4 percent to about $350 around midday in Asia. The virtual currency’s price has showed strong momentum since Friday, when it surged from below $300 to about $345. A slight correction was seen on Sunday, but the price has now more than made up for the losses yesterday.

Litecoin lost about 2.12 percent to $64 at midday. Litecoin has been trading relatively stable around the $60 level.

Currencies

The Japanese yen lost 0.09 percent the US dollar at midday Thursday to 111.91 per dollar.

The Chinese yuan gained 0.02 percent against the US dollar at 6.5750 per dollar.

The Australian dollar lost 0.30 percent on the US dollar, changing hands at 1.2696 per US dollar at midday.

Commodities

WTI Oil was up 0.89 percent to $51.87 per barrel.

Brent Crude gained 1.17 percent to $57.83 per barrel.

Gold was down 0.07 percent to $1,302 an ounce.

Business News across Asia

In China, The Chinese economy has come back in the spotlight this week, as the 19th National Congress of the Communist Party of China, the most important political event in China, is scheduled to kick off on Wednesday.

Take away: Investors would be paying attention to economic policy signals from the meeting. Though major outcome of this meeting is expected to be high in aspiration but lack concrete details, any signal from top leaders could move markets around the world.

Featured image from 24matins.uk

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 37 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Analysis

Stocks Mixed as Dollar Tests Highs Again

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Choppy summer trading conditions continue to dominate traditional financial markets, with low train volumes and relatively narrow intraday ranges in most of the asset classes. Despite the low activity, there is still a clear rising trend in US markets, while the rest of the world tries to gather some bullish momentum despite the widespread technical relative weakness.

Trump’s controversial meeting with Putin still made the most headlines, although stocks largely ignored the story, while trade war fears and the Brexit drama had much stronger impacts, with especially the Pound performing weaker than its peers.

Dow Futures, 4-Hour Chart Analysis

The Nasdaq is still trading just below its all-time high, despite today’s weaker session, while the S&P 500 hit another marginal 5-month high today, with the Dow still lagging behind the rest of the market. The ongoing earnings season also adds to the choppiness of the day-to-day price action, and with the deep global divergences still present, we remain defensive towards equities here.

Shanghai Composite, 4-Hour Chart Analysis

Asian equities experienced a bounce in the last couple of weeks, but China which has been the epicenter of the weakness in June is still struggling to join the move. The trade-war torn Shanghai Composite is still trading near its recent lows, confirming the bear market, while the Yuan hit new 12-month lows compared to the USD in the last couple of days again.

Commodities Mixed as Yuan Tumbles but Dollar Rally Looms

Emerging market currencies are generally under pressure, and the Dollar has been pushing higher against its major peers as well today, with the Great British Pound and the Euro both sliding towards their June lows, and the Yen hitting a new year-to-date low before the afternoon pullback in the Greenback.

Dollar Index, 4-Hour Chart Analysis

The Dollar’s rally, which was boosted by the lower than expected British CPI release in European trading paused somewhat in late trading, after the Dollar index got close to its 1-year high. The US housing market showed a huge drop in activity in July, with Building Permits disappointing and Housing Starts falling off a cliff unexpectedly. The rising yields, which are behind most of the moves this year, are talking a tall on the segment, and that could be a major drag on GDP growth in the coming quarter.

Gold Futures, 4-Hour Chart Analysis

Commodities posted a reversal-like performance today, with gold, oil, and copper all rebounding off their early lows, but for now, the bearish short-term trend remains dominant in the segment. The bounce in gold still left the precious metal below short-term resistance at $1240, while copper is still bouncing around just above long-term support. WTI Crude Oil which lost more than 10% in a matter of days, found support at $66 per barrel, entering a consolidation phase after the rout.

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 295 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Market Overview

Market Update: U.S. Stocks Rally on Banks, Industrials; Fed’s Powell Sees Big Risks in Cryptocurrencies

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U.S. stocks traded in positive territory Wednesday, as earnings tailwinds propelled banks and industrials companies higher while a slump in energy shares subsided.

S&P 500, Dow Rise

The large-cap S&P 500 Index rose 0.2% to 2,815.62, its highest in over five months. Gains were largely concentrated in just two sectors, with financials rising 1.5%. Industrials stocks, which include airlines and railroads, jumped 1.1%.

On the opposite side of the ledger, consumer staples and utilities companies were the biggest drags on growth, falling at least 0.6%.

Dow industrials added 79.40 points, or 0.3%, to finish at 25,199.29.

The technology-heavy Nasdaq Composite Index finished at 7,854.44, virtually flat for the day after reporting only minor upside earlier.

A measure of implied volatility known as the CBOE VIX touched new six-month lows Wednesday. The so-called “fear gauge” bottomed at 11.44 on a scale of 1-100 where 20 reflects the historic mean.

Powell: Cryptocurrencies Lack Intrinsic Value

Federal Reserve Chairman Jerome Powell lashed out against cryptocurrencies Wednesday in round two of his semiannual testimony before Congress. According to Powell, crypto-assets present serious risks to unsophisticated investors who are more likely to react to large fluctuations in market prices.

“There are investor and consumer protection issues as well,” Powell told the House Financial Services Committee before adding that digital assets lack intrinsic value.

Despite heading the most powerful central bank in the world, Powell’s take on cryptocurrency is hardly unique and suffers from the same ‘lack of sophistication’ that he says characterize bitcoin investors. As Hacked recently showed, arguments against crypto’s intrinsic value fail to take into consideration the vast resources required to maintain individual networks such as bitcoin.

Although Congress remains skeptical about digital assets, federal securities regulators are loosening their restrictions on the market. The U.S. Securities and Exchange Commission (SEC) has deemed bitcoin and Ethereum to be non-securities while at the same time opening up new avenues for security tokens to be traded on regulated exchanges.

Cryptocurrency Market Cap Approaches $300 Billion

Cryptocurrency prices continued higher Wednesday, as bitcoin’s sudden rally sparked a wider uptrend in altcoins, resulting in the highest market valuation in over a month.

Bitcoin traded above $7,500 on major exchanges while major altcoins like Cardano and Stellar Lumens put up double-digit gains. At the time of writing, the total cryptocurrency market was valued at $288 billion, according to CoinMarketCap. The market’s total value peaked above $297 billion.

The large uptrend has been accompanied by an equally impressive jump in trading volumes. Total market turnover exceeded $21 billion for the first time since May. It’s also a 70% increase from week-ago levels.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 500 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Market Overview

DJ King Crypto Banker

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Hi Everyone,

If you’re reading this, you probably agree that the old school financial industry is in need of a shakeup. It seems that Goldman Sachs agrees.

This hit track is a remix of the old Fleetwood Mac song “Don’t Stop Thinking About Tomorrow.” It was created by Goldman’s incoming CEO David Solomon (AKA: DJ D-Sol). Named after two ancient kings and an angel, Solomon will assume the throne on October 1st.

Current CEO Lloyd Blankfein was famously indecisive about cryptocurrencies, yet over the last few months, it’s become clear that the bank is ramping up their cryptotrading activities in a big way.

Solomon has been a lot more clear on crypto and has gone on record saying that Goldman is focused on crypto due to a high level of demand from their clients.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Dollar Climbs – Gold Falls
  • Bitcoin Party Time
  • Double Double Crypto Day

Please note: All data, figures & graphs are valid as of July 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

President Trump admitted yesterday to making a mistake. After causing a global stir backing Putin over the FBI at the Helsinki summit, Trump has now walked back his comments and even admitted for the first time that he agrees with the assessment that Russia was indeed behind the meddling in the 2016 elections.

Though many remain unconvinced, the markets remain unfazed and instead the focus from many analysts remains on the possibility of a ramped up trade war with China and on the Fed’s actions.

In his testimony yesterday, Fed Chair Jerome Powell did his best not to be political but did note that the effects of further tariffs would likely be felt throughout the US economy. Today Powell testifies before the House Financial Services committee. We can probably expect further questions from the House regarding the specific reaction the economy might have to said tariffs.

Stocks are rather mixed today but we do have notable moves in the currency market where the US Dollar is gaining strength.

The US Dollar Index is once again bumping up against resistance at 95 points. If this level is passed, it could lead to further gains, especially since the United States seems to be a lot more aggressive than the rest of the world on their plans to raise interest rates.

In line with the stronger Dollar, the metals have continued to decline. Gold is now the cheapest it’s been in over a year.

Bitcoin Surge!!

After more than a month of doing nothing, bitcoin broke out yesterday rising $656 in 40 minutes, bringing life and optimism back into the market.

Here we can see the strong break above the key resistance level of $6,800, clearing quickly past $7,000 then spending a short time above $7,500 before a retracement.

By looking at the volumes, it seems that the cause of the surge was from some fresh money entering the market. This graph from www.cryptocompare.com shows the incredible volume spike at the time of the surge.

This one shows the volumes by currency. The blue circle is the exact time of the surge. Notice the spike in USD volumes?

Lately, we’ve been seeing a trend that Tether (USDT) has been becoming more prominent in overall volumes. Tether volumes generally indicate cryptotraders speculation on the exchanges. The fact that this surge happened on USD and not Tether might indicate that it is due to fresh money coming in.

Double Double Crypto Day

Today the US Congress is set to hold not one, but two separate hearings that relate to cryptocurrencies. This is a clear sign that the US government is taking the crypto industry seriously and it seems that point of both hearings will be to help not harm innovation in the space.

The double-header comes as the SEC’s mailbox is reportedly inundated with letters from citizens urging them to approve VanEck’s Bitcoin backed ETF at their hearing on August 10th.

Shifting over to Wall Street, it seems that the bitcoin monthly futures contracts on both the CME and the CBOE group will expire today. As we’ve stated before, there is nothing to fear from the expiration of these contracts. The chances that any large player is trying to manipulate the markets using them is very slim.

Just to get a picture of the volumes of these markets, I’ve pulled the following graph from the Bloomberg terminal for you. This shows the daily volumes on the CBOE’s XBT futures since inception.

The small white line shows the average daily turnover, which is just under 5,000 BTC.

Even though the volumes on the CME are higher, it’s less significant for this analysis since they are using a more complex index as a reference rate for contract settlement and thus would be much more difficult for anyone to try and manipulate.

As always, let me know if you have any questions, comments, or feedback. I’m always happy to hear them. Let’s have an excellent day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 115 rated postsSenior Market Analyst at Etoro.com.




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