CFD Markets News and Forecasts — 19-05-2017

In May 2017, the DG ECFIN flash estimate of the consumer confidence indicator remained broadly unchanged in both the euro area (+0.3 points to -3.3) and the EU (+0.1 points to -3.3) compared to April.

EURUSD: 1.1000 (EUR 1.2bln) 1.1050 (560m) 1.1100-10 (3.2bln) 1.1150 (437m) 1.1170 (470m) 1.1200 (682m)

USDJPY: 111.00 (USD 327m) 111.30 (290m) 111.70 (215m) 112.50 (751m) 113.00 (622m)

GBPUSD: 1.2890-1.2900 (GBP 476m)

EURGBP: 0.8680 (EUR 180m)

AUDUSD: 0.7400 (AUD 413m)

USDCAD: 1.13430 (USD 250m) 1.3480 (680m) 1.3570 (348m) 1.3600 (220m) 1.3650 (650m) 1.3670 (435m)

U.S. stock-index futures rose as investors' concerns over political uncertainty surrounding Donald Trump's presidency eased.

Stocks:

Nikkei 19,590.76 +36.90 +0.19%

Hang Seng 25,174.87 +38.35 +0.15%

Shanghai 3,090.93 +0.7896 +0.03%

S&P/ASX 5,727.41 -10.90 -0.19%

FTSE 7,462.50 +26.08 +0.35%

CAC 5,316.93 +27.20 +0.51%

DAX 12,618.57 +28.51 +0.23%

Crude $49.96 (+1.24%)

Gold $1,253.60 (+0.06%)

• Monetary policy cannot "run the economy hot" as insurance against labour market risks

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

• Inflation expected to slow to Central Bank's 4 pct target this year, remain close to target thereafter

• IMF calls for inroducing fiscal rule, advancing on structural reforms to improve growth potential

• Russia rate cuts should be gradual given output gap, volatile oil prices

HP (HPQ) target raised to $20 from $18 at RBC Capital Mkts

IBM (IBM) initiated with a Sector Weight at Pacific Crest; target $152

Wal-Mart (WMT) upgraded to Market Perform from Underperform at BMO Capital Markets

Following a 0.4% decline in February, retail sales rose 0.7% in March to $48.3 billion on the strength of higher sales at motor vehicle and parts dealers. Sales were up in 6 of 11 subsectors, representing 53% of total retail trade.

After removing the effects of price changes, retail sales in volume terms rose 1.2%.

Motor vehicle and parts dealers (+3.2%) recorded the largest gain in dollar terms across all subsectors. The increase was largely attributable to higher sales at new car dealers (+3.8%). Used car dealers (+2.7%) and automotive parts, accessories and tire stores (+1.2%) also posted higher sales. Sales at other motor vehicle dealers (-1.4%) were down for the third month in a row.

Sales at general merchandise stores (+1.4%) were up for the third consecutive month.

Electronics and appliance stores (+3.1%) continued their upward trend in March.

The Consumer Price Index (CPI) rose 1.6% on a year-over-year basis in April, matching the gain in March.

Overall, energy prices rose more year over year in April than they did in March, while declines in food prices moderated.

Excluding food and energy, the CPI was up 1.5% on a year-over-year basis in April, following a 1.7% increase in March.

Prices were up in six of the eight major components in the 12 months to April, with the transportation and shelter indexes contributing the most to the year-over-year rise in the CPI. The food index declined on a year-over-year basis for the seventh consecutive month.

Transportation costs rose 4.2% over the 12-month period ending in April, after increasing 4.6% in March. This deceleration was led by the purchase of passenger vehicles index, which rose less on a year-over-year basis in April than in March. Gasoline prices posted a 15.9% year-over-year increase in April, slightly larger than the 15.2% rise registered in March. On a monthly basis, gasoline prices rose 9.5% in April, partly due to supply disruptions at oil refineries, as they changed over to summer fuel blends.

Deere (DE) reported Q2 FY 2017 earnings of $2.14 per share (versus $1.56 in Q2 FY 2016), beating analysts' consensus estimate of $1.69.

The company's quarterly revenues amounted to $7.260 bln (+2.2% y/y), generally in-line with analysts' consensus estimate of $7.267 bln.

The company also issued upside guidance for Q3 and 2017 full year. It forecast Q3 revenues at ~$6.92 bln, up 18% y/y (versus analysts' consensus estimate of $6.24 bln). For FY 2017, it raises revenues expectations to +9% to ~$25.5 bln from +4% (versus analysts' consensus estimate of $24.16 bln) and increased net income projection to $2 bln from $1.5 bln.

DE rose to $120.45 (+6.91%) in pre-market trading.

EUR/USD

Offers: 1.1135 1.1150 1.1165 1.1180 1.1200 1.1260 1.1300

Bids: 1.1100 1.1080 1.1065 1.1050 1.1030 1.1000

GBP/USD

Offers: 1.2985 1.3000 1.3020-25 1.3050 1.3080 1.3100

Bids: 1.2935-40 1.2900 1.2875-80 1.2850 1.2830 1.2800

EUR/JPY

Offers: 124.00 124.30 124.50 124.80 125.00

Bids: 123.50 123.30 123.00 122.80 122.50 122.00

EUR/GBP

Offers: 0.8600 0.8620-25 0.8655-60 0.8680 0.8700

Bids: 0.8570 0.8550 0.8530-35 0.8500-10

USD/JPY

Offers: 111.50 111.60 111.80 112.00 112.30 112.60 112.80 113.00

Bids: 111.20 111.00 110.80 110.50 110.30 110.00

AUD/USD

Offers: 0.7430 0.7450 0.7465 0.7480 0.7500 0.7530 0.7550

Bids: 0.7400 0.7380 0.7370 0.7350 0.7300

Manufacturing order books improved on April, and output growth accelerated in the three months to May, our latest Industrial Trends Survey shows.

The survey of 432 manufacturers reported that total order books were the highest since February 2015, broadly matching the strong levels seen earlier this year. Export orders also stayed robust, equalling the level seen in March (itself, the highest level seen since December 2013).

Output growth picked up pace, seeing the fastest rise since December 2013. This was underpinned by the mechanical engineering and chemicals sectors. Firms expect another firm rise in production over the coming quarter.

• There could be increase in food price inflation in coming months

• Inflation continued falling in April

• To conclude its meeting later friday, after scheduled talks with non-OPEC countries

This reflected surpluses for goods (€29.0 billion), services (€11.6 billion) and primary income (€3.4 billion), which were partly offset by a deficit for secondary income (€9.8 billion).

The 12-month cumulated current account for the period ending in March 2017 recorded a surplus of €363.6 billion (3.4% of euro area GDP), compared with one of €347.2 billion (3.3% of euro area GDP) for the 12 months to March 2016 (see Table 1 and Chart 1). This was due to increases in the surpluses for goods (from €353.8 billion to €364.7 billion) and primary income (from €48.5 billion to €79.3 billion). These were partly offset by a decrease in the surplus for services (from €72.3 billion to €54.8 billion) and an increase in the deficit for secondary income (from €127.3 billion to €135.3 billion).

• Gatilov says U.S. coalition strikes hit civilians in Syria

• Russian foreign ministry says U.S. strikes against Syrian forces were unacceptable

In the April 2017 year, 71,900 more migrants arrived in New Zealand than left, Stats NZ said today. The April 2017 annual net migration remained at the same level as in March 2017. Migrant arrivals numbered 129,800 in the April 2017 year, a new annual record, while migrant departures were 57,900.

In the April 2017 year, 52,600 people arrived in New Zealand on student visas. Of these, 23,900 were student migrants intending to stay for 12 months or more.

In April 2017 the index of producer prices for industrial products rose by 3.4% compared with the corresponding month of the preceding year. This was the highest annual increase since December 2011 (+3.5%). In March 2017 the annual rate of change all over had been 3.1%, as reported by the Federal Statistical Office.

Compared with the preceding month March 2017 the overall index rose by 0.4% in April 2017 (unchanged in March and +0.2% in February).

In April 2017 the price indices of all main industrial groups increased compared with April 2016: Energy prices rose by 4.6%, though the development of prices of the different energy carriers diverged. Prices of petroleum products increased by 14.9% and prices of electricity by 8.2%, whereas prices of natural gas (distribution) decreased by 6.1%. Prices of intermediate goods rose by 4.3%, prices of non-durable consumer goods by 3.2%. Prices of durable consumer goods increased by 1.1% and prices of capital goods by 1.0%.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1200 (5486)

$1.1162 (6707)

$1.1139 (4050)

Price at time of writing this review: $1.1111

Support levels (open interest**, contracts):

$1.1063 (368)

$1.1020 (1916)

$1.0958 (2226)

Comments:

- Overall open interest on the CALL options with the expiration date June, 9 is 79650 contracts, with the maximum number of contracts with strike price $1,1000 (6707);

- Overall open interest on the PUT options with the expiration date June, 9 is 94463 contracts, with the maximum number of contracts with strike price $1,0700 (5675);

- The ratio of PUT/CALL was 1.19 versus 1.15 from the previous trading day according to data from May, 18

GBP/USD

Resistance levels (open interest**, contracts)

$1.3202 (2743)

$1.3104 (2970)

$1.3008 (3923)

Price at time of writing this review: $1.2949

Support levels (open interest**, contracts):

$1.2892 (1377)

$1.2796 (2084)

$1.2697 (2034)

Comments:

- Overall open interest on the CALL options with the expiration date June, 9 is 34396 contracts, with the maximum number of contracts with strike price $1,3000 (3923);

- Overall open interest on the PUT options with the expiration date June, 9 is 35884 contracts, with the maximum number of contracts with strike price $1,1500 (3061);

- The ratio of PUT/CALL was 1.04 versus 1.05 from the previous trading day according to data from May, 18

* - 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.

European stocks dropped Thursday, retreating for a second session as continuing U.S. political turmoil cast doubt on whether President Donald Trump's pro-economic growth policies will become reality.

U.S. stocks closed higher Thursday, following the previous session's brutal selloff, as positive data offered a glimmer of optimism and technology provided an additional fillip to the market.

Stock markets were mostly steady in the Asia-Pacific region on Friday following strong rebounds off session lows a day earlier and overnight gains on Wall Street. Investors continue to take a wait-and-see approach amid the week's developments, which were centered on U.S. politics but also included troubles in Brazil after asset prices there plunged on Thursday amid a scandal involving that country's president.