The Big Question: How long the Japanese stock market rally will last?
Most Asian stock indexes were trading in mixed mode during Thursday’s morning trading, with gains seen in Japan and South Korea and losses in other parts of the Asia Pacific.
In Japan, the Nikkei 225 was up 0.66 percent to around 21,503. The Nikkei has now posted 12 consecutive days of gains and is on track to post another two-decade high.
Thursday morning’s gains came after the latest official data showed that Japanese exports rose for the 10th straight month in September, helped largely by a weaker yen and strong overseas demand.
In China, the Shanghai Composite Index was down 0.35 percent to about 3,369 before midday on Thursday. The CSI 300 Index, which tracks the 300 largest companies listed in Shanghai and Shenzhen, also lost 0.3 percent to 3,931 before midday.
In Hong Kong, the Hang Seng Index was 0.07 percent lower to around 28,691 before midday.
Losses in stock indexes in Greater China on Thursday followed official data earlier in the morning suggesting the Chinese economy might be slowing. Official data on Thursday morning showed that the growth pace of the world’s second-largest economy slowed to 6.8 percent in the third quarter of the year from 6.9 percent in the previous quarter.
Though stocks reacted to the slower growth in the economy, most analysts in China believe that it is highly unlikely that the Chinese stock markets will experience major fluctuation during the weeklong meeting of the Party currently underway.
In South Korea, the Kospi moved up 0.05 percent to around 2,484 shortly before midday.
Down Under, the ASX 200 was also down 0.08 percent to around 5,895. That comes even as data showed that Australia in September enjoyed the fastest jobs growth since 2008, as the unemployment rate dropped to 5.5 percent.
Main Market Movers – Mid-day Asian Trading Session
|Indexes||Value at Midday||Daily Change|
|Japan- Nikkei 225||21,503||0.66%|
|China-Shanghai Composite Index||3,369||-0.35%|
|Hong Kong –Hang Seng||28,691||-0.07%|
Prices of cryptocurrencies were mixed overnight during the Asian trading session on Thursday morning.
At midday in Asia, the bitcoin price was up 0.64 percent to $5,617. That’s more than $100 higher than the same time on Tuesday. Bitcoin has posted gains of more than $500 since yesterday and the uptrend remained solid on Thursday morning.
Ethereum gained a slight 0.2 percent to about $314 before midday. That’s largely unchanged from the level around the same time on the previous day. Ethereum, too, has made some nice gains since yesterday, surging from a low of $287.
Litecoin was down 0.65 percent to about $60 at midday. After three days in decline, litecoin has also been moving up nicely since yesterday.
The Japanese yen lost 0.05 percent the US dollar at midday Thursday to 111.97 per dollar.
The Chinese yuan lost 0.08 percent against the US dollar at 6.6329 per dollar.
The Australian dollar gained 0.06 percent on the dollar, changing hands at 1.2732 per dollar at midday.
WTI Oil was down 0.15 percent to $51.92 per barrel.
Brent Crude lost 0.28 percent to $58.02 per barrel.
Gold was down 0.15 percent to $1,277.96 an ounce.
Business News across Asia
In China: Though third-quarter GDP growth slowed to 6.8, other data from the country’s statistics bureau showed that China’s industrial output rose 6.6 percent, beating earlier market expectations. Retail sales also outperformed.
Take Away: Just like the mixed performance in GDP numbers, industrial output and retail sales, the Chinese economy is really complex. The overall slowing trend is a good indication, but the pace at which it happens remains uncertain.
In Japan, electronics giant Toshiba is reportedly under investigation for their accounting practices by the Japanese securities watchdog. Details of the investigation were unclear on Thursday in a Reuters report, which cited insider sources.
Take Away: The dust has not even settled from the Kobe Steel scandal yet before a new Japanese company comes under investigation. Watch out for any signs of problems with corporate culture in Japan. Share prices of other Japanese companies may also be affected.
Featured image from Pixabay.
Welcome to the Party
The first bitcoin futures contracts are now up and running on the CBOE. The excitement was everything we expected and more.
Overall, $40 Million worth of volume was added by Wall Street, which comes out to about 0.3% of yesterday’s total volume. A slow but significant start.
The lack of short sellers emboldened the entire crypto-market causing prices of bitcoin and many other tokens to skyrocket towards their all time highs.
CBOE’s circuit breakers that are designed to halt trading should the price swing too wildly kicked in… twice.
Welcome to the party. You’ve got a lot of catching up to do.
eToro, Senior Market Analyst
Please note: All data, figures & graphs are valid as of December 11th. All trading carries risk. Only risk capital you’re prepared to lose.
The US Jobs report comfortably beat expectations on Friday causing the stock markets to rise nicely. The momentum seems to have carried through the weekend with Asian markets up this morning and futures pointing to a positive open in Europe.
In addition, the Federal Reserve is expected to raise their interest rates this Wednesday and a fresh round of stimulus from the People’s Bank of China may be on the cards shortly after.
Thursday will be a huge day for Forex traders as we get interest rate announcements from the Swiss National Bank, the Bank of England, and the European Central Bank.
Though the Fed is gradually tightening their belt, money around the world is still cheap and easy, which is why many stock indices are breaking new record highs.
Trouble on the Border
The ground-breaking deal that was reached between the UK and the EU last week hinged heavily on the deal that the UK reached with their neighbors in Ireland. The idea is that the border between Ireland and Northern Ireland will not revert to a hard border.
Meaning, that the UK will need to keep the flow of goods and services into North Ireland following the regulations dictated by the EU. However, over the weekend we saw some controversy as the UK government tried to backpedal a bit on this deal saying that it was contingent on the upcoming negotiations with the EU.
The Irish were notably miffed as they understood these negotiations to be final and we’re now back at a point of contention.
The GBPUSD is once again testing the rising support level that it has been building since early November. So much rests on a comprehensive and favorable deal to be struck.
Crypto Gone Wild
In the old markets, we used to say “buy the rumor sell the news.” In what is being called the new normal we say “buy the rumor buy the news.”
In crypto, we just say “buy everything as much as you can.”
Though this market is extremely risky, investors in this space don’t even seem to notice. With the introduction of Bitcoin futures on Wall Street came a strong and powerful rally across the crypto-world. Out of the top 100 biggest cryptocurrencies, 94 of them are in the green today.
Revision: In Friday’s update we mentioned that there is a chance that the price of the CBOE futures may become disconnected from the rest of the market. A few readers have pointed out that this is not correct.
The CBOE’s XBT futures are actually fixed to the price traded at Gemini.com and are settled in cash daily. The CME Group’s contracts will be a bit more advanced and the price will be set by an index that is derived from several exchange sites.
Regardless of the excitement in the market, we must remember that Wall Street has only so far dipped their toes in the water and it may take a month or two to really understand how much they will be able to impact the prices around the world.
The good news is that the bitcoin miners have been working hard over the weekend and managed to reduce the backlog of unconfirmed transactions. The mempool is back under 100,000. 🙂
Keep a close eye on the all time highs of your favorite coin. If we start seeing any breakouts, there’s no telling how high we might go.
Have an amazing week 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.
Asian Market Update – Monday: Bitcoin surges after futures debut; Asian stocks higher on improved sentiment
The Big Question: How will futures trading affect bitcoin?
Bitcoin posted a huge surge on Monday morning in Asia, after futures contracts began trading on the CBOE Futures Exchange in Chicago on Sunday evening US time.
On Coinbase, the price of bitcoin gained more than $2,000 in a strong upswing to close to $16,800 before falling back slightly. At midday in Hong Kong, the cryptocurrency was still up about 9 percent to 16,670 in very active trading.
On CBOE, the front-month bitcoin futures contract surged past $17,000 on Monday morning Asian time, according to Reuters.
The debut of bitcoin futures on the CBOE Exchange marks a key step for bitcoin towards adoption in mainstream finance that could boost its legitimacy and acceptance. However, some are worried that serious fluctuations could follow now that the big boys are in on the bet.
Meanwhile, ethereum was trending up nicely during the Asian trading session on Monday. The cryptocurrency gained 3.89 percent at midday to $464 after losing about $23 in overnight trading.
Litecoin surged nearly 5 percent to $158 at midday, after losing about $9 on Sunday.
Main Market Movers – Mid-day Asian Trading Session
|Indexes||Value at Midday||Daily Change|
|Japan- Nikkei 225||22,871||0.26%|
|China-Shanghai Composite Index||3,303||0.40%|
|Hong Kong –Hang Seng||28,784||0.50%|
|S&P 500 E-Mini Futures||2,656||0.08%|
Major Asian equities were pointing higher in somewhat subdued trading on Monday morning, led by gains in Hong Kong and on the Chinese mainland.
In Hong Kong, the Hang Seng Index edged up 0.50 percent to 28,784 at midday after opening flat. On the Chinese mainland, the Shanghai Composite Index also moved up 0.40 percent to 3,303.
Both Hong Kong and mainland markets have had a couple weeks of increased volatility and lower prices following tighter regulations from mainland officials. Still, recent data for foreign trade, consumer inflation, foreign investments, etc. suggested that the Chinese economy remains stable and sound, which could boost business sentiment.
Markets in Japan also moved up, though only slightly. The Nikkei 225 Index gained 0.26 percent to 22,871 before midday on Monday.
In South Korea, the Kospi was 0.12 percent higher to 2,466 at midday.
Down under, the ASX 200 was up a slight 0.08 percent to 5,999 at midday.
The S&P 500 E-Mini Futures was up 0.08 percent to 2,656.
Investors’ risk appetite appears to be improved by positive economic data out of China, Japan and other key economies, an agreement between US political parties that avoided a government shutdown, and progress in tax reform negotiations in the US, among other things.
Important events that the market is watching this week include meetings of the US Fed and the ECB, Brexit talks, NAFTA negotiations, and the first week of bitcoin futures trading.
The Japanese yen lost 0.12 percent against the US dollar at midday Monday, changing hands at 113.58 per dollar.
The Chinese yuan firmed 0.06 percent against the US dollar to 6.6155 per dollar.
The Australian dollar added 0.17 percent on the dollar, changing hands at 1.3290 per dollar at midday.
WTI Oil was down 0.4 percent to $57.07 per barrel.
Brent Crude was off 0.35 percent to $63.09 per barrel.
Gold was up 0.04 percent to $1,248 an ounce.
News across Asia
In China, Monday marks the 16th anniversary of the country joining the World Trade Organization, which opened the Chinese market to foreign goods and services as well as foreign markets to China. However, China has now filed a suit against the EU and the US for not granting China status as a ”market economy.”
Take away: China has pledged more market access for foreign companies, but the EU and the US are hardly satisfied. The WTO is now hearing the case filed by China, and its decision could have long-last implications for global trade.
In Japan, large Japanese manufacturing companies’ sentiment about economic conditions has improved in the fourth quarter of the year, the official Business Survey Index out on Monday showed. The BSI for large manufacturers came in at 9.7, up from 9.4 in the previous quarter.
Take away: Japanese manufacturing companies have taken a heavy hit after a series of data cheating scandals, but the latest data showed economic growth is robust, and largely held up by demand from overseas.
Featured image from Pixabay.
Disclaimer: The author owns bitcoin, ethereum and litecoin. He holds investment positions in the coins, but does not engage in short-term trading.
Daily Analysis: Stocks Rise on Mixed Jobs Report, Bank gains as Bitcoin Wobbles
Friday Market Recap
|Asset||Current Value||Daily Change|
|WTI Crude Oil||57.34||1.12%|
The “Week of Bitcoin” ended on a positive note regarding traditional financial assets, with several bullish catalysts helping the recently struggling indices in Europe and the US. Asia settled down after a period of pronounced weakness, the finalized framework of the new regulation of the European banking sector favored the banks, end the US employment report was mixed enough but not too bad to help equities. While these don’t sound that bullish from a long-term perspective, in the world of central bank dependency, a sluggish growth environment fuels the yield-seeking rally in stocks.
S&P 500 at All-Time Highs, 4-Hour Chart Analysis
Short-term rates declined thanks to the slightly negative economic news, and as Trump’s decision regarding Jerusalem sparked widespread protests in the Middle East, gold and long-dated treasuries rebounded, as a sign of moderate safe-haven flows. The VIX shrugged off the geopolitical fears and stock volatility plunged back near its recent record lows, while the DOW and the S&P 500 finished on new all-time closing highs, even as the intraday highs from Monday are still ahead of the benchmarks.
Last night’s Brexit deal caused a “sell the news” dip in the Great British Pound even amid the risk-on sentiment, as the currency lost ground compared to its major counterparts, while the rest of the forex complex finished a choppy session close to unchanged on the eventful day.
EUR/GBP, 4-Hour Chart Analysis
All eyes were still on Bitcoin and the major altcoins as trading activity skyrocketed in the cryptocurrency segment thanks to the exponential rally and the sharp correction in the market of BTC. The coin hit a new all-time high on all exchanges, albeit at widely diverging levels, as several exchanges broke under the weight of the record volumes.
Bitcoin fell as much as $3000, more than 20% top-to-bottom, but as we speak the currency is regaining momentum and we might be in for another interesting weekend in the segment. While it seems very likely that a sharp correction is just around the corner, picking a top in BTC is not an easy feat, even as the momentum indicators are off the charts.
BTC/USD, 4-Hour Chart Analysis
Altcoins benefited from the early sell-off in Bitcoin, and Litecoin even rallied to a fresh all-time high, while the other majors rose significantly as well. Although the currency and the segment as a whole are stretched by all measures, and the risks of a “fake-out” our high, speculative flows could propel another rally in LTC.
LTC/USD, 4-Hour Chart Analysis
Key Economic Releases on Friday
|Tent.||CHINA||Trade Balance||264 bill||231 bill||254 bill|
|15:30||US||Non Farm Payrolls||228,000||198,000||261,000|
Featured image from Shutterstock
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