CFD Markets News and Forecasts — 21-08-2018

Major US stock indices rose on Tuesday, supported by encouraging earnings reports, as well as hopes that the US and China will be able to resolve their tariff dispute.

The dynamics of the market were also influenced by yesterday's comments of US President Donald Trump, who criticized the head of the Fed Jerome Powell for his policy of gradual raising interest rates, and accused the EU countries and China of manipulating the exchange rates of national currencies.

Quotes of oil rose to a maximum in a week, helped by the prospect of price support from US sanctions against Iran, although the trade dispute between Washington and Beijing kept traders and analysts cautious.

Most DOW components recorded a rise (19 out of 30). The leader of growth was shares of Intel Corporation (INTC, + 2.41%). Outsider were the shares of Merck & Co., Inc. (MRK, -1.43%).

Most sectors of S & P completed the auction in positive territory. The sector of industrial goods grew most (+ 1.0%). The most significant decline is in the utilities sector (-0.6%)

At closing:

Dow 25,822.29 +63.60 +0.25%

S&P 500 2,862.96 +5.91 +0.21%

Nasdaq 100 7,859.17 +38.17 +0.49%

U.S. stock-index futures rose on Tuesday on hopes that resumed talks between the U.S. and China could resolve their trade dispute.

Global Stocks:

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

3M (MMM) initiated with a Equal-Weight at Morgan Stanley; target $212

Honeywell (HON) initiated with a Overweight at Morgan Stanley; target $175

Tesla (TSLA) downgraded to Equal Weight from Overweight at Consumer Edge Research

AT&T (T) added to BofA/Merrill's 'US 1 List'

Sales were down in five of seven subsectors, accounting for 71% of total wholesale sales. The motor vehicle and parts and the miscellaneous subsectors contributed the most to the decline.

In volume terms, wholesale sales decreased 1.1%.

On a quarterly basis, wholesale sales increased 1.0% in current dollars and 0.7% in constant dollars in the second quarter. This marked the ninth consecutive quarterly increase in both current and constant dollars.

The motor vehicle and parts subsector reported the largest decline in dollar terms, down 1.9% to $10.9 billion in June, mainly due to lower sales in the motor vehicle industry (-2.4%). This marked the third consecutive decline for the motor vehicle and parts subsector.

The industrial commodity was up 1.05% at $6,051.50 a metric ton in midmorning trade in London, having rallied 2% so far this week.

Gold prices edged up 0.2% to $1,194.16 a troy ounce, with analysts citing President Trump's criticism of Federal Reserve monetary policy as being among the factors dragging on the dollar.

The survey of 379 manufacturers revealed that output growth slowed slightly in the three months to August but remained well above the long-term average.

Output growth remained broad-based, with 13 out of 17 sub-sectors reporting growth, driven by the 'food, drink and tobacco' sector. Manufacturers expect output growth to continue at a similarly firm pace over the next three months.

While total order books faded slightly compared with the previous month, they were still comfortably above the long-run average. Export orders remained strong and well above the long run average.

Meanwhile, expectations for output price inflation remained steady, and broadly similar to those seen over the past six months.

Public sector net borrowing (excluding public sector banks) in the latest full financial year (April 2017 to March 2018) was £39.4 billion; that is, £6.4 billion less than in the previous financial year (April 2016 to March 2017) and £5.8 billion less than official (Office for Budget Responsibility) expectations; this is the lowest net borrowing for 11 years (financial year ending 2007).

Public sector net debt (excluding public sector banks) was £1,777.5 billion at the end of July 2018, equivalent to 84.3% of gross domestic product (GDP), an increase of £17.5 billion (or a decrease of 1.7 percentage points as a ratio of GDP) on July 2017.

Central government net cash requirement in the current financial year-to-date (April 2018 to July 2018) was £0.3 billion; that is, £4.4 billion less than in the same period in 2017; this is the lowest year-to-date (April to July) net cash requirement for 17 years (2001).

• Says No Deal Brexit Would Be A Big Geo-Strategic Mistake For Continent Of Europe

• Cautiously Optimistic That We Will Get A Brexit Deal

EUR/USD

Resistance levels (open interest**, contracts)

$1.1632 (2353)

$1.1598 (825)

$1.1570 (5779)

Price at time of writing this review: $1.1513

Support levels (open interest**, contracts):

$1.1459 (3988)

$1.1442 (5395)

$1.1420 (10691)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date September, 7 is 138179 contracts (according to data from August, 20) with the maximum number of contracts with strike price $1,1500 (10691);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2977 (3424)

$1.2940 (884)

$1.2880 (623)

Price at time of writing this review: $1.2824

Support levels (open interest**, contracts):

$1.2757 (3154)

$1.2740 (2502)

$1.2717 (1211)

Comments:

- Overall open interest on the CALL options with the expiration date September, 7 is 35746 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 32529 contracts, with the maximum number of contracts with strike price $1,2900 (3154);

- The ratio of PUT/CALL was 0.91 versus 0.92 from the previous trading day according to data from August, 20.

* - 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 dollar fell and may continue to weaken after President Donald Trump said he does not agree with the Fed's decision to raise interest rates, and that the Fed should do "what's good for the country."

The latest criticism of President Donald Trump, in an interview with Reuters, came four days before the long-awaited speech of Fed Chairman Jerome Powell on Friday at the annual Jackson Hole Symposium.

"The market will react to the Tram, not so much on the idea that the Fed will change its opinion on monetary policy, how much the dollar is due to the idea of ​​the president's assault on the Fed," said Mark Chandler, head of the currency exchange strategy at Brown Browns Harriman. "I would say that the dollar is already corrected, but Trump's comments will probably prevent him from continuing to grow."

The dollar index touched a minimum of 95.78, having decreased by 0.6%. Treasury yields were also at the lows of the day, and stocks lost some of their profits before closing in the green zone. The yield on 10-year bonds was 2.82%.

• It is expected that government spending will make a significant contribution to economic growth through 2020

• Members of the Council recognized the implications of arid conditions for the agricultural sector

• The next rate movement is likely to be up, depending on the level of unemployment and inflation

• The bank will become a source of stability and confidence, adhering to the current policy

• The Australian dollar has fallen against the US dollar, but is still within the trading range of the last two years

• Household consumption was supported by revenue growth in the second quarter

• Uncertainties about the prospects for household consumption decreased

After a stagnation in the previous month, exports and imports developed negatively. While exports fell by a seasonally adjusted 3.0 percent in July 2018, imports fell by 2.8 percent. The development of the Chemical-Pharmaceuticals division burdened the overall results of both traffic directions. The surplus on the trade balance stood at 1.2 billion francs.