CFD Markets News and Forecasts — 18-06-2014

Nikkei 15,115.8 +139.83 +0.93%

Hang Seng 23,181.72 -21.87 -0.09%

Shanghai Composite 2,055.52 -11.18 -0.54%

S&P 1,956.98 +14.99 +0.77%

NASDAQ 4,362.84 +25.60 +0.59%

Dow 16,906.62 +98.13 +0.58%

FTSE 1,387.44 -0.31 -0.02%

CAC 4,530.37 -5.70 -0.13%

DAX 9,930.33 +10.01 +0.10%

EUR/USD $1,3587 +0,30%

GBP/USD $1,6990 +0,17%

USD/CHF Chf0,8961 -0,35%

USD/JPY Y101,92 -0,24%

EUR/JPY Y138,49 +0,08%

GBP/JPY Y173,16 -0,05%

AUD/USD $0,9396 +0,66%

NZD/USD $0,8727 +0,85%

USD/CAD C$1,0837 -0,18%

01:30 Australia RBA Bulletin Quarter II

04:30 Japan All Industry Activity Index, m/m April +1.5% -3.7%

04:30 Switzerland SNB Financial Stability Report 2014

07:30 Switzerland SNB Interest Rate Decision 0.25% 0.25%

07:30 Switzerland SNB Monetary Policy Assessment

07:30 Switzerland SNB Press Conference

08:30 United Kingdom Retail Sales (MoM) May +1.3% -0.5%

08:30 United Kingdom Retail Sales (YoY) May +6.9% +4.2%

09:00 Eurozone Eurogroup Meetings

10:00 United Kingdom CBI industrial order books balance June 0 3

12:30 U.S. Initial Jobless Claims June 317 316

14:00 U.S. Leading Indicators May +0.4% +0.6%

14:00 U.S. Philadelphia Fed Manufacturing Survey June 15.4 14.3

The U.S. dollar traded slightly lower against the most major currencies ahead of the Fed’s interest decision today. Market participants expect the Fed will cut its monthly asset purchases by another $10 billion to $35 billion, but the Fed will keep its interest rate unchanged until 2015.

The U.S. current account deficit increased to $111.2 billion in the first quarter from -$87.3 billion in the fourth quarter of 2013. That was the largest level in 18 months. The fourth quarter of 2013 figure was revised down from a deficit of $81.1 billion. Analysts had expected the trade deficit to widen to $96.9 billion.

Exports declined by 1.3% during the first quarter, while imports climbed by 1.5%.

The euro increased against the U.S. dollar in the absence of any major economic reports in the Eurozone.

The British pound traded lower against the U.S. dollar after the Bank of England’s June meeting minutes. The BoE’s monetary policy committee voted unanimously to leave interest rates unchanged at their record low of 0.5% and quantitative easing at £375bn.

The Bank of England policymakers were surprised that markets had not saw a higher chance of an interest rate hike in 2014. But there are still concerns over interest hike this year. The BoE said interest rise could reduce production capacity and it is difficult to revoke the decision.

The Swiss franc traded higher against the U.S. dollar. Credit Suisse ZEW indicator declined to 4.8 points in June from 7.4 in May, missing expectations for an increase to 10.0 points.

The Canadian dollar traded mixed against the U.S. dollar after the wholesale sales in Canada. The wholesale sales in Canada climbed 1.2% in April, exceeding expectations for a 0.3% gain, after a 0.4% decline in March.

The New Zealand dollar increased against the U.S dollar ahead of the Fed’s interest decision. New Zealand’s current account rose to a surplus of NZ$1.41 billion in the first quarter, from a deficit of NZ$1.51 billion in the fourth quarter of 2013. The fourth quarter of 2013 figure was revised down from a deficit of NZ$1.43 billion. Analysts had expected an increase to a surplus of NZ$1.30 billion.

The Australian dollar traded little changed against the U.S. dollar ahead of the Fed’s interest decision. The Conference Board released its leading index for Australia. The index declined 0.1% in April, after a flat reading in March.

The Japanese yen traded higher against the U.S. dollar. The Bank of Japan released its monetary policy meeting minutes. The BoJ said the country's economy is expected to continue its moderate recovery and the current monetary easing appears to be having the intended results.

The BoJ reported that the political unrest in Thailand could impact Japan's exports.

Japan's merchandise trade deficit reached Y909 billion in May, after a deficit of Y811.7 billion in April. Analysts had expected the trade deficit to widen to Y1,189.3 billion.

Japan’s exports declined 2.7% year-on-year in May. That was the first decline in 15 months. Imports dropped at annual rate by 3.6%.

Prices for WTI crude oil declined moderately, having fallen under the influence of a government report on oil stocks. Meanwhile, the price of Brent crude oil has risen, due to the escalation in Iraq, where the conflict between radical Sunni insurgents and Shiite Iraqi soldiers. According to media reports, the largest oil refinery in Iraq was attacked by Sunni militants on Wednesday.

With regard to the report from the U.S. Department of Energy, it showed:

- Commercial oil reserves in the vaults of the U.S. in the week 7-13 June fell by 579,000 barrels to 386.3 million barrels, while the average forecast assumed their fall by 1.1 million barrels.

- Gasoline inventories rose by 785,000 barrels to 214.3 million barrels (analysts had expected growth of 200,000 barrels).

- Distillate inventories rose by 436,000 barrels to 119.4 million barrels, while analysts had expected an increase of 400,000 barrels.

- Refining capacity utilization rate fell 0.8 percentage points to 87.1% (analysts expected growth rate by 0.8 percentage points).

We also recall that yesterday's report from the Institute of Oil API showed:

- Capacity utilization in the week 87.3% vs. 87.8%

- Distillate stocks last week 0.531 million barrels

- Gasoline inventories last week -0.048 million barrels

- Crude oil inventories -5.7 million barrels

Meanwhile, market participants remained cautious ahead of the Federal Reserve statement. Market analysts predict that the Fed would reduce its bond buying program by $ 10 billion from the current $ 45 billion due to the improved economy. The announcement will be followed by a press conference with Fed Chairman Janet Yellen, amid speculation about the timing of a possible rise in interest rates. The Central Bank will also provide their regular forecasts for economic growth, inflation and interest rates.

Cost of the August futures on U.S. light crude oil WTI (Light Sweet Crude Oil) fell to $ 105.57 a barrel on the New York Mercantile Exchange (NYMEX).

August futures price for North Sea Brent crude oil mixture rose $ 0.57 to $ 113.85 a barrel on the London exchange ICE Futures Europe.

Gold prices have stabilized today, as market participants await the announcement of the outcome of the meeting of the U.S. Federal Reserve, which will give an idea about the possible timing recovery rates.

Most economists forecast that the Central Bank will continue to minimize the quantitative easing program, reducing its volume by $ 10 billion - $ 35 billion

In addition, the Fed will publish an updated forecast of indicators such as unemployment, inflation and GDP growth. Will also be published updated forecast regarding the interest rate on the federal credit. In March, leaders of the American Central Bank expected to increase this rate to 1% by the end of next year and 2.25% by the end of 2016. High rates of inflation in the United States on Tuesday raised expectations that the Fed chief Janet Yellen may prove more decisive attitude, and will signal an earlier-than-expected rise in interest rates.

"There are no surprises from the Fed's June meeting will be a shock to the market - said managing director Charles Schwab Fredrik Randy. - The chances of an increase in rates in the environment are almost zero, and yaw to reduce QE will also be a big surprise."

Little impact on the bidding had U.S. data that showed the current account deficit deteriorated more than expected to expand to $ 111.16 billion in the 1st quarter from $ 87.3 billion in Q4. Surplus of primary income declined in the last quarter. Because of the sluggish pace of economic activity during the winter of the current account deficit as a percentage of nominal GDP rose to 2.6% from 2.0%. The increase was in contrast to the improvement of the external position of the U.S., which is still recovering.

Meanwhile, markets track events in Iraq, where the conflict between radical Sunni insurgents and Shiite Iraqi soldiers. According to media reports, the largest oil refinery in Iraq was attacked by Sunni militants on Wednesday.

Also today it was announced that the world's largest reserves secured gold exchange-traded fund SPDR Gold Trust on Tuesday fell for a second day, 0.26 tons to 782.62 tons. On Monday, the outflow of funds was the highest since mid-April.

Margins in India, the second-largest in the world gold imports, fell to a minimum of four months from the end of the wedding season.

The cost of the August gold futures on the COMEX today dropped to $ 1270.8 per ounce.

EUR/USD $1.3500, $1.3540, $1.3575/85, $1.3640

USD/JPY Y101.40/50, Y102.30, Y102.60

USD/CAD Cad1.0800, Cad1.0870

AUD/USD $0.9340/50, $0.9400, $0.9450, $0.9500

GBP/USD $1.6915

EUR/GBP stg0.7975, stg0.8075

U.S. stock-index futures were little changed, following a three-day gain for the Standard & Poor’s 500 Index, as investors awaited the latest monetary-policy decision from the Federal Reserve.

Global markets:

Nikkei 15,115.8 +139.83 +0.93%

Hang Seng 23,181.72 -21.87 -0.09%

Shanghai Composite 2,055.52 -11.18 -0.54%

FTSE 6,789.51 +22.74 +0.34%

CAC 4,535.82 -0.25 -0.01%

DAX 9,943.33 +23.01 +0.23%

Crude oil $106.64 (+0.25%)

Gold $1272.70 (+0.06%)

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

Upgrades:

Downgrades:

Other:

Cisco Systems (CSCO) initiated with a Overweight at Morgan Stanley

Economic calendar (GMT0):

00:00    Australia              Conference Board Australia Leading Index  April      0.0%              -0.1%

00:30    Australia              Leading Index                                              April      -0.5%            +0.1%

08:30    United Kingdom  Bank of England Minutes

09:00    Switzerland         Credit Suisse ZEW Survey (Expectations)     June      7.4        10.0   4.8

11:15    United Kingdom  MPC Member Weale Speaks

The U.S. dollar traded mixed against the most major currencies ahead of the Fed’s interest decision today. Market participants expect the Fed will cut its monthly asset purchases by another $10 billion to $35 billion, but the Fed will keep its interest rate unchanged until 2015.

The U.S. currency was still supported by the yesterday’s better-than expected U.S. consumer inflation. The consumer price index in the U.S. rose 0.4% in May, exceeding expectations for a 0.2% gain, after a 0.3% increase in April.

The euro increased against the U.S. dollar in the absence of any major economic reports in the Eurozone.

The British pound traded lower against the U.S. dollar after the Bank of England’s June meeting minutes. The BoE’s monetary policy committee voted unanimously to leave interest rates unchanged at their record low of 0.5% and quantitative easing at £375bn.

The Bank of England policymakers were surprised that markets had not saw a higher chance of an interest rate hike in 2014. But there are still concerns over interest hike this year. The BoE said interest rise could reduce production capacity and it is difficult to revoke the decision.

The Swiss franc traded higher against the U.S. dollar. Credit Suisse ZEW indicator declined to 4.8 points in June from 7.4 in May, missing expectations for an increase to 10.0 points.

The Canadian dollar traded mixed against the U.S. dollar ahead of the wholesale sales in Canada. The wholesale sales in Canada should climb 0.3% in April, after a 0.4% decline in March.

EUR/USD: the currency pair increased to $1.3570

GBP/USD: the currency pair declined to $1.6931

USD/JPY: the currency pair fell to Y102.15

The most important news that are expected (GMT0):

12:30    Canada              Wholesale Sales, m/m                                     April         -0.4%   +0.3% 

12:30    U.S.                    Current account, bln                                       Quarter I    -81        -96           

17:30    United Kingdom  MPC Member Andy Haldane Speaks                                                  

18:00    U.S.                    FOMC Economic Projections                                                  

18:00    U.S.                    FOMC Statement                                                        

18:00    U.S.                    Fed Interest Rate Decision                                              0.25%   0.25%  

18:00    U.S.                    FOMC QE Decision                                                            45          35         

18:30    U.S.                    Federal Reserve Press Conference                                                    

22:45    New Zealand       GDP q/q                                                         Quarter I   +0.9%  +1.2% 

22:45    New Zealand       GDP y/y                                                         Quarter I  +3.1%  +3.7%

EUR/USD

Offers $1.3630-50, $1.3610/15, $1.3600, $1.3565

Bids $1.3535, $1.3515/10, $1.3500, $1.3485/80, $1.3450

GBP/USD

Offers  $1.7080/85, $1.7040/50, $1.7015-20

Bids $1.6930/20, $1.6910/00, $1.6885/80, $1.6820

AUD/USD

Offers  $0.9450, $0.9400, $0.9375/80, $0.9350

Bids $0.9320, $0.9300, $0.9280

EUR/JPY

Offers  Y139.50, Y139.20, Y139.00, Y138.80

Bids  Y138.00, Y137.50, Y137.20, Y137.00

USD/JPY

Offers  Y102.75/80, Y102.50

Bids Y102.00, Y101.70, Y101.50

EUR/GBP

Offers  stg0.8080, stg0.8050, stg0.8035/40

Bids stg0.7950, stg0.7900

Stock indices traded slightly higher ahead of the Fed’s interest later in the day. Market participants expect the Fed will cut its monthly asset purchases by another $10 billion to $35 billion, but the Fed will keep its interest rate unchanged until 2015.

The violence in Iraq still weighed on stock markets.

The Bank of England (BoE) released its June meeting minutes. The Bank of England policymakers were surprised that financial markets had not saw a higher chance of an interest rate hike in 2014. But there are still concerns over interest hike this year. The BoE said interest rise could reduce production capacity and it is difficult to revoke the decision.

Current figures:

Name                                   Price                                    Change                 Change %

FTSE 100                             6,795.99                              +29.22                        +0.43%

DAX                                      9,940.18                              +19.86                       +0.20%

CAC 40                                 4,540.01                                +3.94                       +0.09%

The Bank of England released its June meeting minutes:

• The BoE’s monetary policy committee voted unanimously to leave interest rates unchanged at their record low of 0.5% and quantitative easing at £375bn;
  
• The Bank of England policymakers were surprised that markets had not saw a higher chance of an interest rate hike in 2014;
  
• There are still concerns over weak growth in earnings and inflation;
  
• Some Bank of England policymakers said "the policy decision had become more balanced in the past couple of months than earlier in the year";
  
• “The more gradual the intended rise in Bank Rate, the earlier it might be necessary to start tightening policy”;
  
• "The economy was starting to return to normal. Part of that normalisation would be a rise in Bank Rate at some point".
  

The Bank of Japan (BoJ) released its May meeting minutes:

• The country's economy is expected to continue its moderate recovery;
  
• The current monetary easing appears to be having the intended results;
  
• The political unrest in Thailand could impact Japan's exports;
  
• The BOJ board decided by a unanimous vote to keep its interest rate unchanged at 0.10%.
  

EUR/USD $1.3500, $1.3540, $1.3575/85, $1.3640

USD/JPY Y101.40/50, Y102.30, Y102.60

USD/CAD Cad1.0800, Cad1.0870

AUD/USD $0.9340/50, $0.9400, $0.9450, $0.9500

GBP/USD $1.6915

EUR/GBP stg0.7975, stg0.8075

Most Asian stock declined ahead of the Fed’s interest decision today. Market participants expect the Fed will cut its asset purchase program by another $10 billion, but the Fed will keep its interest rate unchanged until 2015.

The Bank of Japan (BoJ) released its May monetary policy meeting minutes. The BoJ said the country's economy is expected to continue its moderate recovery and the current monetary easing appears to be having the intended results.

The BoJ reported that the political unrest in Thailand could impact Japan's exports.

Japan's merchandise trade deficit reached Y909 billion in May, after a deficit of Y811.7 billion in April. Analysts had expected the trade deficit to widen to Y1,189.3 billion.

Japan’s exports declined 2.7% year-on-year in May. That was the first decline in 15 months. Imports dropped at annual rate by 3.6%.

Indexes on the close:

Nikkei 225                         15,115.80                  +139.83             +0.93%

Hang Seng                         23,181.72                    -21.87              -0.09%

Shanghai Composite          2,055.52                    -11.18              -0.54%

Nikon Corp. shares declined 2.6% after JPMorgan Chase & Co. reduced its rating.

Economic calendar (GMT0):

00:00    Australia              Conference Board Australia Leading Index  April      0.0%              -0.1%

00:30    Australia              Leading Index                                              April      -0.5%            +0.1%

08:30    United Kingdom  Bank of England Minutes

The U.S. dollar traded mixed against the most major currencies ahead of the Fed’s interest decision today. Market participants expect the Fed will cut its asset purchase program by another $10 billion, but the Fed will keep its interest rate unchanged until 2015.

The U.S. currency was still supported by the yesterday’s better-than expected U.S. consumer inflation. The consumer price index in the U.S. rose 0.4% in May, exceeding expectations for a 0.2% gain, after a 0.3% increase in April.

The New Zealand dollar increased against the U.S dollar ahead of the Fed’s interest decision. New Zealand’s current account rose to a surplus of NZ$1.41 billion in the first quarter, from a deficit of NZ$1.51 billion in the fourth quarter of 2013. The fourth quarter of 2013 figure was revised down from a deficit of NZ$1.43 billion. Analysts had expected an increase to a surplus of NZ$1.30 billion.

The Australian dollar traded little changed against the U.S. dollar ahead of the Fed’s interest decision. The Conference Board released its leading index for Australia. The index declined 0.1% in April, after a flat reading in March.

The Japanese yen traded lower against the U.S. dollar after the release of the Bank of Japan’s monetary policy meeting minutes and Japan’s trade balance. The BoJ said the country's economy is expected to continue its moderate recovery and the current monetary easing appears to be having the intended results.

The BoJ reported that the political unrest in Thailand could impact Japan's exports.

Japan's merchandise trade deficit reached Y909 billion in May, after a deficit of Y811.7 billion in April. Analysts had expected the trade deficit to widen to Y1,189.3 billion.

Japan’s exports declined 2.7% year-on-year in May. That was the first decline in 15 months. Imports dropped at annual rate by 3.6%.

EUR/USD: the currency pair traded mixed

GBP/USD: the currency pair traded mixed

USD/JPY: the currency pair increased to Y102.24

The most important news that are expected (GMT0):

09:00    Switzerland         Credit Suisse ZEW Survey (Expectations)       June        7.4         10.0      

11:15    United Kingdom  MPC Member Weale Speaks                                                  

12:30    Canada               Wholesale Sales, m/m                                     April         -0.4%   +0.3%  

12:30    U.S.                    Current account, bln                                       Quarter I    -81        -96            

17:30    United Kingdom  MPC Member Andy Haldane Speaks                                                  

18:00    U.S.                    FOMC Economic Projections                                                   

18:00    U.S.                    FOMC Statement                                                         

18:00    U.S.                    Fed Interest Rate Decision                                              0.25%   0.25%   

18:00    U.S.                    FOMC QE Decision                                                            45          35          

18:30    U.S.                    Federal Reserve Press Conference                                                     

22:45    New Zealand       GDP q/q                                                         Quarter I   +0.9%  +1.2%  

22:45    New Zealand       GDP y/y                                                         Quarter I  +3.1%  +3.7%

EUR / USD

Resistance levels (open interest**, contracts)

$1.3614 (1799)

$1.3593 (395)

$1.3566 (67)

Price at time of writing this review: $ 1.3548

Support levels (open interest**, contracts):

$1.3522 (1009)

$1.3506 (3648)

$1.3483 (4394)

Comments:

- Overall open interest on the CALL options with the expiration date July, 3 is 29418 contracts, with the maximum number of contracts with strike price $1,3700 (3651);

- Overall open interest on the PUT options with the expiration date July, 3 is 41910 contracts, with the maximum number of contracts with strike price $1,3500 (4848);

- The ratio of PUT/CALL was 1.43 versus 1.43 from the previous trading day according to data from June, 17

GBP/USD

Resistance levels (open interest**, contracts)

$1.7201 (1437)

$1.7102 (1703)

$1.7005 (2206)

Price at time of writing this review: $1.6959

Support levels (open interest**, contracts):

$1.6895 (1021)

$1.6798 (1706)

$1.6699 (2120)

Comments:

- Overall open interest on the CALL options with the expiration date July, 3 is 18035 contracts, with the maximum number of contracts with strike price $1,7000 (2206);

- Overall open interest on the PUT options with the expiration date July, 3 is 21918 contracts, with the maximum number of contracts with strike price $1,6750 (2253);

- The ratio of PUT/CALL was 1.22 versus 1.20 from the previous trading day according to data from June, 17

* - 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.