CFD Markets News and Forecasts — 07-08-2018

Major US stock indexes finished trading in positive territory, helped by the success of technology stocks, and a strong season of reports for the second quarter, which strengthened investors' optimism about the strength of the US economy.

Meanwhile, the JOLTS survey published by the US Bureau of Labor Statistics showed that in June the number of vacancies increased only to 6.662 million from 6.659 million in May (revised from 6.638 million). Analysts had expected the number of vacancies to drop to 6.666 million. The vacancy rate was 4.3 percent, unchanged from May. The number of vacancies has changed little in the private sector and in the government sector. As for industries, the number of vacancies has increased in the educational sector (+20,000), but declined in the transportation, warehousing and utilities segment (-84,000).

In addition, the report showed that the index of economic optimism in the US, calculated by the newspaper Investor's Business Daily and the research firm TechnoMetrica Institute of Policy and Politics, again improved in August, and was higher than the forecasts of experts. The index rose to 58.0 points from 56.4 points in June, while experts expected that it would rise only to 57.2 points. The index recorded a fourth increase in a row and reached the highest level during President Trump's time. Recall, the value of the index above 50 points indicates optimism. It should be emphasized that the index is above the level of 50 points for 23 consecutive months (since October 2016), which is the longest series in the history of this study, that is, more than a decade.

Most components of DOW have finished trading in positive territory (21 out of 30). Caterpillar Inc. was the growth leader. (CAT, + 2.14%). Outsider were the shares of Apple Inc. (AAPL, -0.91%).

Most sectors of the S & P recorded a rise. The sector of industrial goods grew most (+ 0.8%), while the utilities sector showed the greatest decrease (-0.4%).

At closing:

Dow 25,628.91 +126.73 +0.50%

S&P 500 2,858.45 +8.05 +0.28%

Nasdaq 100 7,883.66 +23.99 +0.31%

The number of job openings was little changed at 6.7 million on the last business day of June, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.7 million and 5.5 million, respectively. Within separations, the quits rate was unchanged at 2.3 percent and the layoffs and discharges rate was little changed at 1.2 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

U.S. stock-index futures rose moderately on Tuesday, as strong corporate earnings lifted investors' sentiment in the absence of new information regarding the U.S.-China trade spat. In addition, oil price rose, as supply concerns resurfaced as the first round of renewed U.S. sanctions on Iran took effect, supporting energy stocks as well.

Global Stocks:

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

Caterpillar (CAT) target lowered to $168 from $174 at Stifel

Travelers (TRV) initiated with Neutral at Credit Suisse

Brent crude was up 1.25% to $74.67 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.91% at $69.64 a barrel, in the aftermath of the Trump administration's move to reimpose punishing economic sanctions on Iran, measures that are expected to ultimately paralyze the OPEC nation's crude exports.

• South Korean Lawmakers: Parliament Can't Ratify Deal Unless U.S. Exempts Korean Cars From Proposed Auto Tariffs

• The In-Principle Deal Struck in March Focused on Vehicle Rules, Steel Quotas and Cutting the U.S. Trade Deficit

The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!

Betting on further dollar strength might be akin to "dancing on a volcano" as recent gains have come from investors clamoring for U.S. assets, say Commerzbank analysts. A WSJ measure of the greenback is up 3.3% in 2018, with the Nasdaq and the S&P 500 on Monday notching their second-highest and third-highest closing levels respectively. That's despite rising government debt that will weigh on the economy and the dollar in the medium-to-long term, Commerzbank says. Meanwhile, there have been no new signals suggesting dollar strength, they say. Empirical data show periods of high twin deficits were initially positive for the dollar in the past, but led to weakness later, Commerzbank says. - via WSJ

• House prices in the three months to July increased by 3.3% against the same period a year earlier with the average house price rising to hit a new record of £230,280

• On a monthly basis, prices rose by 1.4% in July, while in the latest quarter (May-July) prices were 1.3% higher than in the preceding three months (February-April 2018).

Russell Galley, Managing Director, Halifax, said: "House prices picked up in July, with the annual rate of growth rising from 1.8% in June to 3.3% in July, the largest increase since last November. The average house price is now £230,280, the highest on record. House prices in the three months to July were 1.3% higher than in the previous quarter, the fastest quarterly increase, again, since November. "While the quarterly and annual rates of house price growth have improved, housing activity remains soft. Despite the recent modest improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggest that approvals will remain broadly flat until the end of the year".

EUR/USD trades up 0.2% at 1.1580 in early European trade, though it remains vulnerable to concerns about trade tensions which are supportive for the dollar, Danske Bank says. However, any falls below 1.15 "should be shallow and short lived," even though a break below this level "cannot be ruled out," it says. Concerns over the Italian budget "should not weigh much further" on the euro near term, long positions in the dollar are "stretched," and the euro has solid chart support at 1.15, says Danske Bank

EUR/USD

Resistance levels (open interest**, contracts)

$1.1749 (3339)

$1.1692 (1511)

$1.1652 (2762)

Price at time of writing this review: $1.1576

Support levels (open interest**, contracts):

$1.1523 (2934)

$1.1499 (4027)

$1.1471 (5232)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date September, 7 is 120976 contracts (according to data from August, 6) with the maximum number of contracts with strike price $1,1500 (10386);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3117 (1920)

$1.3089 (587)

$1.3044 (511)

Price at time of writing this review: $1.2968

Support levels (open interest**, contracts):

$1.2915 (1179)

$1.2897 (1258)

$1.2876 (2762)

Comments:

- Overall open interest on the CALL options with the expiration date September, 7 is 30240 contracts, with the maximum number of contracts with strike price $1,3450 (3338);

- Overall open interest on the PUT options with the expiration date September, 7 is 24860 contracts, with the maximum number of contracts with strike price $1,2900 (3080);

- The ratio of PUT/CALL was 0.82 versus 0.82 from the previous trading day according to data from August, 6.

* - 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.

The average of household spending in Japan was down 1.2 percent on year in June, according to rttnews - coming in at 267,641 yen.

That exceeded expectations for a decline of 1.4 percent following the 3.9 percent drop in May.

The average of monthly income per household stood at 808,716 yen, up 9.1 percent on year.

Among the individual components, spending on fuel was down 6.0 percent, along with medical care (-4.8 percent), housing (-3.6 percent) and recreation (-8.2 percent).

Spending for education jumped 10.4 percent and furniture was up 7.7 percent.

"At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

The global economic expansion is continuing. A number of advanced economies are growing at an above-trend rate and unemployment rates are low. Growth in China has slowed a little, with the authorities easing policy while continuing to pay close attention to the risks in the financial sector. Globally, inflation remains low, although it has increased in some economies and further increases are expected given the tight labour markets.

The Bank's central forecast for the Australian economy remains unchanged. GDP growth is expected to average a bit above 3 per cent in 2018 and 2019. This should see some further reduction in spare capacity. Business conditions are positive and non-mining business investment is continuing to increase. Higher levels of public infrastructure investment are also supporting the economy, as is growth in resource exports. One continuing source of uncertainty is the outlook for household consumption. Household income has been growing slowly and debt levels are high. The drought has led to difficult conditions in parts of the farm sector".

Germany exported goods to the value of 115.5 billion euros and imported goods to the value of 93.7 billion euros in June 2018.

This is the highest monthly import value since foreign trade statistics were first published in 1950. Based on provisional data, the Federal Statistical Office (Destatis) also reports that German exports increased by 7.8% and imports by 10.2% in June 2018 year on year. After calendar and seasonal adjustment, exports did not change from May 2018 while imports were up 1.2%.

The foreign trade balance showed a surplus of 21.8 billion euros in June 2018. In June 2017, the surplus amounted to 22.1 billion euros. In calendar and seasonally adjusted terms, the foreign trade balance recorded a surplus of 19.3 billion euros in June 2018.

In June 2018,production in industry was down by 0.9% from the previous month on a price, seasonally and calendar adjusted basis according to provisional data of the Federal Statistical Office (Destatis). In May 2018, the revised figure shows an increase of 2.4% (primary +2.6%) from April 2018.

In June 2018, production in industry excluding energy and construction was down by 0.8%. Within industry, the production of capital goods decreased by 0.6% and the production of consumer goods by 1.6%. The production of intermediate goods showed a decrease of 0.8%. Energy production was up by 2.9% in June 2018 and the production in construction decreased by 3.2%.