CFD Markets News and Forecasts — 17-11-2014

Stock indices closed higher after the European Central Bank (ECB) President Draghi said the purchase of government bonds is possible. The ECB president was testifying to the European Union's Parliament on Monday. He reiterated that the ECB is willing to add further stimulus measures if needed. But Draghi pointed out that the ECB could purchase government bonds.

The ECB president noted that governments need to implement structural reforms.

Bundesbank said in its monthly report that Germany's economic growth was likely to remain weak in the next few months.

Eurozone's trade surplus widened to €17.7 billion in September from €15.4 billion in August, exceeding expectations for a rise to €16.2 billion. August's figure was revised down from a surplus of €15.8 billion.

Indexes on the close:

Name Price Change Change %

FTSE 100 6,671.97 +17.60 +0.26%

DAX 9,306.35 +53.41 +0.58%

CAC 40 4,226.1 +23.64 +0.56%

The U.S. dollar mixed against the most major currencies after the weaker-than-expected U.S. industrial production and NY Fed Empire State manufacturing index. The U.S. industrial production declined 0.1% in October, missing expectations for a 0.2% rise, after a 0.8% gain in September. September's figure was revised down from a 1.0% increase.

The Fed said that the decrease was driven by a fall in output of consumer goods and materials.

Capacity utilisation rate fell to 78.9% in October from 79.2% in September. September's figure was revised down from 79.3%. Analysts had expected a capacity utilisation rate of 79.3%.

The NY Fed Empire State manufacturing index increased to 10.16 in October from 6.2 in September. Analysts had expected the index to rise to 12.1.

The euro fell against the U.S. dollar due to comments by the European Central Bank President Mario Draghi. The European Central Bank (ECB) President Mario Draghi was testifying to the European Union's Parliament on Monday. He pointed out that the ECB could purchase government bonds.

Draghi noted that governments need to implement structural reforms.

Bundesbank said in its monthly report that Germany's economic growth was likely to remain weak in the next few months.

Eurozone's trade surplus widened to €17.7 billion in September from €15.4 billion in August, exceeding expectations for a rise to €16.2 billion. August's figure was revised down from a surplus of €15.8 billion.

The British pound traded slightly higher against the U.S. dollar. The Rightmove house price index for the U.K. declined 1.7% in November, after a 2.6% gain in October.

The Canadian dollar traded slightly lower against the U.S. dollar after the weaker-than-expected foreign securities purchases from Canada. Foreign securities purchases in Canada rose by C$4.37 billion in September, missing expectations for a gain of C$11.32 billion, after a C$10.29 increase in August. August's figure was revised up from a C$10.28 billion rise.

The New Zealand dollar traded higher against the U.S. dollar. In the overnight trading session, the kiwi increased against the greenback after the solid retail sales from New Zealand, but lost all its gains in the morning trading session. Retail sales in New Zealand rose 1.50% in the third quarter, after a 1.1% gain in the second quarter. The second quarter' figure was revised down from a 1.2% increase.

Retail sales excluding automobiles climbed 1.4% in the third quarter, after a 1.2% gain in the second quarter.

The Australian dollar traded lower against the U.S. dollar. In the overnight trading session, the Aussie traded higher against the greenback despite weak new motor vehicle sales. New motor vehicle sales in Australia fell 1.6% in October, after a 2.9% rise in September.

The Japanese yen traded lower against the U.S. dollar. Japan's gross domestic product dropped by an annual rate of 1.6% in the third quarter, after a 7.3% fall in the previous quarter. Analysts had expected a 2.1% gain.

Investors speculate that Japan's Prime Minister Shinzo Abe will announce this week a delay in the sales-tax increase.

Prices for crude oil West Texas Intermediate and Brent fell today, came under pressure on Japan data, which indicated a fall in GDP in the last quarter. Recall that in the 3rd quarter of 2014 Japan's GDP contracted by 1.6% in annual terms. Analysts on average had forecast GDP growth of 2.1%. Thus, the Japanese economy - the third largest economy in the world - suddenly slipped into recession in July-September of 2014, a decrease in the second quarter in a row. According to revised data, in the second quarter decline of the Japanese economy reached 7.3% and not 7.1%, as previously reported. GDP decline in April-June was the highest in five years. The fall in GDP at the end of two consecutive quarters indicates technical recession in the economy.

The focus of investors is also the situation in the countries of OPEC, whose representatives in recent days have stepped up negotiations on the eve of the meeting of 27 November. Oil Minister of Saudi Arabia and Kuwait are against reducing production, while Libya, Venezuela, Ecuador and insist on taking measures to prevent a further fall in prices. Experts note that the sharp decline in oil production quotas that can normalize the balance of supply and demand and to stabilize prices, it seems unlikely. In JPMorgan believe that oil prices could fall to $ 70 a barrel and even touch the level of 65 dollars in early January next year. Such a fall in oil prices would happen if at the November meeting, OPEC decides to cut production quotas.

Pressure on prices also have data on manufacturing activity from the New York Fed. According to the report, the manufacturing index this month rose to 10.16 points against 6.17 points in October. Note the previous value has not been reviewed. Economists had forecast growth of the index to the level of 12.1 points. In general, the sub-indices showed themselves as follows: selling prices index in November fell to 0.00 against 6.82 in October, the employment index fell to 8.51 against 10.23 in October, and the new orders index rose to 9, 14 -1.73. "The general business conditions index shows that business activity in New York in November, producers continues to grow somewhat more rapidly than in the past month. Nevertheless, in October and November, the index readings indicate a reduced rate of growth compared to the period from May to September, when the index was the average level of about 20 points, "- said in a report.

Cost January futures on US light crude oil WTI (Light Sweet Crude Oil) fell to 75.24 dollars a barrel on the New York Mercantile Exchange.

January futures price for North Sea petroleum mix of mark Brent fell $ 0.74 to $ 78.49 a barrel on the London exchange ICE Futures Europe.

Gold prices have not changed today, while remaining close to two-week high, as the decline in global stocks amid disappointing data on Japan was offset by the strengthening of the US currency.

As reported earlier, Japan's GDP for the third quarter of this year fell by 1.6% after falling 7.3% in the second quarter. Thus, the economy entered a phase of recession. Compared to the previous quarter of this year, the national economy contracted by 0.4%. Consumer activity for the period rose by 0.4% after a decline of 5% in the last quarter. GDP decline was a surprise, as most experts predicted a slight increase at the level of 1.5-2%. Earlier it was reported that according to these data, Prime Minister Shinzo Abe will decide whether to postpone scheduled for October 2015 increase in the consumption tax from 8 to 10%.

Meanwhile, experts point out that, despite the recent rise in gold prices, they probably would still be vulnerable in the short term, amid signs that the strengthening of the recovery of the US economy will force the Fed to start raising interest rates earlier and more sharply than expected.

"When the price of gold fell below $ 1,180, was opened a lot of short positions, and when the quotes again risen above this level began covering these positions. The market is still considered an important marker $ 1,180 if she hold out, the price can go up to $ 1,230, "- said a trader in Hong Kong.

Market participants are also waiting for the publication of minutes of the last meeting of the US Federal Reserve and the data on consumer price inflation, leaving on Wednesday and Thursday respectively. If no protocol will signal the strengthening tendency to tighten policy, and inflation will decline, gold is likely to continue strengthening.

We also learned that the outflow of funds from the largest secured gold traded exchange-traded fund SPDR Gold Trust stopped on Friday after an eight-day decline, but its reserves are still close to a six-year low (now the volume of reserves is 720.62 tonnes).

The cost of December gold futures on the COMEX today fell $ 1.5 to 1184.00 dollars per ounce.

The European Central Bank (ECB) President Mario Draghi was testifying to the European Union's Parliament on Monday. He said that Eurozone's economic growth has slowed over the summer months.

Draghi pointed out that the ECB could purchase government bonds.

The ECB president also said that the central bank needs "to remain alert to possible downside risks to our outlook for inflation".

Draghi noted that governments need to implement structural reforms. He said that Greece is starting to benefit from its economic reforms. The economy in Greece was the fastest-growing economy in the Eurozone in the third quarter. It rose by a quarterly rate of 0.7%.

The Philadelphia Federal Reserve released its quarterly survey on Monday. It lowered its fourth quarter forecast for the U.S. economic growth to 2.7% from the previous estimate of 3.1%.

The full-year growth forecast for 2014 was increased to 2.2% from the previous estimate of 2.1 percent due to an improved outlook for the labour market.

The Philadelphia Federal Reserve cut its first-quarter 2015 growth forecast to 2.8% from the estimate of 3.1% in August's survey.

Inflation is expected to be 1.7% in the fourth quarter, down from the previous estimate of 2.1.

The European Central Bank (ECB) President Mario Draghi was testifying to the European Union's Parliament on Monday. He reiterated that the ECB is willing to add further stimulus measures if needed.

Draghi noted that the ECB's credit-easing were working.

The Federal Reserve released its industrial production report on Monday. The U.S. industrial production declined 0.1% in October, missing expectations for a 0.2% rise, after a 0.8% gain in September. September's figure was revised down from a 1.0% increase.

The Fed said that the decrease was driven by a fall in output of consumer goods and materials.

Motor vehicle output declined 1.2% in October. That was the third consecutive decline.

Capacity utilisation rate fell to 78.9% in October from 79.2% in September. September's figure was revised down from 79.3%. Analysts had expected a capacity utilisation rate of 79.3%.

U.S. stock-index futures dropped as data showing Japan fell into recession stoked investor concerns about the global-economic outlook.

Global markets:

Nikkei 16,973.8 -517.03 -2.96%

Hang Seng 23,797.08 -290.30 -1.21%

Shanghai Composite 2,475.12 -3.70 -0.15%

FTSE 6,648.13 -6.24 -0.09%

CAC 4,207.86 +5.40 +0.13%

DAX 9,254.19 +1.25 +0.01%

Crude oil $75.07 (-0.99%)

Gold $1185.90 (+0.03%)

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

Upgrades:

Downgrades:

Other:

Apple (AAPL) target raised to $120 from $115 at RBC Capital Mkts

Home Depot (HD) target raised to $93 from $78 at Canaccord Genuity

EUR/USD: $1.2400(E1.2bn), $1.2475-85(E786mn), $1.2485/90(E500mn), $1.2500(E1.1bn), $1.2515/25 (E350mn)

USD/JPY: Y114.60($559mn), Y114.75($200mn), Y115.00 ($359mn), Y116.00($320mn), Y116.75($444mn)

AUD/USD: $0.8650(A$341mn), $0.8700(A$270mn), $0.8750(A$200mn

USD/CAD: C$1.1305($900mn)

Economic calendar (GMT0):

(Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual)

00:01 United Kingdom Rightmove House Price Index (MoM) November +2.6% -1.7%

00:01 United Kingdom Rightmove House Price Index (YoY) November +7.6% +8.5%

00:30 Australia New Motor Vehicle Sales (MoM) October +2.9% +1.6%

00:30 Australia New Motor Vehicle Sales (YoY) October +0.8% -0.5%

10:00 Eurozone Trade Balance s.a. September 15.4 16.2 17.7

10:00 Germany Bundesbank Monthly Report

The U.S. dollar rose against the most major currencies ahead of the U.S. industrial production and NY Fed Empire State manufacturing index. The greenback increased against the most major currencies as Japan's preliminary gross domestic product declined in the third quarter. Japan's gross domestic product dropped by an annual rate of 1.6% in the third quarter, after a 7.3% fall in the previous quarter. Analysts had expected a 2.1% gain.

The U.S. industrial production is expected to rise 0.2% in October, after a 1.0% increase in September.

The NY Fed Empire State manufacturing index is expected to climb to 12.1 in October from 6.2 in September.

The euro traded lower against the U.S. dollar ahead of the speech by the European Central Bank President Mario Draghi. Eurozone's trade surplus widened to €17.7 billion in September from €15.4 billion in August, exceeding expectations for a rise to €16.2 billion. August's figure was revised down from a surplus of €15.8 billion.

The British pound fell against the U.S. dollar. The Rightmove house price index for the U.K. declined 1.7% in November, after a 2.6% gain in October.

The Canadian dollar traded lower against the U.S. dollar ahead of foreign securities purchases from Canada. Foreign securities purchases in Canada are expected to rise by C$11.32 billion in September, after a C$10.28 increase in August.

EUR/USD: the currency pair fell to $1.2481

GBP/USD: the currency pair declined to $1.5618

USD/JPY: the currency pair climbed to Y116.37

The most important news that are expected (GMT0):

13:30 Canada Foreign Securities Purchases September 10.28 11.32

13:30 U.S. NY Fed Empire State manufacturing index October 6.2 12.1

14:00 Eurozone ECB President Mario Draghi Speaks

14:15 U.S. Industrial Production (MoM) October +1.0% +0.2%

14:15 U.S. Capacity Utilization October 79.3% 79.3%

EUR/USD

Offers $1.2650, $1.2600/05, $1.2580, $1.2525/30

Bids $1.2480, $1.2450, $1.2420/00

GBP/USD

Offers $1.5780/85, $1.5745/50, $1.5700, $1.5665/70

Bids $1.5620/00, $1.5580, $1.5550, $1.5525/20, $1.5500

AUD/USD

Offers $0.8900, $0.8850, $0.8820, $0.8800

Bids $0.8700, $0.8650, $0.8620/00, $0.8550

EUR/JPY

Offers Y147.00, Y146.80, Y145.80/00, Y145.50

Bids Y144.55/50, Y144.20/00, Y143.55/50

USD/JPY

Offers Y117.50, Y117.25, Y116.50

Bids Y115.85/80, Y115.10/00, Y114.50

EUR/GBP

Offers stg0.8100, stg0.8066, stg0.8020

Bids stg0.7950, stg0.7900, stg0.7885/75, stg0.7860/50

European stock indices are trading lower today following the Nikkei which lost almost 3% on news Japan's economy is falling into recession. Japan's GDP fell at an annualised rate of -1.5% not meeting positive forecasts of +2.1% in the third quarter after dropping 7.3% in the second quarter. Euro zones trade balance improved to a plus of 17.2 beating forecasts of 16.2. Investors are awaiting Mario Draghi's speech at 14:00 GMT and U.S. industrial production data at 14:15 GMT.

UK's FTSE 100 index is down -0.27% trading at 6,638.10 points. Germany's DAX 30 lost -0.36% currently trading at 9,219.27 points and France's CAC 40, trading at 4,186.84 points, lost -0.37%.

Oil prices are again under pressure in today's session with Brent Crude trading -1.16% at USD78.49 a barrel and WTI Crude losing -0.79% trading at USD75.22 as concerns about global economic growth were fuelled by Japan, the world's fourth-biggest crude importer, unexpectedly slipping into recession. Weakening global demand and no indications that the OPEC will cut its output weighed on oil prices in recent months.

Gold, currently trading around USD1187.00 a troy ounce is slightly positive in today's session after reaching a new two-week high earlier. Investors are awaiting key data on U.S. economy (Industrial Production 14:15 GMT) for further indications on future growth of the wold's largest economy and its impact on the FED's interest rate policy.

GOLD currently trading at USD1186.700

EUR/USD: $1.2400(E1.2bn), $1.2475-85(E786mn), $1.2485/90(E500mn), $1.2500(E1.1bn), $1.2515/25 (E350mn)

USD/JPY: Y114.60($559mn), Y114.75($200mn), Y115.00 ($359mn), Y116.00($320mn), Y116.75($444mn)

AUD/USD: $0.8650(A$341mn), $0.8700(A$270mn), $0.8750(A$200mn

USD/CAD: C$1.1305($900mn)

BLOOMBERG

English Says Kiwi in Mid-to-High 70s Sustainable for New Zealand

New Zealand Finance Minister Bill English said a U.S.-kiwi exchange rate in the "mid-to-high 70s" is sustainable for the economy as he seeks steady growth and moderate business cycles.

"We have that opportunity ahead of us over the next three or four years of 3 percent growth," English said in an interview with Bloomberg TV from the Group of 20 summit in Brisbane yesterday.

Source: http://www.bloomberg.com/news/2014-11-16/english-says-kiwi-in-mid-to-high-70s-sustainable-for-new-zealand.html

BLOOMBERG

Ruble Less Respected Than Rand as Volatility Hits Record

Russia's ruble is the most volatile relative to other currencies in at least nine years, hurting the country's already battered economy as the unprecedented price swings drive investors away.

One-month implied volatility on the ruble, which reflects traders' expectations for future swings in the exchange rate, reached 33 percent on Nov. 10, almost double that of Brazil's real, the second-most volatile among 41 major currencies tracked by Bloomberg.

Source: http://www.bloomberg.com/news/2014-11-16/ruble-less-respected-than-rand-as-volatility-hits-record.html

REUTERS

Oil price drop could have perverse braking effect on economy

A falling oil price could hamper rather than aid economic recovery as lower export revenues for energy producers will mean fewer petrodollars propping up markets and keeping a lid on the cost of capital.

Research by BNP Paribas published this week found energy exporting countries are set to pull more money out of world markets than they put in for the first time in almost two decades.

Source: http://www.reuters.com/article/2014/11/07/global-economy-petrodollars-idUSL6N0SX4Q820141107

European shares dropped in early trading after Japan falls into recession and investors awaiting Mario Draghi's comments later in the day at 14:00 GMT. Japan's GDP fell at an annualised rate of -1.5% not meeting positive forecasts of +2.1% in the third quarter after dropping 7.3% in the second quarter fuelling concerns about global economic growth. FTSE 100 index is currently trading with a loss of -0.21% at 6,640.70 points, Germany's DAX 30 is down -0.33% trading at 9,222.35 points and France's CAC 40 is trading almost flat at -0.02% currently quoted at 4,201.73 points.

The DOW Jones and S&P 500 were trading flat in Friday's trading session. The DOW Jones closed at 17,634.74, a loss of -0.10%, the S&P500 closed little changed with a plus of +0.02% at 2,039.82 points ending a fourth week of gains. The preliminary University of Michigan's consumer sentiment index published on Friday rose to 89.4 beating forecasts predicting 87.5 and data showing that U.S. inflation expectations fell.

Hong Kong's Hang Seng lost -0.98%, China's Shanghai Composite lost -0.15% closing at 2,475.112 points quickly erasing their gains after profit taking.

Japan's Nikkei closed with a loss of -2.96% at 16,973.80. Preliminary GDP for the third quarter declined -1.5% compared with a forecast of +2.1% after losing -7.3% in the previous quarter reinforcing speculations that Prime Minister Abe will postpone a sales tax hike and hold snap elections in December as Japans economy entered recession unexpectedly.

Economic calendar (GMT0):

(Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual

00:01 United Kingdom Rightmove House Price Index (MoM) November +2.6% -1.7%

00:01 United Kingdom Rightmove House Price Index (YoY) November +7.6% +8.5%

00:30 Australia New Motor Vehicle Sales (MoM) October +2.9% +1.6%

00:30 Australia New Motor Vehicle Sales (YoY) October +0.8% -0.5%

The U.S. dollar traded weaker against its peers during Asian Trade. The greenback is trading flat against the euro after Friday's losses. The preliminary University of Michigan's consumer sentiment index published on Friday rose to 89.4 beating forecasts predicting 87.5 and data showing that U.S. inflation expectations fell.

The Australian dollar is currently trading flat against the U.S. dollar after recovering from early losses followed by gains in Friday's trading.

The kiwi is trading higher against the U.S. dollar after a volatile trading session on Friday and comments by Reserve Bank of New Zealand Governor Graeme Wheeler earlier in the week that the exchange rate is "unjustified" and "further increases in short term interest rates may be required".

The Japanese yen currently trading at USD115.67 recovered against the greenback after hitting a new seven-year low at USD 117.05. Preliminary data on the Japanese GDP showed that Japan unexpectedly fell into recession and the Nikkei declined. Preliminary GDP for the third quarter declined -1.5% compared with a forecast of +2.1% after losing -7.3% in the previous quarter reinforcing speculations that Prime Minister Abe will postpone a sales tax hike.

EUR/USD: the euro is trading flat against the U.S. dollar

USD/JPY: the U.S. dollar traded weaker against the Japanese yen after new seven-year highs

GPB/USD: The British pound traded stronger against the U.S. dollar

The most important news that are expected (GMT0):

10:00 Eurozone Trade Balance s.a. September 15.8 16.2

10:00 Germany Bundesbank Monthly Report

13:30 Canada Foreign Securities Purchases September 10.28 11.32

13:30 U.S. NY Fed Empire State manufacturing index October 6.2 12.1

14:00 Eurozone ECB President Mario Draghi Speaks

14:15 U.S. Industrial Production (MoM) October +1.0% +0.2%

14:15 U.S. Capacity Utilization October 79.3% 79.3%

23:00 Australia Conference Board Australia Leading Index September -0.2%

EUR / USD

Resistance levels (open interest**, contracts)

$1.2671 (4952)

$1.2618 (3595)

$1.2582 (580)

Price at time of writing this review: $ 1.2542

Support levels (open interest**, contracts):

$1.2489 (3636)

$1.2436 (2906)

$1.2380 (3377)

Comments:

- Overall open interest on the CALL options with the expiration date December, 5 is 99716 contracts, with the maximum number of contracts with strike pric $1,3000 (5307);

- Overall open interest on the PUT options with the expiration date December, 5 is 103587 contracts, with the maximum number of contracts with strike price $1,2500 (6415);

- The ratio of PUT/CALL was 1.04 versus 1.06 from the previous trading day according to data from November, 14

GBP/USD

Resistance levels (open interest**, contracts)

$1.6002 (1997)

$1.5903 (658)

$1.5806 (460)

Price at time of writing this review: $1.5717

Support levels (open interest**, contracts):

$1.5592 (1190)

$1.5495 (878)

$1.5397 (949)

Comments:

- Overall open interest on the CALL options with the expiration date December, 5 is 37314 contracts, with the maximum number of contracts with strike price $1,6000 (1997);

- Overall open interest on the PUT options with the expiration date December, 5 is 39638 contracts, with the maximum number of contracts with strike price $1,5900 (2341);

- The ratio of PUT/CALL was 1.06 versus 1.06 from the previous trading day according to data from November, 14

* - 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.