CFD Markets News and Forecasts — 09-05-2014

European stocks traded lower due to the weak earnings results from companies across Europe and in the absence of any major economic reports in Europe.

But tensions in Ukraine also continued to put under pressure stock markets. Pro-Russia separatists in eastern Ukraine ignored a public call by Russian President Vladimir Putin to postpone a referendum.

Telefonica shares declined 2.7%. The company released a 23% decrease in first quarter net profits.

Petrofac, energy services group, shares dropped 15.0% after lowering its net income outlook for 2014.

Indexes on the close:

Name                                   Price                                    Change                 Change %

FTSE 100                             6,814.57                             -24.68                     -0.36%

DAX                                      9,581.45                             -25.95                     -0.27%

CAC 40                                 4,477.28                             -29.96                     -0.66%

The U.S. dollar traded higher against the most major currencies. The U.S. currency was supported by concerns over tensions in Ukraine and the increasing demand for the safe-haven U.S. currency. Pro-Russia separatists in eastern Ukraine ignored a public call by Russian President Vladimir Putin to postpone a referendum.

The U.S. wholesale inventories increased 1.1% in March, from a 0.5% gain in February. Analysts had forecasted that the U.S. wholesale inventories would remain unchanged.

JOLTs job openings in the U.S. decreased 111,000 in March to 4,014,000 after increasing 251,000 to 4,125,000 in February.

The euro plunged to 1-month lows against the U.S. dollar. The euro weakened due to the yesterday’s ECB President Mario Draghi comments that the ECB could ease monetary policy in June to tackle low inflation.

German trade surplus trade decreased to €14.8 billion in March, from €15.8 billion in February. February’s figure was revised up from a surplus of €15.7 billion. Analysts had expected a rise to €16.6 billion.

The British pound dropped against the U.S. dollar after the release of the good economic data and as investors locked in profits after a strong rally. The U.K. manufacturing production climbed 0.5% in March (February: +1.0%). Analysts had expected a 0.3% rise. The U.K trade deficit declined to £8.48 billion in March, from £8.75 billion in February. February’s figure was revised down from £9.09 billion. Analysts had forecasted an increase of the deficit to £9.00 billion. The strong economic data strengthens the speculation that the Bank of England will hike interest rates in the first half of the next year.

NIESR increased the GDP forecast for U.K. to 1.0%, from a 0.9% rise in the previous month. The research organisation said it expected GDP to reach its first quarter 2008 level within a short time.

The Canadian dollar dropped against the U.S. dollar due to weak labour data from Canada. The unemployment rate remained unchanged by 6.9% in April. The number of employed people decreased by 28,900 in April, from a 42,900 rise in March. Analysts had expected a 12,800 increase.

The New Zealand dollar traded lower against the U.S. dollar due to the weak Chinese inflation and the increasing demand for the safe-haven U.S. currency. China's consumer price index (CPI) increased 1.8% year-on-year in April, the lowest inflation rate in 18 months. Analysts had expected a 2.1% gain. China’s producer price index (PPI) declined 2.0% year-on-year in April. Analysts had forecasted a decline of 1.8%. No economic data was published in New Zealand.

The Australian dollar traded mixed against the U.S. dollar. The Reserve Bank of Australia said in its statement that the current accommodative monetary policy is appropriate for some time. The RBA increased its growth forecast for the current quarter from 2.75% to 3%, and lowered its inflation outlook to a 2.75% increase year-on-year, from 3.00% in its February statement.

The Japanese yen traded little changed against the U.S. dollar. Japan's leading economic index declined to 106.5 in March, from 108.7 in February. February's figure was revised down from 113.5.

Japan's coincident index was up to 114.0 in March, from 112.9 in February. February's figure was revised down from 113.0.

The cost of WTI crude oil rose moderately , while Brent prices fell slightly . Such dynamics is associated with an increase in tension in Ukraine and limited supply from Libya, where recent negotiations on the resumption of oil export terminals have not yielded the desired result.

Analysts suggest that this time caused by the decision of investors' concerns of activists in eastern Ukraine , despite the appeal of Russian President Vladimir Putin to postpone the vote until a later date , to hold a referendum next weekend. Against this background, traders worried about a possible suspension of oil supplies and the introduction of new sanctions against Russia .

Meanwhile, rebels in Libya refused to recognize the country's parliament elected a new prime minister, which can aggravate the course of their negotiations with the government . In the last month they handed over to the authorities captured two of the four terminals to ship their oil, but under their control are still two key with a total capacity of about 800,000 barrels per day. Production in Libya is now about 230,000 in production capacity of 1.5 million

Oil investors are also watching the outcome of talks between Iran and world powers in respect of the disputed nuclear program .

June futures on U.S. light crude oil WTI (Light Sweet Crude Oil) rose to $ 100.76 per barrel on the New York Mercantile Exchange (NYMEX).

June futures price for North Sea Brent crude oil mixture fell $ 0.04 to $ 108.00 a barrel on the London exchange ICE Futures Europe.

Gold prices have not changed today, but are on their way to a second consecutive weekly drop . Experts note that due to fears of ongoing tensions in Ukraine and the risk of civil war, supported the demand for the precious metal , although the rise of a strong dollar limits .

Today, the dollar continued to rise against the single currency after yesterday gave the largest one-day rise since mid-March as investors do not stop to analyze yesterday's statement of ECB Draghi regarding additional monetary stimulus .

We also add that the demand for shelter rose after pro-Russian separatists in eastern Ukraine ignored the public appeal of Russian President Vladimir Putin to postpone the referendum on self-government. They said they plan to hold a vote on Sunday that as many fear could lead to civil war . Senior EU diplomats reached a preliminary agreement Wednesday to expand the legal criteria for imposing sanctions on Russia in order to facilitate the task of freezing assets of the companies involved in the Ukrainian crisis.

Since the beginning of the week , gold prices fell slightly more than half a percent against the backdrop of differences between Russia and the West in regard to Ukraine , and statements of the Federal Reserve System Janet Yellen on monetary policy.

Premiums for gold in India ( world's second largest consumer of gold ) decreased this week , as many traders are waiting for changes of import restrictions . Dealers in other parts of Asia also said demand was much lower than last year.

To date, the cost of the June gold futures on COMEX rose to a high of $ 1289.20 .

EUR/USD $1.3780, $1.3790, $1.3800, $1.3810-20, $1.3825, $1.3835, $1.3845, $1.3870-80, $1.3900, $1.3950

USD/JPY Y101.00, Y101.50, Y102.40, Y102.75, Y103.00

AUD/USD $0.9250, $0.9275, $0.9300, $0.9350-60

USD/CAD C$1.0860, C$1.0895, C$1.0900, C$1.0920, C$1.0950

U.S. stock futures were little changed as investors assessed earnings from some companies.

Global markets:

Nikkei 14,199.59 +35.81 +0.25%

Hang Seng 21,862.99 +25.87 +0.12%

Shanghai Composite 2,011.13 -4.14 -0.21%

FTSE 6,823.15 -16.10 -0.24%

CAC 4,485.75 -21.49 -0.48%

DAX 9,597.37 -10.03 -0.10%

Crude oil $100.61 (+0.35%)

Gold $1292.20 (+0.35%)

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

Upgrades:

Twitter (TWTR) upgraded to Neutral from Underperform at BofA/Merrill

Downgrades:

Apple (AAPL) downgraded to Buy from Strong Buy at ISI Group, target raised to $675 from $600

Other:

The Canadian dollar dropped against the U.S. dollar due to weak labour data from Canada. The unemployment rate remained unchanged by 6.9% in April. The number of employed people decreased by 28,900 in April, from a 42,900 rise in March. Analysts had expected a 12,800 increase.

Economic calendar (GMT0):

01:30    Australia              RBA Monetary Policy Statement                                                         

01:30    China                  PPI y/y                                         April     -2.3%    -1.8%     -2.0%

01:30    China                  CPI y/y                                         April     +2.4%   +2.1%   +1.8%

05:00    Japan                  Leading Economic Index              March   108.7                   106.5

05:00    Japan                  Coincident Index                          March   112.9                   114.0

06:00    Germany              Current Account                         March   13.9                      19.5

06:00    Germany              Trade Balance                              March   15.8        16.9      14.8

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

08:30    United Kingdom    Industrial Production (YoY)          March   +2.7%                 +2.3%

08:30    United Kingdom    Manufacturing Production (MoM) March   +1.0%   +0.3%   +0.5%

08:30    United Kingdom    Manufacturing Production (YoY)  March   +3.8%                +3.3%

08:30    United Kingdom    Trade in goods                            March    -9.7        -9.0        -8.5

The U.S. dollar traded higher against the most major currencies. The U.S. currency was supported by the better-than-expected number of initial jobless claims, published on Thursday, and concerns over tensions in Ukraine. Pro-Russia separatists in eastern Ukraine ignored a public call by Russian President Vladimir Putin to postpone a referendum. Investors favour the safe-haven currency.

The euro plunged to 1-week lows against the U.S. dollar. The euro weakened due to the yesterday’s ECB President Mario Draghi comments that the ECB could ease monetary policy in June to tackle low inflation.

German trade surplus trade decreased to €14.8 billion in March, from €15.8 billion in February. February’s figure was revised up from a surplus of €15.7 billion. Analysts had expected a rise to €16.6 billion.

The British pound dropped against the U.S. dollar after the release of the good economic data and as investors locked in profits after a strong rally. The U.K. manufacturing production climbed 0.5% in March (February: +1.0%). Analysts had expected a 0.3% rise. The U.K trade deficit declined to £8.48 billion in March, from £8.75 billion in February. February’s figure was revised down from £9.09 billion. Analysts had forecasted an increase of the deficit to £9.00 billion. The strong economic data strengthens the speculation that the Bank of England will hike interest rates in the first half of the next year.

EUR/USD: the currency pair declined to $1.3773

GBP/USD: the currency pair fell to $1.6846

USD/JPY: the currency pair traded mixed

The most important news that are expected (GMT0):

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.                      JOLTs Job Openings      April      4173     4210    

22:00    U.S.                      FOMC Member Narayana Kocherlakota

EUR/USD

Offers $1.3995/000, $1.3950/60, $1.3930/35, $1.3890-900, $1.3870/75, $1.3860, $1.3825/30

Bids $1.3800/790, $1.3775, $1.3705/00

GBP/USD

Offers  $1.7010-20, $1.7000, $1.6950

Bids $1.6900, $1.6885/75, $1.6850

AUD/USD

Offers  $0.9450, $0.9400, $0.9375/80

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

EUR/JPY

Offers Y141.50, Y141.00

Bids Y140.25/20, Y140.00, Y139.50,  Y139.00

USD/JPY

Offers Y102.50, Y102.00

Bids Y101.35/30, Y101.20, Y101.00

EUR/GBP

Offers  stg0.8220-30, stg0.8190/200

Bids stg0.8150, stg0.8120, stg0.8100

European stocks plunged due to the weak earnings results from companies across Europe.

But tensions in Ukraine also continued to put under pressure stock markets. Pro-Russia separatists in eastern Ukraine ignored a public call by Russian President Vladimir Putin to postpone a referendum.

Telefonica shares declined 2.9%. The company released a 23% decrease in first quarter net profits.

Petrofac, energy services group, shares dropped 15.8% after lowering its net income outlook for 2014.

Current figures:

Name                                   Price                                    Change                 Change %

FTSE 100                             6,817.13                             -22.12                     -0.32%

DAX                                      9,577.93                             -29.47                     -0.31%

CAC 40                                 4,483.18                             -24.06                     -0.53%

The U.S. dollar hits the low of May 02, 2014 against the euro. Market participants have concerns over tensions in Ukraine. Pro-Russia separatists in eastern Ukraine ignored a public call by Russian President Vladimir Putin to postpone a referendum. Investors favor the safe-haven currency. 

Asian stock indices were exhibiting a mixed trend. The weak Chinese economic data put under pressure stock markets. China's consumer price index (CPI) increased 1.8% year-on-year in April, the lowest inflation rate in 18 months. Analysts had expected a 2.1% gain. China’s producer price index (PPI) declined 2.0% year-on-year in April. Analysts had forecasted a decline of 1.8%.

Indexes on the close:

Nikkei 225                     14,199.59         +35.81       +0.25%

Hang Seng                     21,862.99          +25.87      +0.12%

Shanghai Composite      2,011.13            -4.14       -0.21%

EUR/USD $1.3780, $1.3790, $1.3800, $1.3810-20, $1.3825, $1.3835, $1.3845, $1.3870-80, $1.3900, $1.3950

USD/JPY Y101.00, Y101.50, Y102.40, Y102.75, Y103.00

AUD/USD $0.9250, $0.9275, $0.9300, $0.9350-60

USD/CAD C$1.0860, C$1.0895, C$1.0900, C$1.0920, C$1.0950

The Reserve Bank of Australia released its quarterly monetary policy statement:

- The current accommodative monetary policy is appropriate for some time;

- The RBA increased its growth forecast for the current quarter from 2.75% to 3%, and;

- The RBA lowered its near-term inflation outlook to a 2.75% increase year-on-year, from 3.00% in its February statement.

Economic calendar (GMT0):

01:30    Australia              RBA Monetary Policy Statement                                                          

01:30    China                  PPI y/y                                         April     -2.3%    -1.8%     -2.0%

01:30    China                  CPI y/y                                         April     +2.4%   +2.1%   +1.8%

05:00    Japan                  Leading Economic Index              March   108.7                   106.5

05:00    Japan                  Coincident Index                          March   112.9                   114.0

06:00    Germany              Current Account                         March   13.9                      19.5

06:00    Germany              Trade Balance                              March   15.8        16.9      14.8

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

08:30    United Kingdom    Industrial Production (YoY)          March   +2.7%                 +2.3%

08:30    United Kingdom    Manufacturing Production (MoM) March   +1.0%   +0.3%   +0.5%

08:30    United Kingdom    Manufacturing Production (YoY)  March   +3.8%                +3.3%

08:30    United Kingdom    Trade in goods                            March    -9.7        -9.0        -8.5

The U.S. dollar traded higher against the most major currencies. The U.S. currency was supported by the yesterday’s ECB President Mario Draghi comments that the ECB could ease monetary policy in June to tackle low inflation, and the better-than-expected number of initial jobless claims, published on Thursday.

The New Zealand dollar traded lower against the U.S. dollar due to the weak Chinese inflation, but later recovered its losses. China's consumer price index (CPI) increased 1.8% year-on-year in April, the lowest inflation rate in 18 months. Analysts had expected a 2.1% gain. China’s producer price index (PPI) declined 2.0% year-on-year in April. Analysts had forecasted a decline of 1.8%. No economic data was published in New Zealand.

The Australian dollar declined against the U.S. dollar due to the Reserve Bank of Australia (RBA) monetary policy statement and the weak Chinese inflation, but later recovered its losses. The RBA said in its statement that the current accommodative monetary policy is appropriate for some time.

The RBA increased its growth forecast for the current quarter from 2.75% to 3%, and lowered its inflation outlook to a 2.75% increase year-on-year, from 3.00% in its February statement. 

The Japanese yen traded little changed against the U.S. dollar. Japan's leading economic index declined to 106.5 in March, from 108.7 in February. February's figure was revised down from 113.5.

Japan's coincident index was up to 114.0 in March, from 112.9 in February. February's figure was revised down from 113.0.

EUR/USD: the currency pair traded mixed

GBP/USD: the currency pair declined to $1.6915

USD/JPY: the currency pair climbed to Y101.75

The most important news that are expected (GMT0):

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.                      JOLTs Job Openings      April      4173     4210     

22:00    U.S.                      FOMC Member Narayana Kocherlakota

EUR / USD

Resistance levels (open interest**, contracts)

$1.3951 (2620)

$1.3900 (5052)

$1.3872 (2203)

Price at time of writing this review: $ 1.3839

Support levels (open interest**, contracts):

$1.3830 (337)

$1.3793 (4191)

$1.3747 (2265)

Comments:

- Overall open interest on the CALL options with the expiration date May, 9 is 29592 contracts, with the maximum number of contracts with strike price $1,3900 (5052);

- Overall open interest on the PUT optionswith the expiration date May, 9 is 37901 contracts, with the maximum number of contractswith strike price $1,3800 (4191);

- The ratio of PUT/CALL was 1.28 versus 1.28 from the previous trading day according to data from May, 8

GBP/USD

Resistance levels (open interest**, contracts)

$1.7200 (1066)

$1.7100 (1283)

$1.7000 (4232)

Price at time of writing this review: $1.6924

Support levels (open interest**, contracts):

$1.6899 (1142)

$1.6800 (1361)

$1.6700 (1028)

Comments:

- Overall open interest on the CALL options with the expiration date May, 9 is 22459 contracts, with the maximum number of contracts with strike price $1,7000 (4232);

- Overall open interest on the PUT optionswith the expiration date May, 9 is 22779 contracts, with the maximum number of contracts with strike price $1,6200 (1869);

- The ratio of PUT/CALL was 1.01 versus 0.98 from the previous trading day according to data from May, 8

* - 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.