CFD Markets News and Forecasts — 08-05-2014

Nikkei 14,163.78 +130.33 +0.93%

Hang Seng 21,837.12 +90.86 +0.42%

Shanghai Composite 2,015.27 +5.19 +0.26%

S&P 1,875.63 -2.58 -0.14%

NASDAQ 4,051.5 -16.18 -0.40%

Dow 16,550.97 +32.43 +0.20%

FTSE 1,358.91 +14.26 +1.06%

CAC 4,507.24 +60.80 +1.37%

DAX 9,607.4 +86.10 +0.90%

EUR/USD $1,3839 -0,51%

GBP/USD $1,6930 -0,14%

USD/CHF Chf0,8801 +0,45%

USD/JPY Y101,64 -0,22%

EUR/JPY Y140,67 -0,73%

GBP/JPY Y172,08 -0,35%

AUD/USD $0,9367 +0,44%

NZD/USD $0,8642 -0,15%

USD/CAD C$1,0829 -0,62%

01:30 Australia RBA Monetary Policy Statement

01:30 China PPI y/y April -2.3% -1.8%

01:30 China CPI y/y April +2.4% +2.1%

05:00 Japan Leading Economic Index March 113.5

05:00 Japan Coincident Index March 113.0

06:00 Germany Current Account March 13.9

06:00 Germany Trade Balance March 15.7 16.9

08:30 United Kingdom Industrial Production (MoM) March +0.9% -0.1%

08:30 United Kingdom Industrial Production (YoY) March +2.7%

08:30 United Kingdom Manufacturing Production (MoM) March +1.0% +0.3%

08:30 United Kingdom Manufacturing Production (YoY) March +3.8%

08:30 United Kingdom Trade in goods March -9.7 -9.0

12:30 Canada Employment April 42.9 14.9

12:30 Canada Unemployment rate April 6.9% 6.9%

14:00 United Kingdom NIESR GDP Estimate April +0.9%

14:00 U.S. Wholesale Inventories March +0.5% +0.5%

14:00 U.S. JOLTs Job Openings April 4173 4210

22:00 U.S. FOMC Member Narayana Kocherlakota

European stocks increased supported by the ECB President Mario Draghi comments the ECB could add new stimulus measures in June to tackle low inflation. He added the low inflation rate in the context of strong euro is a cause for concern. The ECB President has not specified what kind of stimulus measures could be added by the ECB.

The Bank of England kept unchanged interest rate at 0.50% and the asset purchase plan remained at 375 billion pounds.

Barclays shares increased 8.1%. The company will cut 7,000 jobs at the investment bank to reduce its dependence on the unit. Barclays reported it is planning to cut 14,000 jobs worldwide this year, up from the 12,000 cuts announced in February.

Metro AG shares climbed 2.9% after announcing the better-than-expected earnings.

ProSiebenSat.1, German media group, increased 5.7% after the release of a 9.5 percent increase in first-quarter core earnings.

Rheinmetall AG shares were up 8% after posting a 12% sales increase in the first quarter.

Indexes on the close:

Name                                   Price                                    Change                 Change %

FTSE 100                             6,839.25                             +42.81                     +0.63%

DAX                                      9,607.4                              +86.10                     +0.90%

CAC 40                                 4,507.24                             +60.80                     +1.37%

The U.S. dollar traded higher against the most major currencies after the U.S. the Department of Labor released the number of initial jobless claims. The number of initial jobless claims declined by 26,000 to 319,000 from the previous week. Analysts had forecasted the decline by 20,000 to 325,000.

The euro declines and hits the low of Mai 5, 2014 against the U.S. dollar after the ECB President Mario Draghi said that the ECB could ease monetary policy in June to tackle low inflation. He added the low inflation rate in the context of strong euro is a cause for concern. The ECB President has not specified what kind of stimulus measures could be added by the ECB. Different stimulus measures are possible like further cut in interest rates, new liquidity support for banks or quantitative easing.

The British pound traded mixed against the U.S. dollar after the release of the BoE interest rate decision. The BoE kept unchanged interest rate at 0.50% and the asset purchase plan remained at 375 billion pounds. This decision was expected by market participants.

British house prices published by Halifax declined 0.2% in April. Analysts had forecasted a 0.8% increase.

The Canadian dollar hits 4-week highs against the U.S. dollar. The loonie was supported by the better-than-expected housing market figures. Canadian housing starts increased to 194,800 units in April, from 156,600 units in March. Analysts had forecasted an increase to 175,000 units.

The New Zealand dollar traded mixed against the U.S. dollar. In overnight trading, the kiwi was supported by the good Chinese trade data. China is New Zealand's second biggest export partner.

Chinese trade surplus rose to $18.46 billion in April, from $7.71 billion in March, beating expectations of an increase to $13.1 billion.

The Australian dollar climbed to 3-week highs against the U.S. dollar. The Australian currency was supported by the stronger-than-expected labour market figures and the good Chinese trade data. China is Australia's biggest export partner.

The number of employed people in Australia increased by 14,200 in April. Analysts had forecasted a 7,500 rise. March's figure was revised up to a 21,900 rise from 18,100.

Australia's unemployment rate remained unchanged at 5.8% in April. Analysts had expected an increase to 5.9%.

The Japanese yen traded mixed against the U.S. dollar. No economic data was published in Japan.

The price of oil fell moderately today , as tensions in Ukraine there were signs of weakness , but the crisis in Libya and the jump in Chinese oil imports to a record kept prices .

On the eve of Russian President Vladimir Putin has urged supporters of the federalization of the South-East of Ukraine to postpone the scheduled referendum on May 11 and announced the withdrawal of troops from the border with Ukraine territories.

Meanwhile , the Chinese report showed : in April the total imports of crude oil to China amounted to 27.88 million tons , which corresponds to 6.8 million barrels per day. Daily volume of imports reached a record high , surpassing the previous highest value reached in January , when the country imported about 6.7 million barrels a day . In January, the total volume of crude oil imports in the PRC amounted to 28.16 tons, a record high monthly index.

Meanwhile, according to estimates Wall Street Journal, in April, the volume of oil imports to China increased by 20.8 % to 23.08 million tons of crude oil import figure in April 2013 . At the same time the growth rate since March of this year amounted to approximately 18.5% to 23.52 million tons. According to the published data, the total volume of oil imports to China in April 2014 amounted to 2.54 million tons, and the total volume of their exports amounted to 2.2 million tons.

Higher oil prices also contributed to the statement occupied ports rebels in Libya that they intend to keep until the two largest export terminal closed .

Market participants also continued to assess yesterday's inventory data . According to the U.S. Department of Energy , oil inventories in the country fell last week by 1.78 million barrels, while analysts had expected growth of 1.25 million barrels.

June futures on U.S. light crude oil WTI (Light Sweet Crude Oil) fell to $ 100.06 a barrel on the New York Mercantile Exchange (NYMEX).

June futures price for North Sea Brent crude oil mixture fell $ 0.34 to $ 107.69 a barrel on the London exchange ICE Futures Europe.

Gold prices have stabilized today after yesterday's fall more than 1 percent . Impact on the dynamics of the word head of the European Central Bank Mario Draghi that the ECB may take action at the next meeting to solve the problem of inflation.

However, many analysts doubt that the ECB actually do something next time , as the Central Bank had previously lied to their expectations. However, these words were enough to cause fluctuations in the gold.

"Reading between the lines , it seems that even if Draghi itself ready to ease policy , it constrains the need to reach consensus on this issue ," said Marc Chandler , analyst at BBH. "Several of the creditor countries , led by Germany are worried that the rates are too low for a long time , leading to a drop in inflationary pressures ."

Market participants also continued to monitor the situation in Ukraine, where the lingering concerns over the conflict between government forces and pro-Russian separatists.

"If the conflict in Ukraine will calm down and the U.S. economy remains in good condition , it will be a good signal for stocks and bad for gold, as investors return to riskier markets where growth prospects better than gold," - said Peter Fertig , consultant Quantitative Commodity Research.

Support prices and have the data for China , which showed that China's trade surplus rose to $ 18.45 billion in April from a surplus of $ 7.7 billion in March, compared with forecasts of a surplus of $ 13.1 billion in Chinese exports rose 0 9 % year on year , higher than the expected decline of 1.7% , after falling in March by 6.6 %. Imports increased by 0.8 %, although the projected decline of 2.3% , after falling 11.3% in the previous month . Strong data helped ease fears about the health of the second largest economy in the world .

Meanwhile, we add that , despite yesterday's drop in prices , interest in buying of Chinese dealers on the Shanghai Gold Exchange was relatively weak.

To date, the cost of the June gold futures on COMEX rose to a high of $ 1289.10 .

The European Central Bank (ECB) President Mario Draghi said today at the ECB press conference:

- The ECB could ease monetary policy in June to tackle low inflation, but the ECB wants to review new staff economic projections first (Mario Draghi has not specified what kind of stimulus measures could be added by the ECB. Different stimulus measures are possible like further cut in interest rates, new liquidity support for banks or quantitative easing);

- Food, energy prices, the strong euro and weak domestic demand are pushing down inflation;

- The European economy is “recovering moderately”;

- Labour markets are showing the first signs of improvement;

- The ECB is monitoring very closely the exchange rate of the euro;

- Inflation is expected to remain at the current low level in the coming months;

- Deflation risk has not increased;

- Low inflation rate in the context of strong euro is a cause for concern;

- The strong euro represents a risk to growth;

- The exchange rate is not a policy target.

The currency pair EUR/USD declines and hits the low of Mai 5, 2014. The reason for the weakness of the euro is the speech of the ECB President Mario Draghi. He said that the ECB could ease monetary policy in June to tackle low inflation.

EUR/USD $1.3800, $1.3850, $1.3870, $1.3930, $1.4000

USD/JPY Y101.30, Y101.50, Y101.60, Y101.80, Y101.90, Y102.00, Y102.50,Y103.00

AUD/USD $0.9295

USD/CAD C$1.0800, C$1.0955

U.S. stock futures fell as technology stocks declined and investors speculated on the timing of possible stimulus moves in Europe.

Global markets:

Nikkei 14,163.78 +130.33 +0.93%

Hang Seng 21,837.12 +90.86 +0.42%

Shanghai Composite 2,015.27 +5.19 +0.26%

FTSE 6,818.99 +22.55 +0.33%

CAC 4,473.96 +27.52 +0.62%

DAX 9,556.58 +35.28 +0.37%

Crude oil $100.17 (-0.60%)

Gold $1290.30 (+0.12%)

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

Upgrades:

Downgrades:

Chevron (CVX) downgraded to Hold from Buy at Argus

FedEx (FDX) downgraded to Equal Weight from Overweight at Barclays, target lowered to $140 from $160

Other:

Walt Disney (DIS) target raised to $90 from $85 at Stifel  (80.29)

Exxon Mobil (XOM) target raised to $114 from $104 at Argus

Economic calendar (GMT0):

01:30    Australia                Changing the number of employed  April      21.9     7.5          14.2

01:30    Australia                Unemployment rate                         April      5.8%    5.9%       5.8%

02:20    China                    Trade Balance, bln                            April      7.7       13.1         18.5

05:45    Switzerland            SECO Consumer Climate                 Quarter I    2          3             1

06:00    Germany               Industrial Production s.a. (MoM)       March   +0.6%  +0.2%     -0.5%

06:00    Germany               Industrial Production (YoY)               March   +4.0%                 +3.0%

07:00    United Kingdom     Halifax house price index                  April     -1.1%   +0.8%     -0.2%

07:00    United Kingdom     Halifax house price index 3m Y/Y      April    +8.7%   +9.1%    +8.5%

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

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

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

11:00    United Kingdom     Asset Purchase Facility                                    375         375         375

11:00    United Kingdom     MPC Rate Statement                                                 

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

The U.S. dollar declined against the most major currencies ahead of the publication of initial jobless claims in the U.S. and the ECB press conference later in the day. Analysts expect 328,000 jobless claims.

The euro climbed to 8-week highs against the U.S. dollar. The European Central Bank kept unchanged interest rate at a record low at 0.25%. Market participants were unimpressed by the weaker-than-expected German industrial production. German industrial production declined 0.5% in March, from a 0.6% increase in February. February’s figure was revised up from 0.4%. Analysts had forecasted a 0.2% rise.

The British pound traded mixed against the U.S. dollar after the release of the BoE interest rate decision. The BoE kept unchanged interest rate at 0.50% and the asset purchase plan remained at 375 billion pounds. This decision was expected by market participants.

British house prices published by Halifax declined 0.2% in April. Analysts had forecasted a 0.8% increase.

EUR/USD: the currency pair climbed to $1.3959

GBP/USD: the currency pair traded mixed

USD/JPY: the currency pair traded mixed

The most important news that are expected (GMT0):

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

EUR/USD

Offers  $1.4010, $1.3980/85, $1.3965/75, $1.3950-52

Bids $1.3880/75

GBP/USD

Offers  $1.7080/85, $1.7040/50, $1.7010-20, $1.7000

Bids $1.6945/40, $1.6925/20, $1.6910/00, $1.6885/75

AUD/USD

Offers  $0.9450, $0.9400

Bids  $0.9350, $0.9305/00, $0.9255/50, $0.9220

EUR/JPY

Offers  Y143.00, Y142.80, Y142.50, Y142.20

Bids Y141.50, Y141.35/30, Y141.00

USD/JPY

Offers  Y102.50, Y102.00

Bids Y101.70, Y101.50, Y101.35/30, Y101.20, Y101.00

EUR/GBP

Offers 

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

European stocks increased due to the stronger-than-expected earnings results from companies across Europe. Investors are awaiting the ECB interest rate decision later in the day. Analysts expect interest rates will remain at a record low level at 0.25%. The major problem of the Eurozone is the low inflation. The ECB President Mario Draghi has many times stated that the central bank will take appropriate measures to tackle low inflation. ECB’s goal is a 2% inflation.

Market participants hope for easing tensions in Ukraine. Russian President Vladimir Putin said yesterday 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.

Barclays shares climbed 6.2%. The company will cut 7,000 jobs at the investment bank to reduce its dependence on the unit. Barclays reported it is planning to cut 14,000 jobs worldwide this year, up from the 12,000 cuts announced in February.

Metro AG shares climbed 5.1% after announcing the better-than-expected earnings.

ProSiebenSat.1, German media group, increased 4.8% after the release of a 9.5 percent increase in first-quarter core earnings.

Current figures:

Name                                   Price                                    Change                 Change %

FTSE 100                             6,828.65                             +32.31                     +0.50%

DAX                                      9,566.3                              +45.00                     +0.50%

CAC 40                                 4,472.21                             +25.77                     +0.60%

Asian stock indices climbed due to the stronger-than-expected Chinese trade data. Chinese trade surplus rose to $18.46 billion in April, from $7.71 billion in March, beating expectations of an increase to $13.1 billion.

Indexes on the close:

Nikkei 225                     14,163.78         +130.33     +0.93%

Hang Seng                     21,837.12           +90.86     +0.42%

Shanghai Composite      2,015.27            +5.19       +0.26%

Mitsubishi shares increased 6.6% after the company released better than expected earnings and said it will buy back its stocks.

EUR/USD $1.3800, $1.3850, $1.3870, $1.3930, $1.4000

USD/JPY Y101.30, Y101.50, Y101.60, Y101.80, Y101.90, Y102.00, Y102.50,Y103.00

AUD/USD $0.9295

USD/CAD C$1.0800, C$1.0955

Economic calendar (GMT0):

01:30    Australia                Changing the number of employed  April      21.9     7.5          14.2

01:30    Australia                Unemployment rate                         April      5.8%    5.9%       5.8%

02:20    China                    Trade Balance, bln                            April      7.7       13.1         18.5

05:45    Switzerland            SECO Consumer Climate                 Quarter I    2          3             1

06:00    Germany               Industrial Production s.a. (MoM)       March   +0.6%  +0.2%     -0.5%

06:00    Germany               Industrial Production (YoY)               March   +4.0%                 +3.0%

07:00    United Kingdom     Halifax house price index                  April     -1.1%   +0.8%     -0.2%

07:00    United Kingdom     Halifax house price index 3m Y/Y      April    +8.7%   +9.1%    +8.5%

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

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

The U.S. dollar remained under pressure against the most major currencies after the testimony from Fed Chair Janet Yellen. Ms. Yellen said the Fed will keep interest rates at their historically low levels after the central bank closes out its bond purchasing program. She added that too many Americans remain unemployed and inflation is below the Fed’s 2% target.

The New Zealand dollar traded higher against the U.S. dollar. The kiwi was supported by the good Chinese trade data. China is New Zealand's second biggest export partner.

Chinese trade surplus rose to $18.46 billion in April, from $7.71 billion in March, beating expectations of an increase to $13.1 billion.

The Australian dollar climbed to 3-week highs against the U.S. dollar. The Australian currency was supported by the stronger-than-expected labour market figures and the good Chinese trade data. China is Australia's biggest export partner.

The number of employed people in Australia increased by 14,200 in April. Analysts had forecasted a 7,500 rise. March's figure was revised up to a 21,900 rise from 18,100.

Australia's unemployment rate remained unchanged at 5.8% in April. Analysts had expected an increase to 5.9%.

The Japanese yen traded mixed against the U.S. dollar. No economic data was published in Japan.

EUR/USD: the currency pair climbed to $1.3920

GBP/USD: the currency pair traded mixed

USD/JPY: the currency pair traded mixed

AUD/USD: the currency pair increased to $0.9374

The most important news that are expected (GMT0):

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

The European Central Bank will release the interest rate decision later in the day. Analysts expect interest rates will remain at a record low level at 0.25%. The major problem of the Eurozone is the low inflation. The ECB President Mario Draghi has many times stated that the central bank will take appropriate measures to tackle low inflation. ECB’s goal is a 2% inflation.

The Organization for Economic Cooperation and Development and International Monetary Fund Managing Director Christine Lagarde put under pressure the ECB to act as soon as possible.

On the one hand, the inflation in the Eurozone in April was better than in the previous month. The harmonised consumer price index climbed 0.7% in April (March: 0.5%). Analysts expected a rise of 0.8%. It is less than half of 2% target, but the likelihood of the ECB further stimulus measures should be decreased.

On the other hand, there is the high exchange rate of euro. The strong euro affects earnings of the export companies in the Eurozone. A stronger euro makes Eurozone’s goods less competitive abroad.

French Prime Minister Manuel Valls said over weekend the euro was too strong and "more appropriate" monetary policy was needed to weaken the euro. German Chancellor Angela Merkel's spokesman Steffen Seibert answered indirectly that the level of the euro is an issue for the European Central Bank and not an issue for politicians. Different opinions complicate the decision-making.

Eurozone’s economy is improving. Purchasing managers’ indexes for Spain and Italy and euro-area retail sales data beat economists’ forecasts. Spanish 10-year debt yields decreased to a record 2.92%. Portugal announced it is ready to exit its three-year bailout programme. All this leads to increasing demand for the euro.

The Bank of England (BoE) will release the interest rate decision later in the day. Analysts forecasted the BoE should keep unchanged interest rates at 0.50%. The BoE asset purchase plan should remain at 375 billion pounds.

Last year, the BoE announced that the interest rate remain unchanged until unemployment decline to at least 7.0%. The unemployment rate plunged to 6.9% in March.

The UK economy is continuing to grow, but the growth was weaker than expected. The GDP was up 0.8% in the first quarter. The annual rate of growth increased to 3.1%. It is fastest rate of annual growth since the fourth quarter of 2007. The projected quarterly rate was 0.9% and an annual growth of 3.2%.

The U.K. services PMI climbed to a four-month high of 58.7 in April from 57.6 in March. Analysts had expected an increase to 57.9.

There is a problem of rising house prices in the U.K. The Organisation for Economic Co-operation and Development said the central bank should intervene to address risks of excessive house price inflation. The Bank of England already warned that the recent house price increase could end in a crash. There are different possibilities to handle this problem: to raise interest rates or to toughen lending rules.

Good economic data and increasing house prices speak for the interest rate hike, but it is unlikely that it will be done this time.

EUR / USD

Resistance levels (open interest**, contracts)

$1.3973 (2714)

$1.3948 (4695)

$1.3933 (2116)

Price at time of writing this review: $ 1.3914

Support levels (open interest**, contracts):

$1.3892 (337)

$1.3867 (1150)

$1.3832 (1646)

Comments:

- Overall open interest on the CALL options with the expiration date May, 9 is 29102  contracts, with the maximum number of contracts with strike price $1,3900 (4695);

- Overall open interest on the PUT optionswith the expiration date May, 9 is 37195 contracts, with the maximum number of contractswith strike price $1,3600 (4074);

- The ratio of PUT/CALL was 1.28 versus 1.26 from the previous trading day according to data from May, 7

GBP/USD

Resistance levels (open interest**, contracts)

$1.7200 (1066)

$1.7100 (1324)

$1.7001 (4361)

Price at time of writing this review: $1.6956

Support levels (open interest**, contracts):

$1.6899 (730)

$1.6800 (1294)

$1.6700 (1028)

Comments:

- Overall open interest on the CALL options with the expiration date May, 9 is 22769 contracts, with the maximum number of contracts with strike price $1,7000 (4361);

- Overall open interest on the PUT optionswith the expiration date May, 9 is 22317 contracts, with the maximum number of contracts with strike price $1,6200 (1869);

- The ratio of PUT/CALL was 0.98 versus 0.97 from the previous trading day according to data from May, 7

* - 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.