CFD Markets News and Forecasts — 24-05-2017

(index / closing price / change items /% change)

Nikkei +129.70 19742.98 +0.66%

TOPIX +9.89 1575.11 +0.63%

Hang Seng +25.35 25428.50 +0.10%

CSI 300 -0.02 3424.17 +0.00%

Euro Stoxx 50 -8.41 3586.62 -0.23%

FTSE 100 +29.61 7514.90 +0.40%

DAX -16.28 12642.87 -0.13%

CAC 40 -6.82 5341.34 -0.13%

DJIA +74.51 21012.42 +0.36%

S&P 500 +5.97 2404.39 +0.25%

NASDAQ +24.31 6163.02 +0.40%

S&P/TSX -57.45 15419.49 -0.37%

(pare/closed(GMT +2)/change, %)

EUR/USD $1,1214 +0,27%

GBP/USD $1,2968 +0,05%

USD/CHF Chf0,9735 -0,24%

USD/JPY Y111,56 -0,22%

EUR/JPY Y125,09 +0,04%

GBP/JPY Y144,66 -0,17%

AUD/USD $0,7498 +0,29%

NZD/USD $0,7042 +0,44%

USD/CAD C$1,3406 -0,79%

00:01 France Bank holiday

00:01 Germany Bank Holiday

00:01 Switzerland Bank holiday

02:00 New Zealand Annual Budget Release

08:30 United Kingdom BBA Mortgage Approvals April 41.1 40.8

08:30 United Kingdom Business Investment, q/q(Preliminary) Quarter I -0.9% 0.2%

08:30 United Kingdom Business Investment, y/y (Preliminary) Quarter I -0.9%

08:30 United Kingdom GDP, q/q (Revised) Quarter I 0.7% 0.3%

08:30 United Kingdom GDP, y/y (Revised) Quarter I 1.9% 2.1%

12:30 U.S. Continuing Jobless Claims 1898 1925

12:30 U.S. Goods Trade Balance, $ bln. April -64.8 -64.6

12:30 U.S. Initial Jobless Claims 232 238

22:00 U.S. FOMC Member Kaplan Speak

23:30 Japan Tokyo CPI ex Fresh Food, y/y May -0.1% 0%

23:30 Japan Tokyo Consumer Price Index, y/y May -0.1% 0.0%

23:30 Japan National CPI Ex-Fresh Food, y/y April 0.2% 0.4%

23:30 Japan National Consumer Price Index, y/y April 0.2% 0.4%

Major US stock indices moderately increased on Wednesday, fixing the fifth session increase in a row. The focus of the market was the protocol of the May meeting of the Fed, which signaled that interest rates could be raised already at the June meeting of the Fed

"Fed executives noted that" it would soon be appropriate "to raise rates again. Also, the Fed leaders are increasingly in agreement on the need to reduce the balance, - reported in the protocol. - According to the leaders of the Central Bank, the slowdown in the economy was only temporary. Also, managers expressed concerns about the recent weakness of inflation, but indicated that it is not so weak that the Fed changed its plan for the rate increase. "

In addition, as it became known, the volume of home sales in the US secondary market declined more than expected in April, which was due to the chronic shortage of houses in the market, which kept prices at a high level and pushed potential home buyers. The National Association of Realtors said that home sales in the secondary market decreased by 2.3%, taking into account seasonal fluctuations, and amounted to 5.57 million units (recalculated for annual rates).

Components of the DOW index finished trading mixed (13 in negative, 17 in positive territory). Most fell shares of General Electric Company (GE, -1.66%). The leader of growth was the shares of The Goldman Sachs Group, Inc. (GS, + 2.01%).

Almost all sectors of the S & P index recorded an increase. The growth leader was the conglomerate sector (+ 1.3%). Most fell sector of main materials (-0.3%).

At closing:

DJIA + 0.36% 21.012.42 +74.51

Nasdaq + 0.40% 6.163.02 +24.31

S & P + 0.25% 2.404.39 +5.97

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.4 million barrels from the previous week. At 516.3 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year.

Total motor gasoline inventories decreased by 0.8 million barrels last week, but are near the upper limit of the average range. Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories decreased by 0.5 million barrels last week but are in the upper half of the average range for this time of year. Propane/propylene inventories increased by 1.5 million barrels last week but are in the lower half of the average range. Total commercial petroleum inventories decreased by 3.5 million barrels last week

Stubbornly low supply levels held down existing-home sales in April and also pushed the median number of days a home was on the market to a new low of 29 days, according to the National Association of Realtors.

Total existing-home sales which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 2.3 percent to a seasonally adjusted annual rate of 5.57 million in April from a downwardly revised 5.70 million in March. Despite last month's decline, sales are still 1.6 percent above a year ago and at the fourth highest pace over the past year.

"The Bank of Canada is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.

Inflation is broadly in line with the Bank's projection in its April Monetary Policy Report (MPR). Food prices continue to decline, mainly because of intense retail competition, pushing inflation temporarily lower. The Bank's three measures of core inflation remain below two per cent and wage growth is still subdued, consistent with ongoing excess capacity in the economy.

The global economy continues to gain traction and recent developments reinforce the Bank's view that growth will gradually strengthen and broaden over the projection horizon. As anticipated, growth in the United States during the first quarter was weak, reflecting mostly temporary factors. Recent data point to a rebound in the second quarter. The uncertainties outlined in the April MPR continue to cloud the global and Canadian outlooks.

The Canadian economy's adjustment to lower oil prices is largely complete and recent economic data have been encouraging, including indicators of business investment. Consumer spending and the housing sector continue to be robust on the back of an improving labour market, and these are becoming more broadly based across regions. Macroprudential and other policy measures, while contributing to more sustainable debt profiles, have yet to have a substantial cooling effect on housing markets. Meanwhile, export growth remains subdued, as anticipated in the April MPR, in the face of ongoing competitiveness challenges. The Bank's monitoring of the economic data suggests that very strong growth in the first quarter will be followed by some moderation in the second quarter.

All things considered, Governing Council judges that the current degree of monetary stimulus is appropriate at present, and maintains the target for the overnight rate at 1/2 per cent".

EURUSD: 1.1030 (EUR 371m) 1.1050 (250m) 1.1075 (200m) 1.1100 (220m) 1.1140-50 (1.3bln) 1.1190-00 (260m)

USDJPY: 110.50 (USD 220m) 111.00 (440m) 111.30-40 (445m) 111.80 (380m) 112.00 (USD 2.46bln) 112.10-20 (332m) 112.50-60 (611m)

AUDUSD: 0.7420-30 (AUD 436m ) 0.7500-10 (AUD 492m) 0.7525 (215m)

USDCAD: 1.3400 (332m) 1.3455-60 ( 607m) 1.3500 (270m) 1.3525 (223m) 1.3550 (260m)

NZDUSD: 0.6970 (NZD215m) 0.7090 (282m)

U.S. stock-index futures were flat ahead of the release the minutes of Federal Reserve's May meeting that could cement the chances of a rate hike next month.

Stocks:

Nikkei 19,742.98 +129.70 +0.66%

Hang Seng 25,428.50 +25.35 +0.10%

Shanghai 3,063.79 +1.84 +0.06%

S&P/ASX 5,768.98 +8.78 +0.15%

FTSE 7,503.67 +18.38 +0.25%

CAC 5,342.66 -5.50 -0.10%

DAX 12,644.76 -14.39 -0.11%

Crude $51.26 (-0.41%)

Gold $1,253.20 (-0.18%)

U.S. house prices rose 1.4 percent in the first quarter of 2017 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 6.0 percent from the first quarter of 2016 to the first quarter of 2017. FHFA's seasonally adjusted monthly index for March was up 0.6 percent from February.

"The steep, multi-year rise in U.S. home prices continued in the first quarter," said FHFA Deputy Chief Economist Andrew Leventis. "Mortgage rates during the quarter remained slightly elevated relative to most of last year, but demand for homes remained very strong. With housing inventories still languishing at extremely low levels, the strong demand led to another exceptionally large quarterly price increase."

• Nonetheless, we remain vigilant

• We see no evidence of a widespread development of credit-fuelled bubbles

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

EUR/USD

Offers: 1.1200-05 1.1225.30 1.1250 1.1275-80 1.1300

Bids: 1.1165 1.1140-50 1.1120 1.1100 1.1080 1.1050

GBP/USD

Offers: 1.3000 1.3030 1.3050 1.3080 1.3100

Bids: 1.2965 1.2950 1.2935 1.2920 1.29001.2875-80 1.2850

EUR/JPY

Offers: 125.30 125.50 125.80 126.00

Bids: 125.00 124.50 124.30 124.00 123.80 123.50

EUR/GBP

Offers: 0.8630-35 0.8650 0.8680 0.8700

Bids: 0.8600 0.8585 0.8570 0.8550 0.8500

USD/JPY

Offers: 112.00-05 112.30 112.50 112.80 113.00

Bids: 111.80 111.50 111.30 111.00 110.80-85 110.50

AUD/USD

Offers: 0.7485 0.7500 0.7530 0.7550 0.7570 0.7600

Bids: 0.7450 0.7430 0.7400 0.7385 0.7350

• Output and employment gaps justify caution

• Shares concerns expressed in ECB minutes, statements

• Must be cautious about premature withdrawal of stimulus

• Preferable to err on the side of removing stimulus too late than too early

• In june, the Governing Council will draw on the latest information and will have new projections as well as an updated assessment of the distribution of risks surrounding the economic outlook

• Upswing is becoming increasingly solid and continues to broaden across sectors and countries

• Underlying inflation pressures still give scant indications of a convincing upward trend as domestic cost pressures, notably wage growth, remain subdued

• From today's point of view, there are signs of a stronger global recovery and a pick-up in international trade

• Says base proposal for cuts is 9-month extension

EURUSD: 1.1030 (EUR 371m) 1.1050 (250m) 1.1075 (200m) 1.1100 (220m) 1.1140-50 (1.3bln) 1.1190-00 (260m)

USDJPY: 110.50 (USD 220m) 111.00 (440m) 111.30-40 (445m) 111.80 (380m) 112.00 (USD 2.46bln) 112.10-20 (332m) 112.50-60 (611m)

AUDUSD: 0.7420-30 (AUD 436m ) 0.7500-10 (AUD 492m) 0.7525 (215m)

USDCAD: 1.3400 (332m) 1.3455-60 ( 607m) 1.3500 (270m) 1.3525 (223m) 1.3550 (260m)

NZDUSD: 0.6970 (NZD215m) 0.7090 (282m)

• I see BoJ's inflation overshoot commitment and YCC as constructive developments

• Transmission mechanisms for BoJ have approached their limit

• BoJ will likely to be able to control jgb yields with smaller volumes of purchases

• BoJ policy, combined with fiscal stimulus, could help inflation reach 2 pct

• Cannot rule out possibility BoJ will have to do more

• One option is for govt to commit to fiscal spending and BoJ to commit to keeping debt/gdp ratio the same

• BoJ could allow overshoot of inflation to offset rise in debt/gdp ratio

• British police say increased police numbers and operations across London with immediate

• British interior minister says military reinforcements will remain under the command of the police

• Will stay at heightened state of alert until we know this investigation is no longer active

More dairy, wood, and wine exports in April 2017 led to a goods trade surplus of $578 million, Stats NZ said today.

"In April we had the largest monthly trade surplus since 2015," international trade statistics senior manager Daria Kwon said. "This trimmed back the annual deficit, which reached an eight-year high in February."

The annual trade deficit reduced to $3.5 billion in April from $3.7 billion in March. In February 2017 it peaked at $3.8 billion, the highest trade deficit in almost eight years.

April's goods trade surplus was the largest monthly surplus since March 2015 and the largest April surplus since April 2011. Easter fell in April this year, but the holiday appeared to have little impact on exports. Both exports and imports reached new highs for an April month.

Moody's Investors Service has today downgraded China's long-term local currency and foreign currency issuer ratings to A1 from Aa3 and changed the outlook to stable from negative.

The downgrade reflects Moody's expectation that China's financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows. While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government.

The stable outlook reflects our assessment that, at the A1 rating level, risks are balanced. The erosion in China's credit profile will be gradual and, we expect, eventually contained as reforms deepen. The strengths of its credit profile will allow the sovereign to remain resilient to negative shocks, with GDP growth likely to stay strong compared to other sovereigns, still considerable scope for policy to adapt to support the economy, and a largely closed capital account.

German consumers were still highly confident in May of this year, providing reliable support to the German economy. This was reflected in heightened expectations of the economy and income. Propensity to buy fell slightly, but still remained at a high level. GfK predicts the consumer climate to reach 10.4 points in its forecast for June, which is 0.2 points higher than in May.

Germans view their domestic economy as definitively on the upswing, even in late spring of 2017. This is evidenced by the improvement in economic expectation in May, which reached a new two-year high. Income expectation also profited with a further increase on its already high level. Although propensity to buy did lose its gains from the previous month, it nevertheless achieved a historically high level in May, also reflecting the good mood among consumers.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1282 (6133)

$1.1240 (5302)

$1.1217 (6271)

Price at time of writing this review: $1.1173

Support levels (open interest**, contracts):

$1.1117 (969)

$1.1090 (1112)

$1.1058 (2231)

Comments:

- Overall open interest on the CALL options with the expiration date June, 9 is 82402 contracts, with the maximum number of contracts with strike price $1,1000 (6271);

- Overall open interest on the PUT options with the expiration date June, 9 is 98898 contracts, with the maximum number of contracts with strike price $1,0700 (5502);

- The ratio of PUT/CALL was 1.20 versus 1.20 from the previous trading day according to data from May, 23

GBP/USD

Resistance levels (open interest**, contracts)

$1.3202 (3468)

$1.3104 (3157)

$1.3008 (4190)

Price at time of writing this review: $1.2967

Support levels (open interest**, contracts):

$1.2894 (1332)

$1.2797 (2245)

$1.2698 (1765)

Comments:

- Overall open interest on the CALL options with the expiration date June, 9 is 35692 contracts, with the maximum number of contracts with strike price $1,3000 (4190);

- Overall open interest on the PUT options with the expiration date June, 9 is 36664 contracts, with the maximum number of contracts with strike price $1,1500 (3061);

- The ratio of PUT/CALL was 1.03 versus 1.04 from the previous trading day according to data from May, 23

* - 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 closed in the green on Tuesday, with French shares among the biggest advancers as eurozone economic activity remained at a six-year high. But travel-related shares edged lower following a suspected terror attack by a suicide bomber in Manchester, England, which killed 22 people, including children, and injured 59 as people left an Ariana Grande concert on Monday night.

U.S. stock-index benchmarks closed higher Tuesday, marking a fourth straight session in the green following the White House's release of its 2018 budget proposal. The moves come amid mixed economic data and an updraft in shares of financial firms.

China's main stock index fell one percent and the Australian dollar slipped on Wednesday after Moody's cut its sovereign credit rating on China. Moody's said growing leverage in China prompted the downgrade, and warned about slowing economic growth. China's massive debt been at the center of concerns among economists and Beijing in recent months, and has rattled global financial markets since late last year.