Trading Market Commentary August 25, 2017

Commentary

Commentary

Global markets became much more volatile on Friday, since the Jackson Hole symposium arrived at its busiest stage, along with the speech from Federal Reserve (Fed) Chair Janet Yellen, who didn't help the hurting US Dollar which got near to its 12-month lows level following the speech.

Fed's chair Yellen signaled warning relating to inflation and growth as well as the decrease in the central bank’s balance sheet, and this has been more than enough to ignite selling the struggling US currency, even though the central banker chair claimed that the Fed produced considerable progress toward its objectives. 

Since the speech mainly centered on regulatory issues, equities hardly budged, and also the primary Indexes were little changed following a short rally. Along with volumes continually staying small, and the key averages benchmarks being in a short-term trading range, marketplace action is anticipated to pick up in the next week. 

US  Market

US main Indexes shed much of their early morning gains into the closing. Nevertheless market still finished positive on the session. The Russell 2000 Index was experiencing its very best week over a couple of months. NASDAQ benchmark closed small down with the VIX (CBOE's Volatility Index) dropping close to 9% concluding at 11.16, although most likely not a surprise granted the volume decrease once again.

The S&P500 Index recovered from the small correction low level this week. However, the broad average remains to be trading in a short-term down-trend, just under the significant $2450 level. The long-term upward trend continues to be still in effect, for the time being, in spite of the weaker market internals, although the volatility is anticipated to improve in September, the advance might be problematic. 

With light-to-moderate volume level, the S&P500 core Index added in 4 pts - 0.2% to 2,443, while the NASDAQ Composite Index drop 6 points - 0.1% to 6,266, and big daddy DJIA (Dow Jones Industrial Average) went up 30 points - 0.1% to 21,814. 

European Markets

Eurozone tended to float in monotonous trading session while awaiting much-anticipated news. European Central Bank boss - Draghi also commented on global trade and that openness is vital as well as cautioned of protectionism along with risks attached. A few statements alluding to the level of quality between American and Eurozone banks and also stated warnings related to going back to over extended conditions too quickly.

Attention-grabbing the fact that the Eurozone inflation swaps continued to be less than three years ago, as well as the spread between the American and core Eurozone bonds,  is still distorted, especially given that Draghi repeated that “a significant amount of accommodation is still necessary.” Suppose we've got to look ahead to September 7th for the summary of these statements.

Eurozone equities relinquished earlier results and finished generally lower during the period of the trading session. While German DAX30 and the U.K.'s FTSE100 Indexes both slid down by 0.1%, the French CAC40 Index decreased by 0.2% on the day.

Asia-Pacific Market

Most important talking point out of Asia-Pacific region has been the continuing robust earnings data and also the pursuing buying confidence. The HK's the Hang Seng increased more than 1.2% as the leading Shanghai Index rallied close to 2% following earnings beat targets to complete the week nicely bid. The trading action emerged mostly coming from results in energy, communications, and financials even retailers.

The Japan's Nikkei225 added in a bit positivity to the region having positive 0.5% boost despite the July CPI (Consumer Price Index) data being up plus 0.5%. The Aussie’s ASX200 was not able to be a part of the party, finishing small down as the Indian SENSEX Index was shut down for holidays.

Currency Market

Super Mario's (Draghi) remarks on the Euro Dollar that traders concentrated on had taken the single currency up 140 points or 1.1% higher. Stating that the global recovery is in fact in progress will likely have its impact on Eurozone government paper this coming Monday (BTW, much of the financial market is not going to be open as a result of UK holidays). 

The Euro Dollar gained ground versus the majority of foreign currencies and was even better by plus 0.6% against British Pound. The DXY Index (US Dollar) was off minus 10% YTD (Year To Date). Aside from the US Dollar’s downfall, only the Japanese Yen was offering a weakness yet again as the currency continues to be glued to the 109 handle.

Crypto-Segment Market

The crypto market was very energetic, and it was for the most part bullish on Friday, with all the biggest coins building ground, on account of the rally in BTC (Bitcoin). Bitcoin has been moving even closer to $4500, and that could contribute to still another thrilling weekend, even though the overbought long-term crypto currency landscape still shows a deep correction in the near future.

Commodity Market

Yellow metal breached the $1300 price range once again following a sharp decline to $1280 level within the low-liquidity surroundings. However, it continues to fail to break-out from the extended trading price range. The Gold is still to be expected to go higher on account of the advantageous long-term fundamental principles. 

Crude oil has been somewhat higher, due to the worries with regards to Hurricane Harvey’s potential outcomes on supply. The WTI (West Texas Intermediate) contract continues to be hanging around the $47.50 level for nearly two weeks now, and as the oil failed to regain the $50 per barrel price level, the chances currently still favor a push into the lower end of the long-term range in the vicinity of $42.

What's Ahead for Next Week

Next week economic data is more likely to draw in interest having the closely watched regular monthly Non-Farm payroll report to be unveiled up coming Friday.

Personal income and spending, consumer confidence, manufacturing activity, and pending home sales activity reports can also draw in interest.

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