CFD Markets News and Forecasts — 17-06-2016

Oil prices rose on Friday for the first time in a week as the dollar fell and investors in global markets cautiously bought some riskier assets as anxiety eased about Britain's possible exit from the European Union.

Crude futures were still on track for a weekly loss after daily declines Monday through Thursday.

Brent crude futures' front-month contract were up $1.28, or 2.7 percent, at $48.47 a barrel .

The front-month in U.S. crude's West Texas Intermediate (WTI) futures rose $1.18, or 2.5 percent, to $47.39.

For the week, Brent was down 4 percent and WTI about 3 percent.

Investors will be on the lookout for a weekly reading on the U.S. oil rig count due from oil services firm Baker Hughes at 1700 GMT.

Last week, the rig count rose for a second week in a row, the first time since August, as oil drilling activity increased with crude trading over $50 a barrel.

On Thursday, Brent and WTI lost about 4 percent each as investors fretted that the global economy could be thrown into turmoil if the UK votes next week to ditch its EU membership.

On Friday, Britain mourned the death of UK member of parliament Jo Cox, a day after the vocal advocate for Britain remaining in the union was murdered. Her death threw next week's referendum on EU membership into limbo.

The dollar fell about a quarter percent, retreating from its 2-week high on Thursday that had weighed on demand for greenback-denominated oil from the holders of the euro and other currencies.

Some analysts cautioned that with UK's future EU still unknown until a vote next Thursday, oil could come under pressure again.

"It's mainly Brexit at the moment, at least until next Thursday, before people start to look at the more fundamental oil/commodity drivers again," ABN Amro's senior energy economist Hans van Cleef said.

Julian Jessop, chief economist and head of commodities research at Capital Economics, told Reuters Global Oil Forum that a Brexit situation could lead to a sharp oil selloff sending Brent to as low as $40.

In industry news, global oil majors Chevron and Royal Dutch Shell were putting up small refineries for auction as they looked to trim lower-margin assets amid rising crude prices.

Major U.S. stock-indexes fell as Apple dragged down on Friday even as investors remained wary of global economic growth worries and an impending referendum on Britain's European Union membership. Britain will vote on June 23, an event that has weaved in uncertainty across the globe, battering stocks and bond yields for the past week and spiking demand for safe-haven assets such as gold and the yen.

Most all of Dow stocks in negative area (23 of 30). Top looser - Merck & Co. Inc. (MRK, -2,80%). Top looser - Caterpillar Inc. (CAT, +0,96%).

Most of all S&P sectors in negative area. Top looser - Healthcare (-1,1%). Top gainer - Conglomerates (+1,2%).

At the moment:

Dow 17532.00 -111.00 -0.63%

S&P 500 2056.00 -14.50 -0.70%

Nasdaq 100 4357.25 -59.50 -1.35%

Oil 48.00 +1.26 +2.70%

Gold 1290.00 -8.40 -0.65%

U.S. 10yr 1.61 +0.05

Gold prices rose, as a softer dollar encouraged demand for the precious metal.

Gold rallied to its highest level since August 2014 at $1,315.61 an ounce on Thursday, as the U.S. Federal Reserve held interest rates and rising expectations that the U.K. could exit the European Union bolstered demand ahead of the referendum on June 23.

Gains tapered off, however, after the referendum campaign was paused later on Thursday following the killing of 41-year-old Labour Party lawmaker and Remain campaigner, Jo Cox, in northern England.

"Gold experienced an aggressive selloff during trading on Thursday with prices cutting below $1,285 following the suspension of the Brexit campaign which offered a foundation for bearish investors to pounce," said Lukman Otunuga, a research analyst at FXTM brokerage.

"It seems that gold prices have been dictated by Brexit expectations and with the suspension of the Brexit campaign bolstering speculation of a 'Bremain' victory, gold prices plummeted," he said.

The greenback softened Friday, which made dollar-denominated gold cheaper to buy for those holding other currencies. The Dollar Index, which tracks the dollar against a basket of 16 currencies, was recently down 0.23% at 86.22.

Looking ahead, prices may dip slightly as safe-haven demand stalls.

"A $108 rally in gold prices over 10 days may mean a lot of safe-haven buying has already happened and with the likely outcome of the Brexit vote far from clear, longs may well be tempted to take profits," said William Adams, head of research at Fastmarkets.

Today's session on the Warsaw Stock Exchange takes place in a dreamy atmosphere. The turnover on companies from the WIG20 index did not exceed PLN 300 mln, therefore increases are not reliable.

In a moment the clear picture of the session will be replaced by a radical increase in volatility and that will completely disrupt the image of today's trading. The summary of the week is a drop in the WIG20 by about 2 percent and deepening the wave of sell-off, which lasts from April. More importantly, the levels of weeks closing is just close to the new minimum of downward wave. The lowest closing of the year was 1,727 points. But even without this element, the weekly chart invites us to look into the area of the January minimum. The new week with a referendum in the UK and elections in Spain may also be difficult, or - the remaining Great Britain in the EU - will bring a strong rebound of the third month repricing.

EURUSD 1.1000 (EUR 261m) 1.1200 (384m) 1.1250 (485m) 1.1300 (1.19bln)1.1361(220m)

USDJPY 105.00 (USD 605m) 105.90-1060 (390m) 106.25 (USD 400m) 106.90-107.00 107.00 (880m)

GBPUSD 1.4000 (GBP 711m) 1.4100 (290m)

EURGBP 0.7875-80 (230m)

AUDUSD 0.7100 (AUD 320m) 0.7250 (301m) 0.7400 (266m) 0.7450 (390m)

NZDUSD 0.7035 (NZD 271m) 0.7100 (399m)

USDCAD 1.2500 (USD 620m) 1.2630 (295m) 1.2950 (400m) 1.3000 (575m) 1.3010-15 (431m) 1.3050 (210m) 1.3150 (262m)

U.S. stock-index futures fluctuated.

Global Stocks:

Nikkei 15,599.66 +165.52 +1.07%

Hang Seng 20,169.98 +131.56 +0.66%

Shanghai Composite 2,885.04 +12.22 +0.43%

FTSE 6,019.2 +68.72 +1.15%

CAC 4,193.18 +40.17 +0.97%

DAX 9,633.16 +82.69 +0.87%

Crude $47.24 (+2.23%)

Gold $1292.50 (-0.45%)

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

Upgrades:

Downgrades:

Other:

Apple (AAPL) target lowered to $115 at RBC Capital Mkts

EUR/USD

Offers 1.1270-75 1.1300 1.1320 1.1355-60 1.1400 1.1420 1.1450 1.1480 1.1500

Bids 1.1220-25 1.1200 1.1185 1.1170 1.1150 1.1135 1.1100

GBP/USD

Offers 1.4300 1.4325-30 1.4350-55 1.4380 1.4400 1.4420 1.4450

Bids 1.4240 1.4220 1.4200 1.4185 1.4150 1.4120 1.4100 1.4085 1.4065 1.4050 1.4030 1.4000

EUR/GBP

Offers 0.7900-10 0.7930 0.7950 0.7980-85 0.8000 0.8020-25 0.8050

Bids 0.7870-75 0.7850 0.7825-30 0.7800 0.7780-85 0.7750

EUR/JPY

Offers 117.50 117.80 118.00 118.50 118.80 119.00 119.55-60 119.85 120.00

Bids 117.00 116.80 116.50 116.00 115.50 115.35 115.00

USD/JPY

Offers 104.50-55 104.75-80 105.00 105.30-35 105.50 105.80 106.00 106.50 106.85107.00

Bids 104.00 103.80-85 103.50 103.25 103.00 102.75-80 102.50 102.00

AUD/USD

Offers 0.7400-05 0.7420-25 0.7450 0.7485 0.7500 0.7520 0.7550

Bids 0.7370 0.7350 0.7320-25 0.7300 0.7285 0.7270 0.7250

The first part of the session did not bring any solstice and the WIG20 returned to the area of 1750 points. There is also no signals of overcome the resistance created there, and barely PLN 175 mln of turnover is the weak result and signaling distance of investors to rebound. The Warsaw market copies behavior of the German DAX, which at 13:00 is gaining about 1 percent, while the WIG20 index rising 0.9 percent. If in the first half we failed to earn anything important, that any market movement in the second half will be condemned to confrontation with final hour of contracts settlement. Thus, it appears that for technically reliable trade we will have to wait.

Germany's Ifo institute upgraded its growth forecasts for Germany on Thursday. Germany's economy is expected to expand 1.8% in 2016, up from the previous estimate of 1.6%, and 1.6% in 2017, up from the previous estimate of 1.5%. The upward revision was driven by a strong labour market and higher state spending on refugees.

Finland's Finance Minister Alexander Stubb said on Thursday that Britain's exit from the European Union (EU) would have the same effect for Europe like the bankruptcy of Lehman Brothers in the U.S.

"We're in the midst of one of the most historic weeks in the history of European integration," he added.

Japan's Finance Minister Taro Aso said on Friday that he was concerned about "one-sided, rapid and speculative" moves of the yen. He pointed out that the government was ready to act to prevent these moves if needed.

According to data from the Bloomberg Consumer Comfort Index, consumers' expectations for U.S. economy decreased to 42.1 in in the week ended June 12 from 43.5 the prior week.

The decrease was driven by drops in all sub-indexes. The measure of views of the economy was down to 32.7 from 32.9, the buying climate index slid to 38.0 from 40.3, while the personal finances index dropped to 55.8 from 57.4.

EUR/USD 1.1000 (EUR 261m) 1.1200 (384m) 1.1250 (485m) 1.1300 (1.19bln) 1.1361(220m)

USD/JPY 105.00 (USD 605m) 105.90-1060 (390m) 106.25 (USD 400m) 106.90-107.00 107.00 (880m)

GBP/USD 1.4000 (GBP 711m) 1.4100 (290m)

EUR/GBP 0.7875-80 (230m)

AUD/USD 0.7100 (AUD 320m) 0.7250 (301m) 0.7400 (266m) 0.7450 (390m)

NZD/USD 0.7035 (NZD 271m) 0.7100 (399m)

USD/CAD 1.2500 (USD 620m) 1.2630 (295m) 1.2950 (400m) 1.3000 (575m) 1.3010-15 (431m) 1.3050 (210m) 1.3150 (262m)

The WIG20 futures began the day from rebound about 6 points above yesterday's close. After a very weak Thursday's session in Warsaw the Americans introduced an element of calming, which after an initial decline managed to finish the day in positive territory moving away the specter of testing an important support.

WIG20 index opened at 1739.54 points (+0.35%)*

WIG 44242.42 0.53%

WIG30 1943.86 0.73%

mWIG40 3375.22 0.18%

*/ - change to previous close

The growth in the European markets allows to open the quotation of the WIG20 with rise. But the graph of the WIG20 constantly stays below supports, so the signal of looking into the region of 1,650 pts., remains valid. To complete the theme of the British referendum is still plenty of time, so the problem will come back. It's hard to say whether our reflection proves to be forward-looking. Certainly not subsided yet the risks, which in previous days negatively affected the mood. Investors who would like to catch a hole should wait to back above 1,750 points.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1414 (2071)

$1.1379 (724)

$1.1342 (71)

Price at time of writing this review: $1.1250

Support levels (open interest**, contracts):

$1.1208 (2353)

$1.1166 (1671)

$1.1112 (2130)

Comments:

- Overall open interest on the CALL options with the expiration date July, 8 is 34548 contracts, with the maximum number of contracts with strike price $1,1500 (4151);

- Overall open interest on the PUT options with the expiration date July, 8 is 83677 contracts, with the maximum number of contracts with strike price $1,0900 (16365);

- The ratio of PUT/CALL was 2.42 versus 2.11 from the previous trading day according to data from June, 16

GBP/USD

Resistance levels (open interest**, contracts)

$1.4530 (1662)

$1.4435 (537)

$1.4341 (218)

Price at time of writing this review: $1.4231

Support levels (open interest**, contracts):

$1.4156 (1377)

$1.4060 (3289)

$1.3963 (1100)

Comments:

- Overall open interest on the CALL options with the expiration date July, 8 is 20626 contracts, with the maximum number of contracts with strike price $1,5000 (3431);

- Overall open interest on the PUT options with the expiration date July, 8 is 39216 contracts, with the maximum number of contracts with strike price $1,4100 (3289);

- The ratio of PUT/CALL was 1.90 versus 1.99 from the previous trading day according to data from June, 16

* - 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.

The yen held near multi-year highs against the dollar and euro early on Friday, having surged after the Bank of Japan refrained from adding fresh stimulus, while sterling recovered ground as the killing of a pro-European Union lawmaker was expected to boost sentiment for the "Remain" camp in Britain's EU referendum.

Because of its safe-haven status, the yen has benefited from uncertainty over the outcome of next Thursday's referendum in Britain on whether to remain in the EU or leave, with both the U.K. and EU economies seen suffering if Britain quits.

"Продолжающееся бездействие со стороны Банка Японии перед лицом этих рисков только усиливает подозрения на рынке, что центральный банк работает из вариантов политики, подавая обратно в более сильной иены", сказал экономист HSBC Izumi Devalier в примечании.

Министр финансов Японии Таро Асо заявил в пятницу, что он был глубоко обеспокоен "односторонними, быстрых и спекулятивных движений" видели на валютном рынке и будет реагировать, если это необходимо для обеспечения стабильности в валютах.

The euro hovered just above 117.32 yen, after skidding to a three-year trough of 115.51.

Campaigning in Britain was suspended after the parliamentarian, a vocal advocate for staying in the EU, was shot dead in the street.

"Market participants appear to have interpreted the killing as a blow to support for the leave camp," analysts at Commonwealth Bank wrote in a note to clients.

Sterling bounced back above $1.4200, turning around from a slide to a two-month low of $1.4013.

"$1.4 is an important level in a historical perspective. It is very rare for the pound to stay below that level. It may not be easily broken," said a trader at U.S. bank in Tokyo.

Preparing for a market storm, many of the world's biggest banks plan to draft senior traders to work through the night following the referendum, and policymakers in several countries are on guard against volatility.

EUR / USD: during the Asian session, the pair was trading in the $ 1.1230-75

GBP / USD: during the Asian session, the pair is trading in the range of $ 1.4195-1.4290

USD / JPY: during the Asian session, the pair was trading in range Y104.10-85

Yesterday's session on Wall Street ended with increases in the major indexes. In the case of the S&P500 growth was 0.3 percent. In the comments there is information that the growth in the US is a response to speculation about a possible postponement of the referendum in the UK, after the assassination of one of the parliamentarians, but much simpler explanation is the thesis that the share prices on Wall Street fell for five days, and it's time for correction.

The positive climate - reinforced on the currency market by the dollar weakening against the euro - moved to Asia, where the Nikkei gaining 1.2 percent supported by the weakening of the yen. Chinese markets are on green side, so we may talk about a return of appetite for risk, but rather a reduction in risk aversion. In this context, we can expect growth in Europe. However, the factors that spurred last supply have not disappeared. Markets nervous waiting for the new week in which the United Kingdom will decide on his future in the European Union and Spain on the composition of the new parliament.

From the point of view of the Warsaw market, sentiment improvement in the environment will help to recover from yesterday's sell-off. Stronger European markets and stronger zloty should help the bulls at the opening, but during the day there will be new surveys from the UK on Brexit, which may limit the scale of optimism. We must also remember that today expire June's derivatives series and waiting for the hour of contracts settlement will be another element that will not allow the bulls to get involved in the market with full conviction.