CFD Markets News and Forecasts — 05-07-2018

Информационно-аналитический отдел TeleTrade

Major US stock indices have risen markedly, as signs that Washington may abandon plans to raise tariffs for European cars have somewhat eased fears about trade.

In addition, investors were acting out data on the United States. The report from Automatic Data Processing (ADP) showed that the growth rate of employment in the private sector of the US stalled in June, contrary to the forecasts of experts. According to the report, in June the number of employed increased by 177 thousand people compared with the figure for May at 178 thousand. Analysts had expected that the number of employed will increase by 190 thousand.

At the same time, the number of Americans applying for new unemployment benefits rose last week, but remained close to historic lows. Initial applications for unemployment benefits, a gauge of layoffs across all states, increased by 3000 to 231,000, seasonally adjusted for the week to June 30. Economists were expecting 225,000 new applications. In addition, the index of business activity in the US services, calculated by the Institute for Supply Management (ISM), rose in June to a level of 59.1 points compared to 58.6 points in May. Analysts predicted that the index will deteriorate to 58.3.

The focus of investors' attention was also the protocol of the last meeting of the Fed. The document said that the Fed officials at a meeting in June spoke in more detail about the prospects for rates in case of such a rapid acceleration of economic growth, which could cause the formation of soap bubbles or unsustainable price pressure. This may indicate the changing prospects of the US economy. "The participants of the meeting, in general, came to the conclusion that it would probably be advisable to continue the gradual increase of the key interest rate to a level that corresponds or is slightly higher than their long-term estimates by 2019 or 2020," the protocols noted.

Most DOW components recorded a rise (25 out of 30). The leader of growth was shares of Intel Corporation (INTC, + 2.64%). Outsider were shares of Chevron Corporation (CVX, -0.51%).

All sectors of S & P finished trading in positive territory. The technological sector grew most (+ 1.4%).

At closing:

Dow 24,356.74 +181.92 +0.75%

S & P 500 2,736.61 +23.39 +0.86%

Nasdaq 100 7,586.43 +83.75 +1.12%

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.2 million barrels from the previous week. At 417.9 million barrels, U.S. crude oil inventories are about 2% below the five year average for this time of year.

Total motor gasoline inventories decreased by 1.5 million barrels last week and are about 6% above the five year range. Finished gasoline and blending components inventories both decreased last week.

Distillate fuel inventories increased by 0.1 million barrels last week and are about 13% below the five year average for this time of year. Propane/propylene inventories increased by 2.9 million barrels last week and are about 10% below the five year average for this time of year. Total commercial petroleum inventories increased by 3.3 million barrels last week.

Anthony Nieves, Chair of the Institute for Supply Management (ISM) Non-Manufacturing Business Survey Committee:

"The NMI registered 59.1 percent, which is 0.5 percentage point higher than the May reading of 58.6 percent. This represents continued growth in the non-manufacturing sector at a slightly faster rate. The Non-Manufacturing Business Activity Index increased to 63.9 percent, 2.6 percentage points higher than the May reading of 61.3 percent, reflecting growth for the 107th consecutive month, at a faster rate in June. The New Orders Index registered 63.2 percent, 2.7 percentage points higher than the reading of 60.5 percent in May. The Employment Index decreased 0.5 percentage point in June to 53.6 percent from the May reading of 54.1 percent".

What respondents are saying:

"Tariffs, freight [issues] and labor shortages continue to have an inflationary influence on costs." (Construction)

"Positive outlook - business activity on the uptick." (Finance & Insurance)

"Shortage of IV solutions and drugs continues to be an issue." (Health Care & Social Assistance)

"Crude prices are causing concern, as it is a driver in newsprint inks. Tariffs on paper and aluminum are causing apprehension about future pricing. Suppliers are posturing and threatening price increases, and we are doing our best to reject increases." (Information)

"Trade tariffs are creating price uncertainty." (Management of Companies & Support Services)

U.S. stock-index futures rose on Tuesday, as reports about the U.S. proposal to the EU to eliminate car-import tariffs offset concerns over tensions with China.

Global Stocks:

Wall Street. Stocks before the bell

(company / ticker / price / change ($/%) / volume)

Target price changes before the market open

Facebook (FB) target raised to $275 at BTIG Research

In the week ending June 30, the advance figure for seasonally adjusted initial claims was 231,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 227,000 to 228,000. The 4-week moving average was 224,500, an increase of 2,250 from the previous week's revised average. The previous week's average was revised up by 250 from 222,000 to 222,250.

• Such a Deal With US Only Possible in Negotiations With EU

Private sector employment increased by 177,000 jobs from May to June according to the June ADP National Employment Report.

"The labor market continues to march towards full employment," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "Healthcare led job growth once again and trade rebounded nicely."

Mark Zandi, chief economist of Moody's Analytics, said, "Business' number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse. These labor shortages will only intensify across all industries and company sizes."

Eurozone retail sales rose for the second successive month in June, according to the latest PMI survey data from IHS Markit. The headline IHS Markit Eurozone Retail PMI - which tracks the month-onmonth changes in retail sales in the bloc's biggest three economies combined - was little-changed from May's 51.7 at 51.8, signalling further modest growth. This followed a contraction in April, the first since March 2017.

The overall increase reflected strong growth in Germany, where monthly sales rose by the most since July 2015. In contrast, both France and Italy posted modest declines compared with May.

• Officials said almost two-thirds of those goods are made by foreign companies, including American-owned firms, in China.

The consumer price index (CPI) remained stable in June 2018 compared with the previous month, reaching 102.1 points (December 2015=100). Inflation was 1.1% compared with the same month of the previous year. These are the results of the Federal Statistical Office (FSO).

The stability of the index compared with the previous month is the result of opposing trends that counterbalanced each other overall. Prices for international package holidays, fruiting vegetables and fuel recorded an increase. In contrast, prices for clothing, footwear and air transport decreased.

• Generali Will Keep 10.1% Stake and One Seat in Supervisory Board

Based on provisional data, the Federal Statistical Office (Destatis) reports that price-adjusted new orders in manufacturing had increased in May 2018 a seasonally and calendar adjusted 2.6% on the previous month. For April 2018, revision of the preliminary outcome resulted in a decrease of 1.6% compared with March 2018 (primary -2.5%). Price-adjusted new orders without major orders in manufacturing had increased in May 2018 a seasonally and calendar adjusted 2.2% on the previous month.

Domestic orders increased by 4.3% and foreign orders increased by 1.6% in May 2018 on the previous month. New orders from the euro area were up 6,7%, new orders from other countries decreased 1.3% compared to April 2018.

In May 2018 the manufacturers of intermediate goods saw new orders fall by 0.6% compared with April 2018. The manufacturers of capital goods showed increases of 4.7% on the previous month. For consumer goods, an increase in new orders of 4.9% was recorded.

The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $'s. This must be a two way street. REDUCE PRICING NOW!

EUR/USD

Resistance levels (open interest**, contracts)

$1.1769 (3579)

$1.1743 (2016)

$1.1720 (1134)

Price at time of writing this review: $1.1657

Support levels (open interest**, contracts):

$1.1637 (2949)

$1.1594 (2621)

$1.1547 (4446)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date July, 9 is 101542 contracts (according to data from July, 3) with the maximum number of contracts with strike price $1,1550 (4446);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3356 (807)

$1.3313 (681)

$1.3276 (1002)

Price at time of writing this review: $1.3226

Support levels (open interest**, contracts):

$1.3160 (1802)

$1.3129 (1820)

$1.3089 (2282)

Comments:

- Overall open interest on the CALL options with the expiration date July, 9 is 25238 contracts, with the maximum number of contracts with strike price $1,3650 (2456);

- Overall open interest on the PUT options with the expiration date July, 9 is 33225 contracts, with the maximum number of contracts with strike price $1,3250 (2609);

- The ratio of PUT/CALL was 1.32 versus 1.31 from the previous trading day according to data from July, 3.

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.