It’s world markets update time again. We’re on a roll!
See what happened across the world with our summary of 4th February 2016.
Shanghai Stock Exchange
It’s been hard year for Shanghai but at least it wasn’t today where Shanghai grabbed 41.78 points (1.53%) to close at 2,781.02.
Will this year of the fire monkey turn out to be “fiery” red for China?
One analyst said,”2,300 points is a near term possibility”. If Shanghai falls to 2,300, I think PBOC will be “fiery” red as their effort to inject cash into the system will have failed miserably.
Japan Exchange Group – Tokyo
As the dollar keeps rolling, people run for Yen as the Nikkei became the unlucky one in Asia.
While other majors benchmark index in Asia gain, the Nikkei is the only one to end down 146.26 points (0.85%) and close at 17,044.99.
London Stock Exchange Group
This week the market was dominated by oil news, and then suddenly the stage turned to US dollar.
The fall of dollar helped commodities shares to perform outrageously after being consistently battered for a long time. The FTSE jumped to 5,898.76, up 61.62 points or 1.06%.
Also of note were a few words coming out from today’s MPC meeting:
“The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target and in a way that helps to sustain growth and employment. At its meeting ending on 3 February 2016, the MPC voted unanimously to maintain Bank Rate at 0.5%. The Committee also voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion.”
Source: Bank of England
In short, it says there will be no interest rate increase for a while, until the persistent headwinds weighing on the economy subside.
New York Stock Exchange
Yesterday we posted about the dollar index and it’s possibility of continuation, today we see the dollar rolling down under the stop level.
This movement proves to us, “It is unlikely The Fed will hike interest rate in 2-3 months”, which effectively translates into a weak dollar.
We also had the unemployment claims report come out at 285k, 6k higher than expected.
The NFP report tomorrow will give clues as to how bad the employment market is after a series of bad earnings reports and layoff plans mentioned by several big names.
The Dow Jones followed through yesterday 183 points up, currently up 47 points, and looks to close the day on a positive note.
Contrary to the Dow, the Nasdaq fell 20 points.
Leading the way down, Google’s parent company Alphabet fell 2.15% and Facebook fell 1.8%.
Surprisingly Yahoo added more than 5%; investors and analysts accepting then that strategies outlined on Tuesday were “positive development”.
Its flight to safe haven assets and get out of US dollar movement today, Yen and CHF were loved by risk averse traders.
Aside from safe haven assets, shares related to commodities also moved up.
Traders will look at Non-farm payroll data on Friday, which means the price might be ranging until that news release.
Extremely bad numbers will make the market think there will be no more rate hikes this year.
Worst case scenario may worsen if the Fed join the “easing” team and everyone will want to import inflation but who actually is it that will have the inflation?