CFD Markets News and Forecasts — 20-08-2018

The main US stock indices rose slightly against the backdrop of investor optimism regarding the upcoming trade talks between China and the United States.

According to the Wall Street Journal, Chinese and US negotiators are developing a roadmap for talks to put an end to their trade deadlock, culminating in a meeting between President Trump and Chinese leader Xi Jinping at multilateral summits in November. Officials of both countries said about this publication.

The focus of investors' attention was also the statements of the head of the Federal Reserve of Atlanta Bostika, who noted that he expects another increase in rates this year. Bostik said that the latest developments on the world stage have exacerbated downward risks for the US economy prospects, and added that the decline in the Turkish lira was unexpected.

In addition, today US President Trump noted that he is not happy with the current policy of the Fed and raising rates. Trump is concerned that the rate hike will cool the economy, which demonstrates very high growth rates. Some of Trump's political advisers fear that if the Fed continues to tighten its policy, the pace of economic growth and job creation may slow down, just when it's time to start the election campaign ahead of the 2020 elections.

Most of the components of DOW have finished trading in positive territory (19 out of 30). Leader of the growth were shares of NIKE, Inc. (NKE, + 3.15%). Outsider were shares Walmart Inc. (WMT, -1.90%).

Most sectors of the S & P recorded a rise. The commodities sector grew most strongly (+ 0.8%), while the conglomerate sector showed the greatest decline (-0.4%)

At closing:

Dow 25,758.69 +89.37 +0.35%

S&P 500 2,857.05 +6.92 +0.24%

Nasdaq 100 7,821.01 +4.68 +0.06%

U.S. stock-index futures rose on Monday, underpinned by hopes the planned talks between the U.S. and China could resolve their trade dispute.

Global Stocks:

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

NIKE (NKE) upgraded to Positive from Neutral at Susquehanna

NIKE (NKE) upgraded to Overweight from Neutral at Piper Jaffray

Deere (DE) target lowered to $190 at Stifel

Tesla (TSLA) target lowered to $195 from $308 at JP Morgan

Danske Bank recommends investors buy Norway's 2.00% May 2023-dated government bond asset swapped in a box versus Germany, expecting

them to benefit from an anticipated strengthening of the Norwegian krone. "A stronger NOK, more swap-hedging from Norwegian corporates and little NGB [Norwegian government bond] supply for the rest of 2018 should make NGBs more expensive," says Danske's chief analyst Jakob Ekholdt Christensen. The Norges Bank has flagged an intention to raise the key rate by 25 basis points to 0.75% at its September meeting. - via WSJ

Moody's Investors Service has downgraded the Government of Turkey's long-term issuer ratings to Ba3 from Ba2 and changed its rating outlook to negative, concluding the review for downgrade that was initiated on 1 June 2018. The senior unsecured bond ratings and senior unsecured shelf ratings have also been downgraded to Ba3 and (P)Ba3 respectively.

Concurrently, Moody's has downgraded to Ba3 from Ba2 the senior unsecured bond rating of Hazine Mustesarligi Varlik Kiralama A.S., a special purpose vehicle wholly owned by the Republic of Turkey from which the Turkish Treasury issues sukuk lease certificates, and changed its rating outlook to negative.

The key driver is the continuing weakening of Turkey's public institutions and the related reduction in the predictability of Turkish policy making. That weakening is exemplified by heightened concerns over the independence of the central bank, and by the lack of a clear and credible plan to address the underlying causes of the recent financial distress, notwithstanding recent statements by the government. The tighter financial conditions and weaker exchange rate, associated with high and rising external financing risks, are likely to fuel inflation further and undermine growth, and the risk of a balance of payments crisis continues to rise, says Moody's.

In July 2018 the index of producer prices for industrial products rose by 3.0% compared with the corresponding month of the preceding year. In June the annual rate of change all over had been 3.0%, too, as reported by the Federal Statistical Office.

Compared with the preceding month June the overall index rose by 0.2% in July 2018 (+0.3% in June 2018 and +0.5% in May 2018).

In July 2018 the price indices of all main industrial groups increased compared with July 2017: Energy prices were up 6.5%, though the development of prices of the different energy carriers diverged. Prices of petroleum products were up 16.8%, whereas prices of electricity increased by 7.4% and prices of natural gas (distribution) rose by 3.1%. Prices of intermediate goods were up 3.2%. Prices of durable consumer goods rose by 1.6% and of capital goods by 1.3%, whereas prices of non-durable consumer goods increased by 0.4%

• New seller asking prices hit usual summer slowdown this month resulting in virtual price standstill (-0.1% or -£248)

• Number of properties coming to market jumps up by 8.6% compared to same month last year, but no corresponding increase in buyer numbers to soak up new seller influx (sales agreed holding steady at -0.2% compared to the same month a year ago)

• Stock for sale per agent highest since September 2015, meaning sellers in areas of over-supply need to compete harder on price, presentation and promotion of their property to attract buyers

• The proportion of sellers already on the market that are reducing their asking prices is the highest at this time of year since 2011, indicating initial over-optimism on price

EUR/USD

Resistance levels (open interest**, contracts)

$1.1563 (5527)

$1.1539 (816)

$1.1505 (752)

Price at time of writing this review: $1.1426

Support levels (open interest**, contracts):

$1.1379 (4638)

$1.1348 (6390)

$1.1313 (2785)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date September, 7 is 137757 contracts (according to data from August, 17) with the maximum number of contracts with strike price $1,1500 (10559);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2974 (3434)

$1.2899 (516)

$1.2844 (243)

Price at time of writing this review: $1.2743

Support levels (open interest**, contracts):

$1.2667 (1920)

$1.2638 (1299)

$1.2604 (1035)

Comments:

- Overall open interest on the CALL options with the expiration date September, 7 is 35612 contracts, with the maximum number of contracts with strike price $1,2950 (3434);

- Overall open interest on the PUT options with the expiration date September, 7 is 32782 contracts, with the maximum number of contracts with strike price $1,2900 (3175);

- The ratio of PUT/CALL was 0.92 versus 0.93 from the previous trading day according to data from August, 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.