Financial market research and analysis

The risk-off trading pulled the Asian stocks lower on Friday, although the major Asian stock indices are set for a positive weekly close for the fifth straight week. MSCI Asia Pacific index advanced to the highest levels since June 2015.

The European markets opened lower on Friday, on the back of a mixed bag of corporate earnings announcements.

Of course, the stronger pound is taking its toll on the FTSE. The FTSE slipped below the 200-day moving average (7262p) at the open and is set to challenge last week’s low of 7250p.

It has been a busy week for the UK’s banking sector. RBS (-2.09%) and Standard Chartered (-0.48%) are the final banks to announce fourth quarter results to wrap up the week.

RBS posted its ninth straight year of annual losses. The bank’s net yearly loss spiked to 6.96 billion pounds from 1.98 billion a year earlier. Still, the full year adjusted operating profit, £3.67bn, topped analyst estimates, £3.10bn.

The bank’s CFO said that it has been yet another difficult year for RBS, while the bank is hoping to turn into profits as early as 2018. An additional £2 billion of cost cuts are due over the next four years, which will likely shred hundreds of more jobs along the way.


Japanese stocks under pressure as yen strengthens past the 100-day average against the greenback 

Nikkei (-0.45%) and Topix (-0.39%) closed the week on a negative daily note, as the yen breached an important technical level against the greenback. The USDJPY slipped below the 100-day moving average (112.98) for the first time since Donald Trump won the presidential election on November 9th. The pair is now testing the key mid-term support at 112.50 (major 38.2% retracement on Trump rally), if broken, should suggest a mid-term bearish reversal for a deeper sell-off to 110.60 (50% level) before the 110.00 mark.


Flight to safety benefit to gold, silver

 Gold shortly broke the $1255 resistance (major 61.8% retracement on post-Trump decline), as such gave a further positive spin to the gold market. It is just a matter of time before the gold diggers race to the $1262 level (200-day moving average).

Likewise, silver is set for the ninth consecutive week of gains, as apparently investors are taking safety measures against the surprising, unprecedented rally on the US stock markets.


Rising skepticism on swelling US stock prices 

The US stocks continue testing the top of the range; meanwhile an increasing number of traders are getting ready to sell the tops.

The S&P500 traded at a fresh all-time high of $2368.26 on Thursday, as the WTI crude ticked up to $54.94 after the most recent weekly data showed a much slower than expected rise in the US oil inventories. Yet, unable to build on the positive momentum, the S&P500 rapidly bounced back to the day low of $2355.09.

Comparably, the Dow Jones advanced to $20840.70, a fresh all-time high as well, yet closed the day 30 points below that level.

The US stock futures traded in the red heading into the last trading day of the week. The S&P500 and the Dow Jones are set for a flat to slightly negative open.

The Dow Jones is called 20 points softer at $20790 at the US open.

Fresh record highs in the US stock markets are no longer surprising, in contrary, they gradually increase the anxiety in the market. Nobody knows when and how the reflation story would end.