CFD Markets News and Forecasts — 07-05-2014

Nikkei 14,457.51 -27.62 -0.19%

Hang Seng 21,976.33 -284.34 -1.28%

Shanghai Composite 2,028.04 +0.68 +0.03%

S&P 1,878.21 +10.49 +0.56%

NASDAQ 4,067.67 -13.09 -0.32%

Dow 16,518.54 +117.52 +0.72%

FTSE 1,344.65 +1.42 +0.11%

CAC 4,446.44 +18.37 +0.41%

DAX 9,521.3 +53.77 +0.57%

EUR/USD $1,3910 -0,10%

GBP/USD $1,6953 -0,12%

USD/CHF Chf0,8761 +0,22%

USD/JPY Y101,86 +0,13%

EUR/JPY Y141,70 +0,03%

GBP/JPY Y172,68 +0,02%

AUD/USD $0,9326 -0,15%

NZD/USD $0,8655 -0,59%

USD/CAD C$1,0896 +0,03%

00:00 France Bank holiday

01:30 Australia Changing the number of employed April 18.1 7.5

01:30 Australia Unemployment rate April 5.8% 5.9%

02:00 China Trade Balance, bln April 7.7 13.1

05:45 Switzerland SECO Consumer Climate Quarter I 2 3

06:00 Germany Industrial Production s.a. (MoM) March +0.4% +0.2%

06:00 Germany Industrial Production (YoY) March +4.8%

07:00 United Kingdom Halifax house price index April -1.1% +0.8%

07:00 United Kingdom Halifax house price index 3m Y/Y April +8.7% +9.1%

07:15 Switzerland Consumer Price Index (MoM) April +0.4% +0.1%

07:15 Switzerland Consumer Price Index (YoY) April 0.0% +0.1%

11:00 United Kingdom BoE Interest Rate Decision 0.50% 0.50%

11:00 United Kingdom Asset Purchase Facility 375 375

11:00 United Kingdom MPC Rate Statement

11:45 Eurozone ECB Interest Rate Decision 0.25% 0.25%

12:15 Canada Housing Starts April 157 177

12:30 Eurozone ECB Press Conference

12:30 Canada New Housing Price Index March +0.2% +0.2%

12:30 U.S. Initial Jobless Claims May 344 328

European stocks were exhibiting a mixed trend. The weaker-than-expected earnings results from companies across Europe and tensions in Ukraine had an impact on stock markets.

In addition, German factory orders declined 2.8% in March from an increase of 0.9% in February. February’s figure was revised up from 0.6%. Analysts had forecasted a 0.5% rise.

French industrial production decreased 0.7% in March from an increase of 0.1% in February. Analysts had expected a 0.4% increase.

Fiat SpA shares declined 12.0% after the release of the weaker-than-expected first quarter earnings.

Indexes on the close:

Name                                   Price                                    Change                 Change %

FTSE 100                             6,796.44                              -2.12                        -0.03%

DAX                                      9,521.3                                +53.77                     +0.57%

CAC 40                                 4,446.44                              +18.37                    -0.10%

The U.S. dollar traded mixed against the most major. The U.S. currency was supported by the speech of Russian President Vladimir Putin. He said that Russia is ready to discuss a way out of the Ukrainian crisis with the head of the Organization for Security and Co-operation in Europe. But the Fed Chair Janet Yellen’ s speech to Congress’ Joint Economic Committee put under pressure the U.S. dollar. Janet Yellen said that the economy will grow faster in 2014, but the Fed will keep interest rates at their historically low levels after the central bank closes out its bond purchasing program.

In addition, U.S. nonfarm productivity fell 1.7% in the first quarter from a 1.8% increase in the previous quarter. Analysts had expected a 0.5% decrease. U.S. unit labour costs climbed 4.2% in the first quarter from a 0.1% decrease in the previous quarter. Analysts had forecasted a 2.3% rise.

The euro traded little changed against the U.S. dollar despite the disappointing economic data from Germany and France. German factory orders declined 2.8% in March from an increase of 0.9% in February. February’s figure was revised up from 0.6%. Analysts had forecasted a 0.5% rise. French industrial production decreased 0.7% in March from an increase of 0.1% in February. Analysts had expected a 0.4% increase.

The Swiss franc traded lower against the U.S. dollar. Market participants remained unimpressed by the rise of the central bank’s foreign currency reserves. The Swiss National Bank (SNB) had released that the foreign currency reserves climbed to 438.9 billion Swiss francs in April from 437.9 billion Swiss francs in March. This figure shows the SNB had not bought euros to defend EUR/CHF 1.20 exchange rate floor.

The British pound traded lower against the U.S. dollar. No economic data was published in Great Britain.

The Canadian dollar traded mixed against the U.S. dollar. The Canadian currency declined after the release of new building permits. Building permits in Canada declined 3.0% in March (February: -11.6%). Analysts had expected a 4.3% increase. Later, the Canadian dollar recovered its losses after the Fed Chair Janet Yellen’ s speech to Congress’ Joint Economic Committee.

The New Zealand dollar dropped against the U.S. dollar after the speech of the Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler. He said the New Zealand remains strong and the central bank could intervene to lower the domestic currency.

New Zealand's unemployment rate remained unchanged at 6.0% in the first quarter. Analysts had forecasted the decrease to 5.8%.

The number of employed people in New Zealand climbed 0.9% in the first quarter (4. quarter 2013: +1.0% (revised down from 1.1%). The projected figure was an increase of 0.7%.

The Australian dollar traded mixed against the U.S. dollar. Retail sales in Australia increased 0.1% in March. February’s figure was revised up to 0.3% from 0.2%. Analysts had expected an increase of 0.4%.

The Japanese yen traded mixed against the U.S. dollar. The Bank of Japan released the monetary policy meeting minutes. Most members of the central agreed to keep easing monetary policy until inflation target of 2% is reached.

The price of oil rose moderately after a government report showed that U.S. crude inventories declined for the previous week .

Data from the Department of Energy on changes in stocks in the week April 28 - May 3, showed :

- Oil reserves fell by 1.781 million barrels to 397.576 million barrels ;

- Gasoline inventories increased by 1,608 million barrels . to 213.18 million barrels . ;

- Distillate stocks fell by 0.447 million barrels . to 114.002 million barrels .

- Refining capacity utilization rate of 90.2 % against 91.0 % a week earlier ;

- Oil terminal in Cushing declined by 1.395 million barrels . to 24.033 million barrels .

Experts polled by Bloomberg, expected increase in oil reserves by 1250 thousand barrels , gasoline inventories increase by 500 thousand barrels and distillate stocks increase by 750 thousand barrels.

Recall also that their data were presented yesterday Institute of oil API. They showed :

- Capacity utilization in the week 91.3 % vs. 90.5%

- Distillate stocks last week 0.763 million barrels

- Gasoline inventories last week 2.4 million barrels

- Crude oil inventories -1.8 million barrels

Meanwhile, adding that oil traders continued to monitor developments in Ukraine , where the conflict between the government and pro-Russian separatists continued to deteriorate , leading to fears that the crisis will grow deeper tightening U.S. opposition . The West accuses Russia manual separatist rebellion in the east of Ukraine , after the annexation of the Crimea in the past month.

The dynamics also influenced word Fed chief Yellen , who gave a rather positive assessment of the economic outlook , speaking before Congress . Nevertheless , it signaled that her optimism has not changed the central bank's plan to retain short-term interest rates near zero for the foreseeable future .

June futures on U.S. light crude oil WTI (Light Sweet Crude Oil) rose to $ 100.66 per barrel on the New York Mercantile Exchange (NYMEX).

June futures price for North Sea Brent crude oil mixture rose $ 0.31 to $ 107.50 a barrel on the London exchange ICE Futures Europe.

Fed Chair Janet Yellen reported to Congress’ Joint Economic Committee:

- The U.S. economy will pick up in the second quarter;

- The weak growth in the first quarter caused by the cold winter in the USA;

- Too many Americans remain unemployed;

- The inflation rate of 1% is too low. The Fed’s target is a 2% inflation rate. Fed is monitoring “inflation developments closely”;

- The Fed will keep interest rates at their historically low levels after the central bank closes out its bond purchasing program;

- The growth of the U.S. economy should be better in 2014 than a year ago. The economy grew 2.6% in 2013;

- Unemployment should continue to “gradually” decline;

- “Heightened geopolitical tensions” could threat the forecasts.

Gold prices fell sharply today , while reaching the lowest level since May 5. Impact on the dynamics of the words of Russian President Vladimir Putin that he was ready to discuss the crisis in Ukraine. Also, market participants' attention was focused on the performance of the Federal Reserve System Janet Yellen .

It is worth noting that in the first half of the session price almost reached the level of $ 1315 per ounce on fears that the confrontation between pro-Russian separatists and government forces in Ukraine may increase. Nevertheless , the dynamics changed quickly after Putin said he would discuss the matter with the head of the Organization for Security and Cooperation in Europe .

Falling prices also continued after the statements Yellen . She noted that while the rate of inflation in the United States moves to around 2%, and the economy improves, the Fed will continue to minimize the QE program at a moderate pace . Moreover, Yellen added that the first rate increase will depend on the progress made by the Committee under its mandate.

As for the physical market, buying gold in Asia rose today as markets reopened after a public holiday in Japan , Hong Kong and South Korea, dealers said .

Chinese purchases have been moderate , as a weak currency kept from buying in large quantities. Meanwhile, the Chinese Association of gold stated that China's demand for gold bullion fell by almost 44 percent year on year in the first quarter of 2014 , while the total consumption of gold increased by 0.8 percent.

To date, the cost of the June gold futures on the COMEX fell to $ 1297.50 .

Gold declines toward 1,300 due to the speech of Russian President Vladimir Putin. He said that Russia is ready to discuss a way out of the Ukrainian crisis with the head of the Organization for Security and Co-operation in Europe.

EUR/USD $1.3870, $1.3880, $1.3890, $1.3930

USD/JPY Y101.50, Y102.00, Y103.00

AUD/USD $0.9255, $0.9280, $0.9300, $0.9325

USD/CAD C$1.0875, C$1.0900, C$1.0975, C$1.1000

U.S. stock-index futures advanced as investors weighed corporate earnings from First Solar Inc. (FSLR), Electronic Arts (EA) and Walt Disney Co (DIS) before Federal Reserve Chair Janet Yellen addresses Congress.

Global markets:

Nikkei 14,033.45 -424.06 -2.93%

Hang Seng 21,746.26 -230.07 -1.05%

Shanghai Composite 2,010.08 -17.95 -0.89%

FTSE 6,784.22 -14.34 -0.21%

CAC 4,438.57 +10.50 +0.24%

DAX 9,513.39 +45.86 +0.48%

Crude oil $100.04 (+0.55%)

Gold $1305.10 (-0.28%)

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

Upgrades:

Downgrades:

Merck (MRK) downgraded to Equal-Weight from Overweight at Morgan Stanley

eBay (EBAY)  downgraded to Neutral from Buy at SunTrust

Other:

EUR/USD

Offers $1.4000, $1.3980/85, $1.3960

Bids  $1.3900

GBP/USD

Offers $1.7040/50, $1.7020, $1.7000

Bids  $1.6955/50, $1.6930, $1.6919/890, $1.6850

AUD/USD

Offers  $0.9450, $0.9400

Bids  $0.9320, $0.9305/00, $0.9255/50, $0.9220, $0.9200

EUR/JPY

Offers  Y142.50, Y142.20, Y141.95/00

Bids  Y141.00, Y140.50, Y140.20, Y140.00

USD/JPY

Offers  Y102.50, Y102.00

Bids  Y101.35/30, Y101.20, Y101.00

EUR/GBP

Offers 

Bids  stg0.8190-80, stg0.8150, stg0.8120, stg0.8100

Economic calendar (GMT0):

01:30    Australia                Retail sales (MoM)                    March   +0.3%  +0.4%     +0.1%

01:30    Australia                Retail Sales Y/Y                        March   +4.9%                  +5.7%

01:45    China                    HSBC Services PMI                  April      51.9                        51.4

05:45    Switzerland           Unemployment Rate                April      3.2%      3.2%       3.2%

06:00    Germany               Factory Orders s.a. (MoM)       March   +0.9%   +0.5%    -2.8%

06:00    Germany               Factory Orders n.s.a. (YoY)     March   +6.5%   +4.3%    +1.5%

06:45    France                  Trade Balance, bln                    March    -3.4       -4.0         -4.9

06:45    France                  Industrial Production, m/m       March   +0.1%   +0.4%     -0.7%

06:45    France                  Industrial Production, y/y         March   -0.5%                    -0.8%

07:00    Switzerland           Foreign Currency Reserves       April       437.9    438.4       438.9

The U.S. dollar traded mixed against the most major currencies ahead of the testimony from Fed Chair Janet Yellen later in the day. In addition, U.S. nonfarm productivity and U.S. unit labour costs will be released today. U.S. nonfarm productivity should decline 0.5% in the first quarter from a 1.8% increase in the previous quarter. U.S. unit labour costs should climb 2.3% in the first quarter from a 0.1% decrease in the previous quarter.

The euro traded higher against the U.S. dollar despite the disappointing economic data from Germany and France. German factory orders declined 2.8% in March from an increase of 0.9% in February. February’s figure was revised up from 0.6%. Analysts had forecasted a 0.5% rise. French industrial production decreased 0.7% in March from an increase of 0.1% in February. Analysts had expected a 0.4% increase.

The Swiss franc traded mixed against the U.S. dollar. Market participants remained unimpressed by the rise of the central bank’s foreign currency reserves. The Swiss National Bank (SNB) had released that the foreign currency reserves climbed to 438.9 billion Swiss francs in April from 437.9 billion Swiss francs in March. This figure shows the SNB had not bought euros to defend EUR/CHF 1.20 exchange rate floor.

The British pound increased to 9-week highs against the euro. The sterling was supported by speculation the Bank of England will hike interest rates due to strong growth of the U.K. economy. The British currency traded lower against the U.S. dollar. No economic data was published in Great Britain.

EUR/USD: the currency pair climbed to $1.3932

GBP/USD: the currency pair declined to $1.6954

USD/JPY: the currency pair was up to Y101.70

The most important news that are expected (GMT0):

12:30    Canada                  Building Permits (MoM)                            March        -11.6% +4.2% 

12:30    U.S.                       Nonfarm Productivity, q/q (Preliminary)  Quarter I     +1.8%  -0.5%  

12:30    U.S.                       Unit Labor Costs, q/q (Preliminary)          Quarter I      -0.1%  +2.3% 

14:00    U.S.                       Fed Chairman Janet Yellen Speaks                                                                    

23:01    United Kingdom     RICS House Price Balance                        April             57%      55%

European stocks dropped due to the weaker-than-expected earnings results from companies across Europe. In addition, the disappointing economic data in Germany and France and ongoing violence in Ukraine also had a negative impact on stock markets.

German factory orders declined 2.8% in March from an increase of 0.9% in February. February’s figure was revised up from 0.6%. Analysts had forecasted a 0.5% rise.

French industrial production decreased 0.7% in March from an increase of 0.1% in February. Analysts had expected a 0.4% increase.

Fiat SpA shares declined 8.3% after the release of the weaker-than-expected first quarter earnings.

Current figures:

Name                                   Price                                    Change                 Change %

FTSE 100                             6,773.21                             -25.35                     -0.37%

DAX                                      9,457.28                             -10.25                     -0.11%

CAC 40                                 4,423.73                              -4.34                      -0.10%

Asian stock indices plunged due to a stronger yen and losses on Wall Street. Stocks of the export companies traded lower as the yen increased against major currencies. Demand for the safe haven yen was increasing. A stronger yen makes Japanese goods less competitive abroad.

Concerns over the China’s economy had a negative impact on Chinese stock indices. China’s HSBC Services PMI decreased to 51.4 in April from 51.9 in March.

Indexes on the close:

Nikkei 225                     14,033.45         -424.06     -2.93%

Hang Seng                     21,746.26         -230.07     -1.05%

Shanghai Composite      2,010.08           -17.95       -0.89%

SoftBank Corp., the biggest investor in Alibaba Group Holding Ltd., shares dropped 5.1% after Alibaba filed for an initial public offering in New York on Wednesday.

EUR/USD $1.3870, $1.3880, $1.3890, $1.3930

USD/JPY Y101.50, Y102.00, Y103.00

AUD/USD $0.9255, $0.9280, $0.9300, $0.9325

USD/CAD C$1.0875, C$1.0900, C$1.0975, C$1.1000

The Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler said at a dairy conference in Hamilton:

- The New Zealand dollar remains strong and is till overvalued;

- The central bank could intervene in the currency market to sell New Zealand dollars if New Zealand’s currency remains strong while commodity prices fall.

Economic calendar (GMT0):

01:30    Australia                Retail sales (MoM)                    March   +0.3%  +0.4%     +0.1%

01:30    Australia                Retail Sales Y/Y                        March   +4.9%                  +5.7%

01:45    China                    HSBC Services PMI                  April      51.9                        51.4

05:45    Switzerland           Unemployment Rate                April      3.2%      3.2%       3.2%

06:00    Germany               Factory Orders s.a. (MoM)       March   +0.9%   +0.5%    -2.8%

06:00    Germany               Factory Orders n.s.a. (YoY)     March   +6.5%   +4.3%    +1.5%

06:45    France                  Trade Balance, bln                    March    -3.4       -4.0         -4.9

06:45    France                  Industrial Production, m/m       March   +0.1%   +0.4%     -0.7%

06:45    France                  Industrial Production, y/y         March   -0.5%                    -0.8%

07:00    Switzerland           Foreign Currency Reserves       April       437.9    438.4       438.9

The U.S. dollar traded mixed against the most major currencies ahead of the testimony from Fed Chair Janet Yellen later in the day.

The New Zealand dollar dropped against the U.S. dollar after the speech of the Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler. He said the New Zealand remains strong and the central bank could intervene to lower the domestic currency.

New Zealand's unemployment rate remained unchanged at 6.0% in the first quarter. Analysts had forecasted the decrease to 5.8%.

The number of employed people in New Zealand climbed 0.9% in the first quarter (4. quarter 2013: +1.0% (revised down from 1.1%). The projected figure was an increase of 0.7%.

The Australian dollar traded little changed against the U.S. dollar. Retail sales in Australia increased 0.1% in March. February’s figure was revised up to 0.3% from 0.2%. Analysts had expected an increase of 0.4%.

The Japanese yen climbed against the U.S. dollar due to increasing demand for the safe haven yen. The Bank of Japan released the monetary policy meeting minutes. Most members of the central agreed to keep easing monetary policy until inflation target of 2% is reached.

EUR/USD: the currency pair traded mixed

GBP/USD: the currency pair traded mixed

USD/JPY: the currency pair declined to Y101.55

NZD/USD: the currency pair declined to $0.8687

The most important news that are expected (GMT0):

12:30    Canada                  Building Permits (MoM)                            March        -11.6% +4.2%  

12:30    U.S.                       Nonfarm Productivity, q/q (Preliminary)  Quarter I     +1.8%  -0.5%   

12:30    U.S.                       Unit Labor Costs, q/q (Preliminary)          Quarter I      -0.1%  +2.3%  

14:00    U.S.                       Fed Chairman Janet Yellen Speaks                                                                     

19:00    U.S.                       Consumer Credit                                     March          16.5      15.4      

23:01    United Kingdom     RICS House Price Balance                        April             57%      55%

EUR / USD

Resistance levels (open interest**, contracts)

$1.3979 (2780)

$1.3957 (4926)

$1.3945 (2111)

Price at time of writing this review: $ 1.3924

Support levels (open interest**, contracts):

$1.3903 (230)

$1.3875 (1007)

$1.3837 (1476)

Comments:

- Overall open interest on the CALL options with the expiration date May, 9 is 29401  contracts, with the maximum number of contracts with strike price $1,3900 (4926);

- Overall open interest on the PUT optionswith the expiration date May, 9 is 36911 contracts, with the maximum number of contractswith strike price $1,3600 (4074);

- The ratio of PUT/CALL was 1.26 versus 1.23 from the previous trading day according to data from May, 6

GBP/USD

Resistance levels (open interest**, contracts)

$1.7200 (1066)

$1.7100 (1400)

$1.7003 (4238)

Price at time of writing this review: $1.6978

Support levels (open interest**, contracts):

$1.6899 (652)

$1.6800 (1297)

$1.6700 (1028)

Comments:

- Overall open interest on the CALL options with the expiration date May, 9 is  22857 contracts, with the maximum number of contracts with strike price $1,7000 (4238);

- Overall open interest on the PUT optionswith the expiration date May, 9 is 22149 contracts, with the maximum number of contracts with strike price $1,6200 (1869);

- The ratio of PUT/CALL was 0.97 versus 1.00 from the previous trading day according to data from May, 6

* - 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.