CFD Markets News and Forecasts — 27-08-2018

Major US stock indices have risen markedly, while the S & P 500 and Nasdaq have updated their record highs, as the US and Mexico reached a trade agreement.

In addition, as shown by data provided by the Federal Reserve Bank of Dallas, in July, the business activity of Texas producers declined moderately, contrary to the forecasted improvement. According to the report, the Dallas Federal Reserve's manufacturing index in August fell to 30.9 points from 32.3 points in July. Analysts had expected the index to rise to 36.9 points.

Oil prices rose slightly on Monday amid a committee monitoring the oil production restriction deal, said more than 100% of the fulfillment of the OPEC + agreement in July. However, the ongoing trade dispute between the US and China limited the increase in quotations.

Most DOW components completed the plus (26 of 30). The leader of growth was the shares of The Goldman Sachs Group, Inc. (GS, + 3.12%). Outsider were shares Pfizer Inc. (PFE, -1.99%).

Almost all sectors of S & P recorded a rise. The industrial goods sector grew most (+ 1.2%). The decrease was shown only by the utilities sector (-0.4%).

At closing:

Dow 26,049.64 +259.29 +1.01%

S & P 500 2,896.74 +22.05 + 0.77%

Nasdaq 100 8,017,90 +71.92 +0.91%

U.S. stock-index futures rose on Monday, helped by reports the U.S. and Mexico were close to resolving bilateral differences on NAFTA.

Global Stocks:

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

Tesla (TSLA) target lowered to $400 from $450 at Nomura

The French government has reduced the forecast for GDP growth for the next year, and the budget for 2019 will be based on a new forecast, said Prime Minister Edward Philippe in an interview with Le Journal du Dimanche.

According to the forecast, the economy will grow by 1.7% in 2019, although it was previously predicted that the expansion will be 1.9%.

Nevertheless, Prime Minister Edward Philippe said that France intends to cut taxes and cut government spending.

The government will submit its budget for 2019 at the end of September.

On Monday, oil prices little changed but fears that a trade dispute between the US and China will lead to a breakdown in global economic growth remains, although the impending US sanctions against Iran's oil sector keep oil from a more significant fall.

On Friday, data from Baker Hughes showed that active drilling rigs in the US fell by 9 units to 860, and this was the strongest decline since May 2016.

"The drop in the number of drilling rigs in the US and the drop in US inventories last week support oil prices amid a protracted war in the US and China that could weaken global growth and affect the demand for oil," said Stephen Innes, Stephen Innes, Asia-Pacific Trade Division in Oanda Corp. in Singapore.

• Sees 3Q GDP Growth of 0.5% on Quarter

• Current Conditions 106.4

• Ifo Expectations 101.2

EUR/USD falls early Monday, last down 0.2% at 1.1599, with trading volumes likely to be muted due to a bank holiday in the U.K. Danske Bank expects U.S. dollar carry--the cost or benefit of holding an asset--to drive a new bout of USD strength, causing EUR/USD to settle around 1.15 for now. U.S. Federal Reserve Chairman Jerome Powell helped to fuel weakness in the U.S. currency into the weekend, pushing EUR/USD "firmly" above 1.16 as his speech in the central bank symposium in Jackson Hole questioned the Fed's conviction as to how far rates can be lifted, says Danske analyst Allan von Mehren. - via Wall Street Journal

The dollar remains under pressure on Monday, after a decline on Friday, amid a speech by the chairman of the Federal Reserve, Jerome Powell.

Powell defended the desire of the US Central Bank to raise interest rates, despite criticism by President Donald Trump about higher borrowing costs.

Powell's speech was not optimistic enough. He advocated a gradual rate hike, rejecting criticism that the Fed is acting too fast or too slowly, jeopardizing the economy. He also said that there are good reasons to expect that the economy will continue to remain strong. "Further gradual tightening of the policy will remain appropriate if the growth of incomes and employment continues, but for a significant increase in incomes, productivity must grow faster," Powell said. "The consolidation of inflation expectations is vital." I am confident that the Fed will do "everything necessary" if inflation becomes to be a threat"

The president of the Federal Reserve Bank of Cleveland, Loretta Mester, in an interview with CNBC on the sidelines of an annual press conference hosted by the Federal Reserve Bank of Kansas City in Jackson Hole, said that a strong US economic growth justifies further rate hikes.

"Given the economic growth remains above the trend, inflation at 2% and very low unemployment, it is clear that the Fed has good reasons for further tightening of monetary policy," Mester said.

Mester also said that, in her opinion, US GDP growth will reach almost 3% in 2018, followed by a slowdown in 2019 and 2020. In her opinion, a gradual rate increase is the best way.

"Our relationship with Mexico is getting closer by the hour. Some really good people within both the new and old government, and all working closely together....A big Trade Agreement with Mexico could be happening soon!"

• Should Continue To Make Good Use Of Fiscal And Financial Policy

EUR/USD

Resistance levels (open interest**, contracts)

$1.1737 (2508)

$1.1688 (3031)

$1.1662 (5173)

Price at time of writing this review: $1.1617

Support levels (open interest**, contracts):

$1.1521 (5623)

$1.1482 (10469)

$1.1439 (4306)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date September, 7 is 135732 contracts (according to data from August, 24) with the maximum number of contracts with strike price $1,1500 (10469);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2985 (3458)

$1.2954 (1193)

$1.2907 (674)

Price at time of writing this review: $1.2851

Support levels (open interest**, contracts):

$1.2803 (3114)

$1.2779 (2733)

$1.2750 (1115)

Comments:

- Overall open interest on the CALL options with the expiration date September, 7 is 36813 contracts, with the maximum number of contracts with strike price $1,2950 (3458);

- Overall open interest on the PUT options with the expiration date September, 7 is 33698 contracts, with the maximum number of contracts with strike price $1,2900 (3114);

- The ratio of PUT/CALL was 0.92 versus 0.91 from the previous trading day according to data from August, 24.

* - 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.