CFD Markets News and Forecasts — 29-03-2018

The major US stock indices rose significantly amid a sharp rebound in technological stocks after a sell-off ahead of a long weekend, marking the end of the volatile quarter on Wall Street.

The focus of investors' attention was also data on the United States. The index of purchasing managers in Chicago fell to 57.4 in March from 61.9 in February, noting the minimum level for the year. Operating activities of companies continued to expand, but the pace of expansion slowed for the third consecutive month. 3 of the 5 components of the index weakened, only employment and supply of suppliers expanded. Compared to March 2017, the index rose by 0.5%.

At the same time, the final results of the studies presented by Thomson-Reuters and the Michigan Institute showed that in March, US consumers felt more optimistic about the economy than last month. According to the data, the consumer sentiment index rose to 101.4 compared with the final reading for February 99.7 and the preliminary value for March 102.0. It was predicted that the index will be 102.0 points.

The cost of oil grew by about 0.8%, helped by the prospect that OPEC will adhere to its oil production restrictions by the end of this year. Recall, OPEC, Russia and some other producers that are not part of OPEC, began to reduce production in January 2017, which has since raised the price of Brent by about a quarter.

Almost all components of the DOW index finished trading in positive territory (27 out of 30). The leader of growth was shares of Intel Corporation (INTC, + 3.57%). Outsider were shares of General Electric Company (GE, -1.54%).

All sectors of the S & P index recorded an increase. The conglomerate sector grew most (+ 2.5%).

At closing:

Dow 24,103.11 +254.69 +1.07%

S & P 500 2,640.87 +35.87 +1.38%

Nasdaq 100 7,063.44 +114.22 +1.64%

In the week ending March 24, the advance figure for seasonally adjusted initial claims was 215,000, a decrease of 12,000 from the previous week's revised level. This is the lowest level for initial claims since January 27, 1973 when it was 214,000. The previous week's level was revised down by 2,000 from 229,000 to 227,000. The 4-week moving average was 224,500, a decrease of 500 from the previous week's revised average. The previous week's average was revised up by 1,250 from 223,750 to 225,000.

Personal income increased $67.3 billion (0.4 percent) in February according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $53.9 billion (0.4 percent) and personal consumption expenditures (PCE) increased $27.7 billion (0.2 percent).

Real DPI increased 0.2 percent in February and Real PCE increased less than 0.1 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

The increase in personal income in February primarily reflected increases in wages and salaries and nonfarm proprietors' income.

Real gross domestic product edged down 0.1% in January, offsetting part of the 0.2% growth in December. The decline was mainly the result of lower output of non-conventional oil extraction and decreased activity in real estate. The 20 industrial sectors were evenly split between increases and decreases.

The output of goods-producing industries fell 0.4% in January, mainly on lower non-conventional oil extraction. There were increases in the manufacturing and construction sectors.

The output of services-producing industries was essentially unchanged in January, as a decline in real estate and rental and leasing was offset by increases in the wholesale, retail, and finance and insurance sectors. This was the weakest monthly growth for services-producing industries in more than a year

The inflation rate in Germany as measured by the consumer price index is expected to be 1.6% in March 2018. Based on the results available so far, the Federal Statistical Office (Destatis) also reports that the consumer prices are expected to increase by 0.4% on February 2018.

In March 2018, the harmonised index of consumer prices for Germany, which is calculated for European purposes, is expected to increase by 1.5% year on year and 0.4% on February 2018.

U.S. stock-index futures rose moderately on Thursday, as tech stocks rebounded after a steep two-day sell-off. Investors also digested weekly data on jobless claims and report on personal income/spending for February.

Global Stocks:

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

Starbucks (SBUX) downgraded to Neutral from Outperform at Wedbush

Yandex N.V. (YNDX) upgraded to Buy from Neutral at Citigroup

Boeing (BA) initiated with an Overweight at Barclays

Int'l Paper (IP) initiated with a Buy at UBS; target $63

The UK's current account deficit was £18.4 billion (3.6% of gross domestic product (GDP)) in Quarter 4 (Oct to Dec) 2017, a narrowing of £0.7 billion from a revised deficit of £19.2 billion (3.7% of GDP) in Quarter 3 (July to Sept) 2017.

This is the narrowest current account deficit as a percentage of GDP since Quarter 1 (Jan to Mar) 2012 when it was 3.1%.

The narrowing in the current account deficit in Quarter 4 2017 was due mostly to a narrowing of the deficits on primary income and secondary income; partially offsetting these was a widening to the deficit on total trade.

The primary income deficit narrowed by £1.8 billion to £6.6 billion in Quarter 4 2017 as UK earnings on investment abroad increased by £1.0 billion and payments to foreign investors decreased by £0.7 billion.

UK gross domestic product (GDP) in volume terms was estimated to have increased by 0.4% between Quarter 3 (July to Sept) and Quarter 4 (Oct to Dec) 2017, unrevised from the second estimate of GDP.

Growth in the latest quarter was driven by professional, scientific, administration and support activities within the services sector.

GDP was estimated to have increased by 1.8% between 2016 and 2017, an upward revision of 0.1 percentage points from the second estimate; this was slightly lower than the 1.9% growth seen between 2015 and 2016.

Household spending grew by 1.7% between 2016 and 2017, its slowest rate of annual growth since 2011, in part reflecting the increased prices faced by consumers.

In the three months to January 2018, services output increased by 0.6% compared with the three months ending October 2017; this is the strongest growth since the three months ending December 2016.

Architectural and engineering activities made the largest contribution to the three-month on three-month growth, contributing 0.08 percentage points.

In the three months to January 2018, services output increased by 1.3% compared with the three months ending January 2017.

The Index of Services increased by 0.2% between December 2017 and January 2018.

In March 2018, the KOF Economic Barometer fell from 108.4 in the previous month (revised up from 108.0) by 2.4 points to a level of 106.0. This drop of the barometer more than corrected its rise in February. From a longer-term perspective, whilst the barometer is quite volatile at the right margin, it is moving in a range clearly above average since autumn 2016.

The strongest negative contributions to this result come from manufacturing, followed by the indicators from the exporting industry. On the other hand, the indicators from the financial sector, from the hospitality industry and those relating to domestic private consumption have remained practically unchanged.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2444 (5581)

$1.2404 (2677)

$1.2382 (847)

Price at time of writing this review: $1.2323

Support levels (open interest**, contracts):

$1.2277 (5417)

$1.2237 (3594)

$1.2193 (4895)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date April, 6 is 107888 contracts (according to data from March, 28) with the maximum number of contracts with strike price $1,2150 (6592);

GBP/USD

Resistance levels (open interest**, contracts)

$1.4238 (3761)

$1.4183 (2152)

$1.4136 (1660)

Price at time of writing this review: $1.4068

Support levels (open interest**, contracts):

$1.3976 (1186)

$1.3935 (1097)

$1.3891 (3401)

Comments:

- Overall open interest on the CALL options with the expiration date April, 6 is 31166 contracts, with the maximum number of contracts with strike price $1,4300 (2825);

- Overall open interest on the PUT options with the expiration date April, 6 is 31748 contracts, with the maximum number of contracts with strike price $1,3800 (3554);

- The ratio of PUT/CALL was 1.02 versus 1.00 from the previous trading day according to data from March, 28

* - 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.

• UK annual house price growth steady at 2.1%

• London again weakest performing region, with house prices down 1% year-on-year

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: "UK house price growth remained broadly stable in March at 2.1%, little changed from the 2.2% recorded the previous month. House prices fell by 0.2% over the month, after taking account of seasonal factors. "On the surface, the relatively subdued pace of house price growth appears at odds with recent healthy rates of employment growth, a modest pick-up in wage growth and historically low borrowing costs. However, consumer confidence has remained subdued, due to the ongoing squeeze on household finances as wage growth continues to lag behind increases in the cost of living".

• Says China confident in its ability counter any trade and investment protectionism steps

• China will take all possible steps to protect its interests

• Opposes U.S. bullying on trade

• China does not want a trade war with the U.S.

• Historically, dollar has always risen against yen when U.S.- Japanese interest rate differentials widened to 3 pct