Market Commentary February 21

The Trading Daily Market Commentary features a summary of selected market segments as well as economic matters. Its content of interest is made available to all traders and investors at large

American market endured an up and down session on Wednesday as everyone looked eagerly to the anticipated release of Federal Reserve meeting minutes from January. Economists, as well as analysts alike, seemed to better explain the Fed’s “pivot” in exercising a more patient path to interest rate hikes.

Also, the balance sheet is normalized through the autopilot program. One remark selected from the minutes concerning downside risk attracted a lot of notice:“the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe, a rapid waning of fiscal policy stimulus, or a further tightening of financial market conditions.” Although, this isn't a surprising description.

Ultimately, the main indices finished the day modestly higher. The DJI advanced 63 points or 0.2 % to end at 25,954, the S&P 500 edged up 5 points or 0.2 % to 2,785, while the Nasdaq 100 shed just over minus 4 points or 0.06 %. The Russell 2000 was once again the percentage gainer after concluding plus 0.46 % or 1582.

Other Market(s)

The Asian-Pacific market(s) had a solid sense of direction yesterday compared to Tuesday with the bulk of the markets in the green zone right after President Trump’s remarks alluding to the 1st of March deadline as being a date which was not fundamentally set in stone. 

The Japan Nikkei 225 index rose by 0.6 %, while H.K's Hang Seng and Kospi who were on the losing front on Tuesday both bounced greater than 1 %. The core  Shanghai index went moderately higher. On some economic headlines out from 'rising sun' show the construction orders were down by 3.7 %.

Currencies in Asia generally decreased versus the US Dollar yesterday. The Yen and H.K. Dollar dropped modestly. The PBC central bank base interest rate set the Renminbi reference point against the US Dollar at 6.7558, slightly greater than the prior fix. The onshore Yuan (currency) trade between plus/minus 2 % of the daily mid-point fix.

The Eurozone market(s) were all positive yesterday with the German DAX30, French CAC40 and U.K.'s FTSE100 rising and bringing the last five days to be very strong for the Eurozone region. The auto sector share industry was amongst the best players, perhaps due to the America-Chinese trade tariff talks being in the positive mode.

The UBS bank of Switzerland has been fined €3.7 Billion from a court in France. The allegation is that the bank helped French nationals to evade paying tax. The bank continually states that they have not breached any French laws. Last year UBS made a profit of €4.3 Billion and had set aside around €1.9 Billion for future litigations.

In the other news, Great Britain maintains it is currently handling risks with the Chinese smartphone producer Huawei Technologies, saying there is no proof of spying. In a new interview with the Huawei CEO Ren Zhengfei, he said the company had long term plans for the U.K., and any investments which are cut from America will go into the U.K.

The German FM (finance minister) Olaf Scholz symbolized that Germany and France have agreed on a plan for a new Eurozone budget deal which will be submitted in the coming days.

Gold market decreased yesterday, with precious metal shading $2.70, and almost completing the end of the move validation of our Gold Rally $1345 target. Both WTI and Brent crude oil rose yesterday, making returns of more than five percent over the last five days.

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