Novosti i prognoe: devizno tržište od 17-07-2018

• In The Near Term Things Look Good

• Expect Tax Bill Will Support Demand For Two, Three Years

• Decline In Labor Share Of Profits 'Very Troubling'

• Latest Inflation Figures Boosted by Gasoline, Energy Prices

• U.S. Economy Has Grown at Solid Pace So Far This Year

• 2Q GDP Growth Considerably Stronger Than 1Q

• Consumer Spending Lifted by Job Gains, Rising After-Tax Incomes, Household Optimism

• Business Investment Growing at Healthy Rate

• Will Keep Close Eye on Inflation to Keep It Near 2%

• Federal Tax, Spending Policies Likely to Continue Supporting Expansion

• Expect Strong Job Market, Near-2% Inflation to Remain for Next Several Years

• Difficult to Predict Outcome of Trade Policy Discussions, Fiscal Policy Changes

• Moderate Wage Growth Is Not Causing High Inflation

• Unemployment Rate Is Low, Expected to Fall Further

For the second quarter as a whole, industrial production advanced at an annual rate of 6.0 percent, its third consecutive quarterly increase. Manufacturing output moved up 0.8 percent in June. The production of motor vehicles and parts rebounded last month after truck assemblies fell sharply in May because of a disruption at a parts supplier. Factory output, aside from motor vehicles and parts, increased 0.3 percent in June. The index for mining rose 1.2 percent and surpassed the level of its previous historical peak (December 2014); the output of utilities moved down 1.5 percent. At 107.7 percent of its 2012 average, total industrial production was 3.8 percent higher in June than it was a year earlier.

Capacity utilization for the industrial sector increased 0.3 percentage point in June to 78.0 percent, a rate that is 1.8 percentage points below its long-run (1972-2017) average.

Sales rose in 14 of 21 industries, representing 64% of total manufacturing sales. The chemical, machinery, and wood product industries accounted for most of the gains in May. The transportation equipment industry posted the largest decline.

In constant dollars, manufacturing sales were up 0.9%.

Sales in the chemical industry were up for the second consecutive month, rising 6.2% to $4.7 billion in May on higher volumes of products sold. There were widespread gains in most chemical sub-industries, particularly in the pesticide, fertilizer and other agricultural chemical manufacturing industry.

Machinery sales rose 8.9% to $3.3 billion, following three consecutive monthly declines. Higher sales of other general-purpose machinery as well as commercial and service machinery led the gains.

In June 2018, the Italian consumer price index increased by 0.2% on monthly basis and by 1.3% compared with June 2017 (+1.0% in May 2018). The flash estimate was +1.4%.

The acceleration of the growth on annual basis of All items index was mainly due to prices of Non-regulated energy products (from +5.3% to +9.4%) and, to a lesser extent, of Unprocessed food (+2.4% in May to +3.4%) and of Services related to transport (from +1.7% to +2.9%).

As a consequence, inflation excluding energy and unprocessed food (core inflation) was +0.8% (as in the previous month) and inflation excluding energy was +1.0% (from +0.8% in May).

The increase on monthly basis of All items index was mainly due to the rises of prices of Non-regulated energy products (+2.3%) and of Services related to transport (+2.2).

• EU Slow To Act On Derivatives

Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.7% excluding bonuses, and by 2.5% including bonuses, compared with a year earlier.

Latest estimates show that average weekly increased by 0.4% excluding bonuses, and by 0.2% including bonuses, compared with a year earlier.

Estimates from the Labour Force Survey show that, between December 2017 to February 2018 and March to May 2018, the number of people in work increased, the number of unemployed people decreased and the number of people aged from 16 to 64 years not working and not seeking or available to work (economically inactive) also decreased.

There were 32.40 million people in work, 137,000 more than for December 2017 to February 2018 and 388,000 more than for a year earlier.

The unemployment rate (the number of unemployed people as a proportion of all employed and unemployed people) was 4.2%, down from 4.5% for a year earlier and the joint lowest since 1975.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1828 (2271)

$1.1809 (2648)

$1.1779 (155)

Price at time of writing this review: $1.1730

Support levels (open interest**, contracts):

$1.1658 (3204)

$1.1622 (3168)

$1.1581 (3936)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date August, 13 is 85684 contracts (according to data from July, 16) with the maximum number of contracts with strike price $1,1850 (5193);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3334 (658)

$1.3305 (667)

$1.3281 (105)

Price at time of writing this review: $1.3255

Support levels (open interest**, contracts):

$1.3208 (1919)

$1.3188 (1542)

$1.3162 (1641)

Comments:

- Overall open interest on the CALL options with the expiration date August, 13 is 22263 contracts, with the maximum number of contracts with strike price $1,3600 (3217);

- Overall open interest on the PUT options with the expiration date August, 13 is 25546 contracts, with the maximum number of contracts with strike price $1,3100 (2127);

- The ratio of PUT/CALL was 1.15 versus 1.15 from the previous trading day according to data from July, 16.

* - 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.

But not enough to get the market excited about an imminent change in monetary policy. "If inflation materializes as we expect, the RBNZ will eventually increase" rates, "but that's a long way away yet and any moves will be gradual."

• Progress on unemployment and inflation likely to be gradual

• AUD had fallen "a little" but still within range of past two years

• Board noted household income growth had been subdued for past couple of years

• Households with high debt more vulnerable to economic shocks

• Downside risks to global growth had increased, trade tensions harmful

• Rate moves had larger impact on disposable incomes for those with high debt

• RBA noted rising funding costs at local banks, not clear how long this would last

"As I said today and many times before, "I have GREAT confidence in MY intelligence people." However, I also recognize that in order to build a brighter future, we cannot exclusively focus on the past - as the world's two largest nuclear powers, we must get along!".

Inflation rates for the June 2018 quarter:

• quarter: 0.4 percent

• annual: 1.5 percent.

• From the June 2017 quarter to the June 2018 quarter, the CPI increased 1.5 percent.

• Housing and household utilities increased 3.1 percent; rentals for housing were up 2.5 percent; and construction was up 3.9 percent.

• Transport increased 2.0 percent, with prices for petrol up 10 percent.

• Miscellaneous goods and services increased 3.1 percent, with insurance prices up 5.7 percent.

• In the June 2018 quarter compared with the March 2018 quarter, the CPI rose 0.4 percent (up 0.3 percent with seasonal adjustment).

• Housing and household utilities rose 0.9 percent, influenced by higher prices for rents (up 0.8 percent) and construction (up 1.1 percent).

• Food prices rose 0.8 percent, influenced by seasonally higher prices for vegetables (up 7.0 percent).

• Recreation and culture prices fell 1.4 percent, influenced by lower prices for audio-visual equipment (down 15 percent) and subscriber TV (down 7.2 percent).