Analytics, News, and Forecasts for CFD Markets: currency news — 24-07-2018.

U.S. private sector companies experienced a robust rise in overall business activity during July, supported by an improving economic backdrop and another sharp upturn in incoming new work. Relatively strong rates of business activity growth were recorded in both the manufacturing and service sectors. Intense cost pressures continued in July, which resulted in a sharp and accelerated increase in average prices charged by private sector firms. The latest rise in output charges was the fastest since composite data were first collected in October 2009.

The seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index posted 55.9 in July, down slightly from 56.2 in June and the lowest reading for three months. Nonetheless, the headline index remained well above the 50.0 nochange threshold and signalled another robust expansion of overall private sector output.

• UK PM May Takes Control Of Brexit Talks, Relegates Brexit Department

U.S. house prices rose in May, up 0.2 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The previously reported 0.1 percent increase in April was revised upward to 0.2 percent.

The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. From May 2017 to May 2018, house prices were up 6.4 percent.

For the nine census divisions, seasonally adjusted monthly price changes from April 2018 to May 2018 ranged from -0.6 percent in the East North Central division to +1.5 percent in the East South Central division. The 12-month changes were all positive, ranging from +4.9 percent in the West South Central division to +9.1 percent in the Mountain division.

"Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It's as simple as that - and everybody's talking! Remember, we are the "piggy bank" that's being robbed. All will be Great!".

The survey of 357 manufacturers revealed that new orders continued to expand at a brisk pace, with a pick-up in the domestic market offsetting a slight slowdown in new export orders. Sentiment about general business conditions was unchanged for a second consecutive quarter, but optimism regarding export prospects stalled, having increased steadily for much of the past two years. Growth in output and total orders are expected to slow moderately in the three months to October.

Investment intentions deteriorated significantly in the three months to July. Firms are planning to keep spending on plant and machinery broadly stable over the year ahead and expect to cut back on investment in buildings at a pace that is broadly in line with the historical average. However, firms have dialled down on investment in "intangible" assets - product & process innovation and training & re-training - with spending in both categories expected to fall at a pace unseen since the global financial crisis.

Ratings firm Icra says India's central bank is expected to raise rates further next week amid June's inflation data and rising state spending. The RBI did its first increase in 4 1/2 years last month, but Icra expects policymakers to maintain their neutral stance amid a lack of clarity regarding on inflation and fiscal trends.

• Eurozone Banks Expect Continued Net Easing of Credit Standards in All Segments in 3Q 2018

The IHS Markit Eurozone Composite PMI fell to 54.3 from 54.9 in June, according to the July flash reading (which is based on approximately 85% of usual replies). The latest reading was the secondweakest since November 2016, only narrowly beating May's recent low.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: "The flash PMI suggests the eurozone started the second half of the year on a relatively soft footing, indicative of GDP growth slowing in the third quarter. The July reading is consistent with quarterly GDP growth of 0.4%, down from a 0.5% expansion indicated by the surveys for the second quarter. "The renewed slowdown comes as a disappointment, confirming suspicions that June's rebound was temporary, largely due to businesses in some countries making up for an unusually high number of public holidays in May. "Given the waning growth of new business and further slide in business optimism, the outlook has also deteriorated, notably in manufacturing, where the surveys saw worries about trade wars intensify markedly in July".

July saw a further pick-up in the rate of growth of Germany's private sector economy from a 20-month low in May to a five-month high, driven by a stronger increase in manufacturing output. New order growth also gathered pace, seeing the steepest rise for four months. Private sector firms continued to add staff at a marked rate, while price pressures intensified.

The IHS Markit Flash Germany Composite Output Index rose to 55.2 in July from 54.8 in June, to signal a second successive monthly acceleration in the rate of growth in private sector business activity. The implied expansion was the fastest since February, but remained below the strong trend shown over 2017.

At 54.5 in July, down from 55.0 in the previous month, the IHS Markit Flash France Composite Output Index remained above the crucial 50.0 nochange mark for a twenty-fifth month in a row. Although down since June, the index remained strong in the context of the series history.

Growth remained broad-based across the manufacturing and service sectors, albeit noticeably sharper in the latter. Service providers recorded a twenty-fifth consecutive expansion in business activity, buoyed by a further rise in new orders. Robust economic conditions and the football World Cup were cited as factors contributing to growth. The rate of increase eased slightly from June but remained marked overall.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1833 (3547)

$1.1780 (2354)

$1.1747 (155)

Price at time of writing this review: $1.1667

Support levels (open interest**, contracts):

$1.1623 (3360)

$1.1583 (3546)

$1.1560 (2648)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date August, 13 is 86663 contracts (according to data from July, 23) with the maximum number of contracts with strike price $1,1850 (5245);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3247 (723)

$1.3196 (672)

$1.3164 (285)

Price at time of writing this review: $1.3072

Support levels (open interest**, contracts):

$1.3034 (2122)

$1.3002 (2227)

$1.2966 (1597)

Comments:

- Overall open interest on the CALL options with the expiration date August, 13 is 24110 contracts, with the maximum number of contracts with strike price $1,3600 (3206);

- Overall open interest on the PUT options with the expiration date August, 13 is 27288 contracts, with the maximum number of contracts with strike price $1,2950 (2300);

- The ratio of PUT/CALL was 1.13 versus 1.13 from the previous trading day according to data from July, 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.

• Japan Flash Manufacturing PMI falls to 20-month low of 51.6 in July, from 53.0 in June

• Input and output price inflation both accelerate to multi-year highs

• Business confidence dips noticeably

Commenting on the Japanese Manufacturing PMI survey data, Joe Hayes, Economist at IHS Markit, which compiles the survey, said: "Flash survey data pointed to a slowing of growth momentum for Japan's manufacturing sector at the beginning of the third quarter, following a robust performance so far this year. "New business grew at a much weaker rate and was broadly flat, while export demand, despite further yen depreciation, deteriorated for a second month running.

"Slowing demand presents a worrying development given input delivery times lengthened to the sharpest extent in over seven years. Supply chain difficulties reportedly contributed to the fastest rate of input price inflation in since March 2011. Although output prices were raised at a relatively notable pace, the rate of increase was far weaker than that of costs, implying profit margin erosion".