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Uncertain End To 2018, EU Up On Trade Hopes, US Equities Surge On Final Trading Day Of Year

Thomas Hughes
Today’s market action is going to be light, most institutional and big-money investors are away on holiday, and that should continue into the end of the week. There is very little economic data due save the NFP on Friday, and there are no earnings reports material to broad market performance.

Asian Markets Mixed On Final Trading Day Of 2018

Asian indices were mixed on the final trading day of 2018. While markets in Hong Kong and Australia were open for holiday-shortened sessions those in mainland China, Korea, and Japan were closed for the calendar New Year’s Eve celebration.



The Hong Kong Heng Seng index was the only one of two open for trading that closed with a gain. The China-centric index advanced more than 1.30% on hopes trade relations between the US and China were on the upswing. According to information from Beijing and Washington D.C. President’s Trump and Xi held a productive phone meeting that has set a new tone for the ongoing trade-dispute.



According to Trump the call was long and good although some analysts are quick to point out the fact Trump is most likely overstating the reality. Regardless, the meeting is another positive step that markets will be focusing on in the weeks to come.



In other news, Chinese official PMI was a mixed bag of results that adds to fear China’s economy is slowing faster than expected. The official Chinese Manufacturing PMI fell more than expected to 49.4. Anything under 50 is evidence of contraction within the manufacturing economy, economist had been expecting a number closer to 49.9. The good news is that Services PMI, a measure of the non-manufacturing sector, came in better than expected at 53.8 and up 0.4 from the previous month.

EU Up On Trade Hopes, Brexit Still A Problem

The EU markets were mixed in early Monday trading as investors prepare for the New Year’s Eve holiday. Most major bourses in the region were open except the German DAX. The FTSE was trading flat at midday while the French CAC was up a solid 1.5%. The US/China trade news was the leading market mover on Monday but not the only one.



In Brexit news the UK parliament is set to vote on Theresa May’s deal with the EU in two week’s time. The outcome of the vote is still highly questionable as many within May’s own government are not happy with the details. One of the major sticking points is the UK border between Ireland and Northern Ireland, a border that could be open for locals but closed to immigration.

US Equities Surge On Final Trading Day Of The Year

Futures trading was indicating a strong open for the US equities market on Monday, January 31st, 2018. The Dow Jones Industrial Average, the S&P 500, and the NASDAQ Composite were all looking at an advance slightly below 1.0% in the pre-market session. Comments from President Trump that significant progress had been made were taken at face value by a market desperately in need of good news.



Today’s market action is going to be light, most institutional and big-money investors are away on holiday, and that should continue into the end of the week. There is very little significant economic data except for the NFP on Friday, and there are no earnings reports material to broad market performance.

This article was originally posted on FX Empire

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