Good news around the world as trading starts

Monday this week turned out to be a fruitful one for Asia Pacific countries, especially for Japan: On June 19 after news of the trade balance came out, the Japanese currency continued to weaken against the dollar and got to the 111.3 mark, almost reaching Friday’s highs.
Statistics indicated that Japanese exports grew by 14.9% on an annual basis (May 2016 – May 2017) to 5.85 trillion yen, which is a local high for the last few years. But imports also grew, reaching the 6.05-trillion-yen mark, increasing 17.8% on an annual basis (May 2016 – May 2017).
Overall, the Nikkei 225 index rose 0.62% on trading. Among the leaders were the high-tech and electronics sector. For the first time in a long time, Sony showed the strongest growth among all the companies included in the index. It is quite likely that the Nikkei index will continue its movement during new trading tomorrow, June 20. Although a number of investors may still want to lock in their positions because the index is within local highs.
It is also worth noting that other Asian indexes rose too, including Hong Kong’s Hang Seng (+1,16%), China’s Shanghai Composite (+0.68%), and Korea’s Kospi (+0.4%).

The European region also did fairly well at the start of trading. As a result of the elections in France, Emmanuel Macron and his allies won an absolute majority (350 of 577 seats). This gives him all the freedom he needs, including the ability to amend labor law.
Amid the current news, the majority of European indexes traded up, including the Euro Stoxx 50, CAC 40, and DAX, which rose a little more than 1%. One must note some negative factors, too: despite growth in the energy and finance sectors, the strengthening of the US dollar after the Fed raised rates last week adversely affected trading in European currencies. The EUR/USD is trying to find equilibrium at 1.12, tilting toward a further decline. The GBP/USD pair is trading in almost the same vein, also losing about 0.2% since trading opened and moving toward 1.275.
The situation is complicated by the start of negotiations on Britain’s exit from the EU, marked by Minister David Davis’s arrival in Brussels. It appears that the Brexit negotiations promise to be protracted, since Theresa May’s loss of her parliamentary majority might soften future rhetoric.
Current events and the US stock market’s behavior might put a damper on European trading on Tuesday, June 20. By the looks of it, both the euro and the pound might fall 0.2-0.4% relative to the dollar, and many European investors will also be able to take some of the profit they made today.
Apart from everything else, on Tuesday it will certainly be worth watching the remarks by the chairman of the National Bank of Switzerland, Thomas Jordan, at 6:30 am GMT and the speech by the Bank of England’s Mark Carney at 7:30 am. The results of these speeches will probably increase the pressure of a number of European currencies on the US dollar for some time, although only slightly.

American trading on Monday was no exception. It too started on a positive note: the majority of indexes continued to rise after the opening bell, reaching last week’s near-peak or even peak values. The Dow 30 composite index is trading at 21,484, which is a high, although its growth trend is the least significant compared to other US indexes. The Dow 30 is rising about 0.5%; the S&P 500, about 0.7%; and among the leaders is the Nasdaq, with a rise of about 1.15%.
Apple shares are driving the growth: they are up 2.4% along with the entire high-tech sector. The energy sector, including the stocks of Exxon Mobil (-0.65%) and Chevron (-0.55%), led the way among falling stocks.
Speaking of the US national currency in general, the US dollar continues to strengthen gradually relative to core currencies. After William Dudley, president of the New York Federal Reserve Bank, said that monetary policy should not be too soft and that the US economy is in good shape, investors are waiting for remarks by FRS representatives on Tuesday. Rosengren, Kaplan, and Fischer will present their views of the situation.
For American investors, Tuesday’s trading may begin with profit-taking after record growth on the stock exchange, but the US dollar will apparently continue to strengthen relative to core global currencies, spurred by statements by FOMC members.

The oil market cannot seem to show any growth: the number of drilling rigs in the United States rose by another 6 to 747, and again investors are concerned about a global oil glut. Despite Saudi Arabia’s verbal interventions, the situation is far from stable. Moreover, oil prices are now under pressure from a strengthening dollar, which is keeping Brent crude at $47.60/barrel. On Tuesday, we’d advise watching for initial statistics from the American Petroleum Institute (API).

Yuri Prokudin, Olymp Trade analyst

Olymp Trade Review