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Asian Market Update – Thursday: Asian Shares Gain as US Rate Hike Becomes More Likely

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Janet Yellen

Major Asian equity markets posted minor gains on Thursday morning, as investors digested the minutes from the latest US Federal Reserve meeting, which indicated that an interest rate hike this year is still on track.

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In Japan, the Nikkei 225 was up 0.42 percent to 20,969 at around midday. The Japanese benchmark index is now close to the 21,000 level, trading at its highest point in nearly a decade. Shares of Kobe Steel, which saw huge sell offs on Wednesday after a data-falsification scandal, edged up 0.8 percent.

In Greater China, equities were slightly down during the morning session after strong gains on Monday. The Shanghai Composite Index was down a slight 0.17 percent to 3,382 before midday, though the CSI 300 rose 0.14 percent to 3,908 and the Hong Kong Hang Seng index rose 0.26 percent to 28,464.

Markets in Hong Kong and the Chinese mainland are also still digesting a policy speech by Hong Kong chief executive Carrie Lam, who, in her first policy address, stressed economic development over political issues, often related to the relationship with Mainland China.

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In South Korea, the Kospi tacked on 0.41 percent to 2,468 before midday. That’s a fresh record for the South Korea benchmark and the second straight day of big wins after the markets reopened on Tuesday from a weeklong holiday.

Down Under in Australia, the ASX 200 also gained 0.31 percent to 5,790 at midday on Wednesday.

Talk of the Day: Minutes from the latest US Fed meeting said that another rate increase is “likely to be warranted” given “unchanged” outlook for the economy.

Also to watch: China September vehicle sales, Malaysian industrial output and Singapore retail sales numbers.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 20,969 0.42%
China-Shanghai Composite Index 3,382 -0.17%
China-CSI 300 3,908 0.14%
South Korea-KOSPI 2,468 0.41%
Hong Kong –Hang Seng 28,517 0.09%
Australia-ASX 200 5,790 0.31%

Cryptocurrencies

Prices of cryptocurrencies pointed higher overnight during the Asian trading session Thursday morning.

As of midday in Asia, the price of bitcoin was up 1.32 percent percent to $4,885, closing in rapidly on the $5,000 all-time-high seen back in September.

Ethereum jumped 1.6 percent to $307 before midday. The virtual currency’s price showed strong momentum over night, having surged from the $300 mark.

Litecoin was nearly unchanged Thursday morning, having lost a slight 0.02 percent to $50.75 at midday. Litecoin has now been consolidating around the $50 level since the beginning of the month.

Currencies

The Japanese yen gained 0.12 percent the US dollar at midday Thursday to 112.33 per dollar.

The Chinese yuan was flat against the US dollar at 6.5870 per dollar.

The Australian dollar gained 0.37 percent on the dollar, changing hands at 1.2791 per dollar at midday.

Commodities

WTI Oil was up 0.02 percent to $51.01 per barrel.

Brent Crude down 0.11 percent to $56.60 per barrel.

Gold was up 0.31 percent to $1,294 an ounce.

Business News across Asia

In China, the Chinese government is mulling to take stakes in some of the country’s largest technology companies such as Tencent (the company behind the massively popular WeChat messaging app), Alibaba and Tudou. Government funds could enter these companies and participate in decision-making, according to Chinese media reporting.

Take away: Though this is not confirmed by any official or companies, it is a huge development because Chinese tech giants have enjoyed great independence so far and even participated in state-owned companies’ restructuring plans. Potential impact could be huge. In terms of share prices the impact is unclear, but state ownership is traditionally not considered to be a bullish factor for any company.

Featured image from Flickr.

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Market Overview

Asian Market Update – Friday: Asian stocks surged from negative territory to post minor gains on US tax reform hopes

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US tax reform

The Big Question: Are markets still hopeful for a US tax reform?

Most Asian stock indexes surged back from losses in earlier trading on Friday’s morning session to post minor gains at around midday, as news out of the US suggested that a market-friendly tax reform plan sees new hopes.

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In China, the Shanghai Composite Index was up 0.05 percent to about 3,371 before midday. The benchmark was down to as low as 3,360 in early trading on Friday morning.

In Hong Kong, the Hang Seng Index was up 0.98 percent to around 28,435, more than 100 points higher than the low of 28,313 in the morning session.

In Japan, the Nikkei 225 was relatively flat at around 21,443. The Nikkei was trading between 21,363 and 21,489 during the morning session.

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In South Korea, the Kospi moved up 0.37 percent to around 2,482 shortly before midday.

Down Under, the ASX 200 was down 0.21 percent to around 5,908. Though the benchmark remains in negative territory at midday, it was still higher than daily low of 5,868.

Media reports suggest that the US Senate, majority controlled by Republicans, has approved a budget blueprint for the fiscal year 2018 – a move that would pave the way for Republicans to push for tax cut packages without Democratic support.

Markets in Asia are still digesting GDP and trade data out of China and Japan. The Chinese economy posted a 6.8 percent growth in the third quarter, slower than the 6.9 percent posted in the previous quarter.

Japanese trade data showed that the country’s exports rose for the 10th straight month in September, helped largely by a weaker yen and strong demand overseas.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 21,443 -0.02%
China-Shanghai Composite Index 3,371 0.05%
South Korea-KOSPI 2,482 0.37%
Hong Kong –Hang Seng 28,435 0.98%
Australia-ASX 200 5,908 -0.21%

Cryptocurrencies

Prices of the main cryptocurrencies were sluggish overnight during Asia’s morning trading hours on Friday, with bitcoin and ethereum prices slightly down and litecoin price slightly up.

At midday in Asia, bitcoin price was down 0.25 percent to $5,684. Though pointing lower, that’s still higher than about $5,617 at the same time on Thursday.

Ethereum lost a slight 0.01 percent to about $308 before midday. Ethereum has been trading steadily above the $300 level since Wednesday.

Litecoin was up 0.39 percent to about $59.78 at midday. The virtual currency has been trading quite steadily around the $60 market since Wednesday.

Currencies

The Japanese yen lost 0.56 percent the US dollar at midday Friday to 113.17 per dollar.

The Chinese yuan lost 0.11 percent against the US dollar at 6.6195 per dollar.

The Australian dollar also lost 0.4 percent on the dollar, changing hands at 1.2742 per dollar at midday.

Commodities

WTI Oil was up 0.16 percent to $51.64 per barrel.

Brent Crude gained 0.17 percent to $57.36 per barrel.

Gold was down 0.37 percent to $1,283 an ounce.

Business News across Asia

In Singapore, Singapore Airlines has reported an order of 39 Boeing aircraft, costing $13.8 billion. The order is expected to be signed next week when Singaporean Prime Minister Lee Hsien Loong visits the US.

Take Away: The deal could be viewed as a major blow to Europe’s Airbus SE. Already, Airbus has fallen behind Boeing in orders in the first nine months of 2017.  

In Japan, the aggressive investors in tech – Japan’s Softbank – and it’s ever-expanding financing partners have invested so heavily in the tech start-ups that it dimmed the outlook for tech IPOs markets hoped for, per Reuters.

Take Away: Still, Softbank and its partners are showing no signs of slowing down their endeavor in investing in tech start-ups across the globe.

Featured image from Pixabay.

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Analysis

Daily Analysis: Stocks Turn Lower as Kiwi Collapses after Coalition Agreement

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Thursday Market Recap

Asset Current Value Daily Change
S&P 500 2558 -0.09%
DAX 12990 -0.41%
WTI Crude Oil 51.37 -1.39%
GOLD 1289.00 0.43%
Bitcoin 4258 -0.89%
EUR/USD 1.1829 0.36%

A sudden decline in the Hang Sei index in Hong-Kong sparked a wave of selling in global stocks, but the major US indices recovered well during the session, which marked the 30th anniversary of Black Monday, the largest one-day decline in history. Today, there was no follow through after the early losses, and with IBM still leading the way, the Dow and mega caps pulled the market higher.

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With the dovish candidates gaining momentum in prediction markets regarding the next Fed Chair, the Dollar slid lower for the second day in a row, losing ground to the Euro, the Yen, and the Loonie, but the struggling Great British Pound turned south again thanks to the lingering Brexit fears.

NASDAQ 100 Futures, 4-Hour Chart Analysis

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The New Zealand Dollar and the local coalition talks made headlines, as the Kiwi lost more than 2% against the major currencies following the announcement of the new Labour-led government. The currency hit a new 5-month low against the Greenback amid the rout and got close to key 0.70 level as well.  Gold continued its rebound thanks to the stock weakness and the Dollar sell-off, but the precious metal is still well-off the $1300 level after the weakness earlier on this weak. Crude oil remains very choppy, as it fell below the $52 barrel yet again, extending the trendless, hard-to-trade period in the crucial commodity.

NZD/USD, 4-Hour Chart Analysis

Cryptocurrencies

The sharp drop of yesterday is just a faint memory for Bitcoin traders, as the most valuable cryptocurrency is back near its all-time high, leading the swift recovery in the segment. Most of the majors are up today, with Ripple and Ethereum still being in the center of attention, following the Byzantium update of the second largest blockchain and the extremely volatile days of XRP. The rest of the majors are less volatile, with notable weakness in the market of NEO and IOTA, and a generally calmer environment following yesterday’s turmoil.

XRP/USDT, 4-Hour Chart Analysis

Technical Picture

Gold might have formed a crucial higher low this week that could propel the next leg higher in the long-term uptrend, providing a good buying opportunity for both investors and traders. The precious metal is after a bullish cross in the MACD indicator with a favorable stop loss level found below yesterday’s low. Gold faces resistance near the key $1300 level, and above that      around $1315.

Gold, 4-Hour Chart Analysis

Key Economic Releases on Thursday

Time, CET Country Release Actual Expected Previous
2:30 AUSTRALIA Employment Change 19,800 15,200 54,200
2:30 AUSTRALIA Unemployment Rate 5.5% 5.6% 5.6%
4:00 CHINA GDP 6.8% 6.8% 6.9%
4:00 CHINA Industrial Production 6.6% 6.4% 6.0%
10:30 UK Retail Sales -0.8% -0.1% 1.0%
14:30 US Unemployment Claims 222,000 245,000 243,000
14:30 US Philly Fed Index 27.9 22.2 23.8

Key Economic Releases on Friday

Time, CET Country Release Expected Previous
14:30 CANADA CPI 0.3% 0.1%
14:30 CANADA Core Retail Sales 0.3% 0.2%
16:00 US Existing Home Sales 5.32 mill 5.35 mill

Featured image from Shutterstock

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Bitcoin

Tortoise & Hare Investing

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Yesterday I had the pleasure to speak with a man named Didi Taihuttu who has just sold his house, three cars, and a motorcycle and bought cryptocurrencies.

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A daring step for sure but what really struck me is that Didi mentioned, he doesn’t see what all the fuss is about or even understand all the media attention. He’s simply trying to show his kids that material possessions aren’t everything in life and that they’re happy with whatever the outcome will be.

You can follow Didi and the Yolo family on Twitter where they are documenting their new world adventure @yolofamtravel

We wish them all the best!

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@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of October 19th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

All stocks seem positive over the past 24 hours but the Dow Jones is really flying. After crossing the 23,000 mark on Tuesday, it’s come up another 160 points on Wednesday, outperforming the rest of the stock markets by far.

Not that 160 points is such a big move mind you, it’s only 0.7%. The more impressive thing is that stocks just never seem to go down as they have adopted the famous fabled Tortoise’s attitude, “slow but steady wins the race.”

It’s now been almost two years since the last time the market has seen a correction of 10% (orange) and the Dow hasn’t even seen a 3% correction since April (yellow).

The Hare

If stocks are the Tortoise than bitcoin is the Hare.

Volatility on cryptocurrencies has been a marking theme of 2017 but in the last 2 weeks, it has been raised to a new level.

The following chart is a weekly candlestick chart. So just take a look at the last two candles. You can see last week’s gain was a total of $1300 from the low to the high. This week the action has been less one sided but not any less volatile, creating excellent opportunities for day traders.

There’s such a huge divide between bitcoin supporters and naysayers too. Yesterday, I read a 20 page report from UBS who was saying that they don’t see it as likely that Bitcoin will be majorly adopted in the future. Of course, they failed to mention that Japan is already well on the road to adoption.

This morning, I came accross this quote, which I found a bit extreme as well.


Tim Draper on Bloomberg Television

Certainly, if the financial revolution came that quickly it would have devastating effects. The world would probably benefit from some kind of middle ground between the two above opinions.

Something happening in New Zealand

I must admit that I hadn’t been paying that much attention to New Zealand’s recent elections but seeing the NZD tumble this morning is extremely exciting. The move seems to be based on the news of a new Prime Minister, Jacinda Ardern.

You can see the huge move on the NZDUSD, which just fell below 0.7050 for the first time since May….

The reason that this dip is so excitng is that New Zealand currently pays one of the highest interest rates in the world. So entering a buy position in eToro you actually get paid to hold the position.

Against the USD, it’s not so much, just 15 cents on a 10,000 unit position. However, against the Yen or the Swiss Franc, you have a nice daily rollover…

For example, and of course, this is not trading advice, if you have a buy position on the NZDCHF of $10,000 on 25 times leverage you earn $18.79 per day regardless of what happens to your profit and loss.

This type of trading can be useful whether you are a tortoise or a hare or anyone in between. Wishing you an amazing 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.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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