Trading Week Ended September 8, 2017 


With trading markets and the European Central Bank September meeting now behind us, all attention is to focus on October. Later on this month, we have the German General Elections, however global markets remain responsive to headlines news whether or not they be concerning the weather, geopolitics, downgrades or simply just the usual economic data numbers.

Super Mario Draghi (President of the ECB) sent conflicting signals to the trading markets this week by trying everything to keep his cards as hidden as possible regarding the future of the bank’s monetary policies. 

Even though the latest economic statistics continue to look more favorable within the Eurozone compared to US of A, the exuberant bidding in the single currency (Euro Dollar) could undoubtedly result in weakness in the European zone, and also the present robustness may somewhat be cyclical.

North American Trading Market

Trading key US Indexes all went lower this week as geopolitical concerns with North Korea, falling confidence in the possibility of tax reform, and also Hurricane Irma: that is most likely to strike Florida this coming weekend - assessed on traders and investors sentiment. The DJIA (Dow Jones Industrial Average) and the S&P500 ended with a loss of 0.9% and 0.6% respectively, The NASDAQ led the downfall, by dropping 1.2%. 

Despite the fact that stock market settled lower to the week ending on September 8, it stays inside reaching distance to the target of its all-time high; the Spoo (S&P500)  concluded Friday's trading session slightly 0.8% beneath its record-high close of 2,481. U S Treasuries rallied this past week, giving yields to fresh lows for the year of 2017. The benchmark ten-year yield fallen 11 basis points to 2.06%, reaching its lowest price level since early November of 2016.

Also, the Volatility Index VIX rose 20.2% to 12.18. The financial market sector with negative 2.8% number was pushed because of the decline in US Treasury yields, however, most of the other groupings completed with losses of no greater than 1.1%.

The  Russell 2000 small-cap Index - which can be considered a primary indicator since small-cap companies generally depend on domestic consumers: underperformed, shedding 1.0%. Following pacing the equity market's post-election move, the small-cap Index at this point remains a Year-To-Date (YTD) growth of no more than 3.1%, considerably below the S&P500's YTD advancement of 9.9%.

Overseas Markets

Eurozone stock markets overrode very early losses and closed mostly higher on the day, as financial sector gathered ground along with bond yields in the zone rebounding from the latest difficulty. The German DAX30 have gotten near the key resistance of 12,375 on Friday, and the German Index continuously was reacted encouragingly for bulls when confronted with the robust Euro Dollar this week. While the U.K.'s FTSE100 Index lost its poise by 0.3%, and the French CAC40 Index closed down just beneath the unchanged price line.

Stocks in Asia-Pacific close out the week mixed, along with export numbers showing that Chinese exports have missed estimates, however, imports - a possible indication of an increase in domestic output - topped the estimates handsomely. 

Governing bodies, as well as central banks around the globe, are still concerned about the lack of inflation or significant growth. Markets saw evidence again yesterday, with the  Japan's Gross Domestic Product release Q2 growth which was revised to a slower pace of acceleration from Q1, well below the estimate of 4% release came in at 2.5%. 

Other Markets

Additionally, foreign currency trading market volatility got some attention this week, with the Japanese currency (Yen) advancing a rally since the US Dollar ongoing downfall, punching the most robust level against the Dollar since November of 2016 climbing higher 1.6%, with the pair (USDJPY)  finishing at a ten-month low at 107.78.  The Gold settled at a 13-month high at $1,351.10 per once with the positive 2.3% gain.

What's Ahead for Next Week

Next week, while assessing the impact of Irma and grappling with the uncertainties as mentioned above, the economic calendar will likely regain some focus. The economic calendar picks up in the latter part of next week with the release of reports on industrial production, retail sales, producer and consumer price inflation.


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