Kospi Assisted By Policy of The Fed
At the close of trading on the stock exchange yesterday South Korea, the Kospi index closed up 0.66 percent, or 13.09 points, at 1,987.99. Strengthening the Kospi index pushed the Fed’s decision to keep interest rates the US.
The US Federal Reserve yesterday issued a dovish statement, which slashed the estimated amount of interest rate hikes in 2016 and 2017.
If at a meeting in December the US Federal Reserve projected four interest rate hikes in 2016, then in a new forecast released yesterday, that number is trimmed to two. Fed officials also cut their expectations for economic growth and inflation.
In addition to just two interest rate increases this year, the Federal Open Market Committee (FOMC) also projecting only two hikes in 2017, according to the latest Economic Outlook Summary.
Fed policy made the US dollar weakened, boosting the won currency to its highest level this year. South Korean Won currency closed at 1,173.30 to the US dollar, up 20.00 won, or 1.68 percent, from Wednesday’s close.
Meanwhile, US crude oil futures prices 1.22 percent higher at $ 38.93 a barrel after settling up 5.8 percent in US trading overnight, while the price of Brent crude oil futures rose 0.47 percent, or 19 cents, in $ 40.52 after rising 4 percent overnight.
The gains came after the weekly crude oil inventories are smaller than expected, and the positive news that major oil producers will meet on April 17 in Qatar to discuss production freezing.
The weakening of the US dollar against major currencies and the increase in oil prices encourages foreign investors to buy Korean stocks. Recorded foreign net purchases for trading Thursday, buying 423.26 billion won ($ 360 million) for local stocks were great. Individuals and institutions sold a net 442.75 billion won which limit further gains Kospi index.
In late trading, shares of the technology sector, petrochemicals, automobiles and steel led the gains. Among the highest, Samsung Electronics shares rose 0.56 percent to 1.263 million won, SK Innovation soared 4.18 percent to 162,000 won, POSCO steel company’s shares rose 4.43 percent to 212,000 won.
As for the Kospi index was observed futures rose 1.60 points or 0.66% at 245.20, up from its previous close at 243.60.
On the morning of economic data will be released in February PPI, which indicated a monthly increase from the previous decline, but on an annual basis indicated weakened.
Technically,
Resistance: 245.20 245.60 246.10 High / Low: 246.20 / 244.65
Support: Running 242.60 243.00 244.30 Price: 244.85
Comment: For intraday trade today suggest Buy 244.00 stop loss at the level of 243.60 at the level of the target at the level of 245.70.
Euro Skyrocketing
Indicators warmest at once signal the start of the US industry recorded worst situation. The situation is more clearly gives alarm the yellow light on the fate of the US domestic economy. While the euro is still exploit the opportunities of the euphoria of the survival rate in the US to penetrate the psychological level.
Fluctuations again struck the labor sector. In the previous week period, where there have been corrections number of applicants with significant life assurance, tonight surge must be experienced although still below analysts’ forecasts. Unemployment Claims original level calculations by economists estimated in the range of 267 thousand, but ultimately through the latest data, the results only in Area 265 thousands of applicants. The conditions Remain in position exceeds the previous week perched results in the area of 259 thousand applicants.
For policy makers in the field of economics has been duly observe the state of the sector’s workforce. Given in many other sectors are struggling with situations of pressure coming from abroad due to the effects of the global economic slowdown. Do not let it potential in the sector’s labor movement turned into an additional economic burden.
The potential to transcend the limits of psychological labor sector as much as three hundred thousand over the last year up to now has not been exceeded, but that does not mean the possibility of it not going to happen.
If the conditions of the labor sector is maintained below that level, many analysts of household spending potential of these workers, as long as it still can help turnaround the economy. The condition is expected to provide stimulation for other sectors to remain of the view there is still hope for minimal chance of domestic US.
Especially when viewed as a whole, the number of applicants for unemployment benefits every week on the upswing. Recently the data in early March revealing there are approximately 2:24 million people who still continue to expect help from the government.
Sentiment that emerged from the land of Uncle Sam as more and pave the way for the euro to the higher warpage. Especially after yesterday Greenback getting hit persistence of the effect on interest rates and on added deteriorating appearance of the labor sector. After yesterday broke through the psychological threshold 1.1200, today the rest of the Euro monitored power is still too large for the Greenback to fight. 1.1300 dramatic level easily passed without much correction. This level re-open the bullish potential for the euro after so long in the crush of the Greenback.
Technically,
Resistance: 1.1350 1.1395 1.1435 High / Low: 1.1318 / 1.1304
Support: 1.1270 1.1230 1.1190 Running Price: 1.1310
Comment: For intraday trade today suggest Sell at level of 1.1355 1.1390 stop loss at the level of the target at the level of 1.1260.
Gold Step On, Day After FOMC
Gold prices ended the US trading session with a sharp rise in the day yesterday, following a sharp decline in the US dollar index up to a five month low and crude oil prices reached above $ 40 per barrel.
Markets in the day yesterday still digesting the results of the FOMC meeting which ended on Wednesday with dovish monetary policy statement. While the Fed did not make policy moves this week, as expected, implied that the US central bank just raised interest rates twice this year – down from three or four hikes, which most analysts expect this year. FOMC also downgraded its assessment of the outlook for US economic growth.
Crude oil prices moved higher and hit a 2.5-month on Thursday, on reports a major crude producer of OPEC and Russia will meet on April 17 to discuss production limits. The rising trend in crude oil and the US dollar index which fell is one of the elements bullish for the raw commodity sector.
US economic data released on yesterday only a minor impact on the precious metals market.
Technically,
Resistance: 1261.10 1263.50 1265.80 High / Low: 1260.50 / 1257.60
Support: 1256.00 1253.10 1251.00 Running Price: 1259.40
Comment: For intraday trade today suggest sell at level of 1262.00 stop loss at 1264.50 and the target at the level of 1252.00.
