CFD Markets News and Forecasts — 09-04-2018

Major US stock indexes retreated from session highs, but finished the session in positive territory, as the growth of the technology sector and the health sector, as well as the softer position of US policy makers on China's trade tariffs, triggered a rebound after the market was sold last week.

On weekend, several top politicians of the White House softened the rhetoric about import duties for China, and US Treasury Secretary Munchin said he did not expect the beginning of a trade war, since the US intends to continue negotiations with China. At the same time, he added that if China is not yet ready to create conditions for "free and fair mutual trade," the US will aggressively defend its interests. China's President Xi Jinping plans to speak at the Boao Forum tomorrow, and investors will closely monitor what he will say about the threat of US tariffs.

A slight effect on the course of trading was provided by a report from the Conference Board, which showed that the US employment trends index, which is a set of labor market indicators, increased slightly in March, continuing the recent trend. According to the data, the employment trends index jumped to 107.72 points from 107.31 points in February (revised from 107.74 points). This change represents an increase in the index by 5.5% per annum. Recall, the index includes 8 indicators of the labor market. The Conference Board reported that in March 5 out of 8 components made a positive contribution to the growth of the index.

Meanwhile, oil prices rose by about 2%, helped by investors cautious about the air strike on the Syrian airbase over the weekend, which overshadowed some concerns over the growing trade dispute between China and the United States that undermined the oil market

Most components of the DOW index finished trading in positive territory (20 out of 30). Leader of the growth were shares of Merck & Co., Inc. (MRK, + 5.68%). Outsider were shares of General Electric Company (GE, -1.53%).

Almost all sectors of the S & P index recorded an increase. The health sector grew most (+ 1.4%). Only the sector of conglomerates dropped (-0.3%).

At closing:

Dow 23,980.00 +47.24 +0.20%

S&P 500 2,613.16 +8.69 +0.33%

Nasdaq 100 6,950.34 +35.23 +0.51%

U.S. stock-index futures rose on Monday, signaling a likelihood of a rebound in the market after Friday's tumble, as a softer rhetoric of the White House officials regarding import duties underpinned hopes that the U.S. and China could resolve their trade dispute at the negotiating table.

Global Stocks:

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

General Motors (GM) upgraded to Overweight from Equal-Weight at Morgan Stanley

Caterpillar (CAT) upgraded to Positive from Mixed at OTR Global

When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade. No, it sounds like STUPID TRADE - going on for years!

• No discussion with on specific further easing

• Inappropriate to whittle down stimulus now to create policy room to address future slowdown in growth

• Impact from planned 2019 sales tax hike will be smaller than previous hike in 2014

• Will pay close attention to impact from planned sales tax hike in 2019

• No need to worry too much about economic bust after 2020 olympics

• Told PM Abe that BoJ to do utmost to achieve 2 pct inflation target quickly

All regions of the world are on an economic downturn in April. Despite the still good assessment of the situation, there is no doubt that the global economy is cooling off.

Expectations for the Euro area are negative again for the first time since July 2016. The downward dynamic for Germany is even more pronounced.

The euphoria for the US economy is also fading noticeably. Expectations drop to a value of -7 percentage points. Trump's statements and measures on punitive tariffs raise serious concerns. The component for Expectations of the sentix Global Aggregate falls to its lowest value since February 2016.

• Prices in the last three months to March were 2.7% higher than in the same three months a year earlier, edging up from the 1.8% annual growth recorded in February

• The average price in March was £227,871, the highest recorded price

• House prices in the latest quarter (January-March) were -0.1% lower than in the preceding three months (October-December), the second consecutive decline on this measure

• On a monthly basis, prices grew by 1.5% in March this follows a 0.5% rise in February; monthly changes can be volatile • Mortgages in the UK are at their most affordable level in a decade

Russell Galley, Managing Director, Halifax, said: "House prices in the three months to March were largely unchanged compared with the previous quarter. The annual rate of growth continues to be in a narrow range of under 3%; though the average price of £227,871 is a new high. "Activity levels, like house price growth, have softened compared with a year ago. Mortgage approvals are down compared to 12 months ago, whilst home sales have remained flat in the early months of the year".

According to surveys by the State Secretariat for Economic Affairs (SECO), at the end of March 2018 130'413 unemployed people were registered at the regional employment agencies (RAV), 13'517 less than in the previous month. The unemployment rate fell from 3.2% in February 2018 to 2.9% in the month under review. Compared to the same month of the previous year, unemployment fell by 21,867 persons (-14.4%). In addition to economic and seasonal components, the technical adjustments in recording the unemployed also had an impact in March.

• Three or four rate hikes this year right "right direction"

• Sees inflation exceeding 2 pct for next few years

• Expects jobless rate to fall to 3.5 pct by next year

• Above-trend growth doesn't necessarily pose a risk at this time

Germany exported goods to the value of 104.7 billion euros and imported goods to the value of 86.3 billion euros in February 2018. Based on provisional data, the Federal Statistical Office (Destatis) also reports that German exports increased by 2.4% and imports by 4.7% in February 2018 year on year. After calendar and seasonal adjustment, exports fell by 3.2% and imports by 1.3% compared with January 2018.

The foreign trade balance showed a surplus of 18.4 billion euros in February 2018. In February 2017, the surplus amounted to +19.8 billion euros. In calendar and seasonally adjusted terms, the foreign trade balance recorded a surplus of 19.2 billion euros in February 2018

EUR/USD

Resistance levels (open interest**, contracts)

$1.2462 (3857)

$1.2412 (1425)

$1.2364 (235)

Price at time of writing this review: $1.2274

Support levels (open interest**, contracts):

$1.2204 (4058)

$1.2167 (3435)

$1.2127 (2274)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date May, 4 is 74217 contracts (according to data from April, 6) with the maximum number of contracts with strike price $1,2250 (4058);

GBP/USD

Resistance levels (open interest**, contracts)

$1.4222 (2019)

$1.4201 (904)

$1.4170 (883)

Price at time of writing this review: $1.4094

Support levels (open interest**, contracts):

$1.4030 (694)

$1.3975 (1652)

$1.3942 (1802)

Comments:

- Overall open interest on the CALL options with the expiration date May, 4 is 22837 contracts, with the maximum number of contracts with strike price $1,4400 (3185);

- Overall open interest on the PUT options with the expiration date May, 4 is 23763 contracts, with the maximum number of contracts with strike price $1,3900 (2365);

- The ratio of PUT/CALL was 1.04 versus 1.22 from the previous trading day according to data from April, 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.