CFD Markets News and Forecasts — 09-06-2017

Total inventories of merchant wholesalers, except manufacturers' sales branches and offices, after adjustment for seasonal variations but not for price changes, were $591.0 billion at the end of April, down 0.5 percent (±0.2 percent) from the revised March level. Total inventories were up 1.6 percent (±1.1 percent) from the revised April 2016 level. The March 2017 to April 2017 percent change was revised from the advance estimate of down 0.3 percent (±0.4 percent)* to down 0.5 percent (± 0.2 percent).

The April inventories/sales ratio for merchant wholesalers, except manufacturers' sales branches and offices, based on seasonally adjusted data, was 1.28. The April 2016 ratio was 1.35.

EUR/USD: 1.1050-60 (EUR 2.1bln) 1.1080 (360m) 1.1100 (1.1bln) 1.1130 (826m) 111.50-60 (2.65bln) 1.1180 (1.25bln) 1.1200 (1.6bln) 1.1215-25 (2.2bln) 1.1250 (4.1bln) 1.1280 (765m) 1.1300 (1.3bln)

USD/JPY: 108.15 (USD 585m) 110.00 (2.1bln) 110.25 (360m) 110.40-50 (445m) 111.00 (302m)

GBP/USD: 1.2600 (GBP 268m) 1.2630 (206m) 1.2650-55 (381m) 1.2700 (226m) 1.2750 (367m) 1.2800 (216m) 1.2850 (349m) 1.2900 (241m)

EUR/GBP: 0.8600 (EUR 280m) 0.8750 (507m) 0.8850 (429m)

AUD/USD: 0.7450 (AUD 246m) 0.7500 (300m)

USD/CAD: 1.3450 (USD 230m) 1.3480 (400m) 1.3490-1.3500 (566m) 1.3530 (438m)

EUR/JPY: 122.50 (EUR 1.19bln)

U.S. stock-index futures were flat as investors eyed results of the UK general elections.

Stocks:

Nikkei 20,013.26 +104.00 +0.52%

Hang Seng 26,030.29 -32.77 -0.13%

Shanghai 3,158.75 +8.41 +0.27%

S&P/ASX 5,677.80 +1.21 +0.02%

FTSE 7,492.68 +42.70 +0.57%

CAC 5,286.47 +22.23 +0.42%

DAX 12,764.48 +50.90 +0.40%

Crude $45.57 (-0.15%)

Gold $1,273.50 (-0.47%)

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

McDonald's (MCD) initiated with a Buy at Mizuho

Yahoo! (YHOO) target raised to $70 from $58 at BofA/Merrill

Citigroup (C) upgraded to Neutral from Sell at UBS

Canadian industries operated at 83.3% of their production capacity in the first quarter, up from 81.8% in the previous quarter and the highest level since the third quarter of 2007.

Increases in capacity utilization in manufacturing, construction, and mining and quarrying more than offset the declines in oil and gas extraction and forestry and logging. Capacity utilization in electric power generation, transmission and distribution were unchanged.

The manufacturing industry drove the increase in the capacity utilization rate in the first quarter, operating at 83.4% of its capacity, up 1.5 percentage points from the previous quarter. The fabricated metal product manufacturing and food manufacturing industries were the primarily sources of that growth.

The capacity utilization rate rose in 15 of the 21 major manufacturing industries, representing approximately 80% of the gross domestic product in the manufacturing industry.

Employment rose by 55,000 in May, spurred by an increase in full-time work (+77,000). At the same time, the unemployment rate rose by 0.1 percentage points to 6.6%, the result of more people participating in the labour market. The employment increase in May builds on gains since July 2016, when the current upward trend began.

Compared with 12 months earlier, there were 317,000 (+1.8%) more people employed, mostly the result of increases in full-time work. Over the same period, the total number of hours worked rose 0.7%.

In May, employment increased among youth aged 15 to 24 and men aged 25 to 54. At the same time, employment held steady for women aged 25 to 54 and people 55 years of age and older.

Employment rose in Ontario, British Columbia, Manitoba and Prince Edward Island. There was little change in the other provinces.

In May, employment increased in several industries, led by professional, scientific and technical services as well as manufacturing. There were smaller increases in transportation and warehousing; wholesale and retail trade; as well as health care and social assistance. In contrast, fewer people worked in finance, insurance, real estate, rental and leasing; information, culture and recreation; and public administration.

EUR/USD

Offers: 1.1270 1.1285 1.1300 1.1320 1.1335 1.1350 1.1380 1.1400

Bids: 1.1225-30 1.1200 1.1180 1.1150 1.1120 1.1100

GBP/USD

Offers: 1.2750-60 1.2780 1.2800 1.2830 1.2850 1.2870 1.2900

Bids: 1.2700 1.2680 1.2650 1.2630 1.2600-10 1.2580 1.2550 1.2500

EUR/JPY

Offers: 123.80 124.00 124.50 124.80 125.00

Bids: 122.30 122.00 121.85 121.65 121.50 121.00

EUR/GBP

Offers: 0.8800 0.8830 0.8850-60 0.8885 0.8900

Bids: 0.8750 0.8730 0.8700 0.8680 0.8665 0.8650

USD/JPY

Offers: 110.50 110.80 111.00 111.30 111.50 111.80 112.00

Bids: 110.00 109.80-85 109.65 109.50 109.35 109.20 109.00

AUD/USD

Offers: 0.7550 0.7580 0.7600 0.7630 0.7650

Bids: 0.7520 0.7500-05 0.7480-85 0.7465 0.7450

• Says UK election indicates that there is no strong mandate to proceed with a hard Brexit

Output in the construction industry fell 0.6% in the 3 month on 3 month time series; driven mainly by a 0.9% fall in all new work, representing the first 3 month on 3 month fall in construction output since September 2016.

Construction output also fell month-on-month in April 2017, dropping 1.6%; driven by falls in both repair and maintenance, and all new work.

The fall in all new work in April 2017 was somewhat offset by a sizeable rise in infrastructure, which grew by 5.7% compared with March 2017.

Construction output for Quarter 1 (Jan to Mar) 2017 has been revised up, from 0.2% to 1.1%; this will lead to a 0.05 percentage point revision to gross domestic product (GDP), all else equal.

New orders increased by 0.7% in Quarter 1 2017, following 2 quarters of decline. This increase was driven by rises in both private housing and private commercial work.

Between the 3 months to January 2017 and the 3 months to April 2017, the total trade deficit (goods and services) widened by £1.7 billion to £8.6 billion; this followed a narrowing in the 3 months to January 2017 and is mainly due to increased imports in March 2017.

At the commodity level, the main causes of the widening of the deficit in the 3 months to April 2017 were increased imports of aircraft, cars and chemicals; however, there was a fall in exports of services during the period.

The UK's total trade deficit (goods and services) narrowed by £1.8 billion between March and April 2017 to £2.1 billion, following a widening in March 2017; this reflects a decrease in imports of goods on the month, with import levels of total trade moving back to the levels seen in February 2017.

In the 3 months to April 2017 compared with the 3 months to January 2017, the Index of Production was estimated to have decreased by 1.2%, due mainly to falls of 5.8% in energy supply and 0.7% in manufacturing.

The highly volatile pharmaceuticals sector fell by a record 11.9% and provided the largest downward pressure on manufacturing, following an increase of 10.1% in the 3 months to January 2017.

In the 3 months to April 2017 compared with the same 3 months a year ago, the Index of Production increased by 1.0%, this was due mainly to a rise of 1.7% in manufacturing, which was largely due to transport equipment along with broad-based upwards contributions from most manufacturing industries.

In April 2017, total production was estimated to have increased by 0.2% compared with March 2017, due to rises of 2.9% in energy supply and 0.2% in manufacturing. Transport equipment provided the largest contribution to the manufacturing increase followed by pharmaceuticals.

EUR/USD: 1.1050-60 (EUR 2.1bln) 1.1080 (360m) 1.1100 (1.1bln) 1.1130 (826m) 111.50-60 (2.65bln) 1.1180 (1.25bln) 1.1200 (1.6bln) 1.1215-25 (2.2bln) 1.1250 (4.1bln) 1.1280 (765m) 1.1300 (1.3bln)

USD/JPY: 108.15 (USD 585m) 110.00 (2.1bln) 110.25 (360m) 110.40-50 (445m) 111.00 (302m)

GBP/USD: 1.2600 (GBP 268m) 1.2630 (206m) 1.2650-55 (381m) 1.2700 (226m) 1.2750 (367m) 1.2800 (216m) 1.2850 (349m) 1.2900 (241m)

EUR/GBP: 0.8600 (EUR 280m) 0.8750 (507m) 0.8850 (429m)

AUD/USD: 0.7450 (AUD 246m) 0.7500 (300m)

USD/CAD: 1.3450 (USD 230m) 1.3480 (400m) 1.3490-1.3500 (566m) 1.3530 (438m)

EUR/JPY 122.50 (EUR 1.19bln)

In April 2017, output slipped back in the manufacturing industry (−1.2% after +2.8% in March), and, to a lesser extent, in the whole industry (−0.5% after +2.2%).

Manufacturing output remained virtually stable over the last three months in the manufacturing industry (−0.1%). It decreased in the overall industry (−0.7%).

Output decreased markedly in mining and quarrying, energy, water supply (−4.9%) and in the manufacture of transport equipment (−1.6%). It tumbled in the manufacture of coke and refined petroleum products (−10.9%). Conversely, it grew in the manufacture of food products and beverages (+0.7%). It was virtually stable in "other manufacturing" (+0.1%) and in the manufacture of machinery and equipment goods (+0.1%).

Germany exported goods to the value of 101.0 billion euros and imported goods to the value of 83.0 billion euros in April 2017. Based on provisional data, the Federal Statistical Office (Destatis) also reports that German exports declined by 2.9%, while imports increased by 5.4% in April 2017 year on year. After calendar and seasonal adjustment, exports were up 0.9% and imports 1.2% compared with March 2017.

The foreign trade balance showed a surplus of 18.1 billion euros in April 2017. In April 2016, the surplus amounted to 25.3 billion euros. In calendar and seasonally adjusted terms, the foreign trade balance recorded a surplus of 19.8 billion euros in April 2017.

According to provisional results of the Deutsche Bundesbank, the current account of the balance of payments showed a surplus of 15.1 billion euros in April 2017, which takes into account the balances of trade in goods including supplementary trade items (+20.6 billion euros), services (-1.2 billion euros), primary income (+4.0 billion euros) and secondary income (-8.3 billion euros). In April 2016, the German current account showed a surplus of 28.1 billion euros.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1305 (5385)

$1.1265 (4192)

$1.1240 (5428)

Price at time of writing this review: $1.1208

Support levels (open interest**, contracts):

$1.1188 (4122)

$1.1146 (3165)

$1.1098 (3138)

Comments:

- Overall open interest on the CALL options with the expiration date June, 9 is 81815 contracts, with the maximum number of contracts with strike price $1,1000 (5894);

- Overall open interest on the PUT options with the expiration date June, 9 is 108710 contracts, with the maximum number of contracts with strike price $1,0700 (5437);

- The ratio of PUT/CALL was 1.33 versus 1.31 from the previous trading day according to data from June, 8

GBP/USD

Resistance levels (open interest**, contracts)

$1.3005 (3802)

$1.2911 (2807)

$1.2819 (1949)

Price at time of writing this review: $1.2680

Support levels (open interest**, contracts):

$1.2598 (1821)

$1.2499 (2489)

$1.2399 (1445)

Comments:

- Overall open interest on the CALL options with the expiration date June, 9 is 39107 contracts, with the maximum number of contracts with strike price $1,3000 (3802);

- Overall open interest on the PUT options with the expiration date June, 9 is 51879 contracts, with the maximum number of contracts with strike price $1,2700 (7028);

- The ratio of PUT/CALL was 1.33 versus 1.32 from the previous trading day according to data from June, 8

* - 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.

European stocks tilted lower at the end of trade Thursday, as investors assessed the European Central Bank's policy stance while they waited for results from the U.K.'s general election. Most major regional indexes darted in and out of positive territory during the day. Overall, utility, financial and basic material shares fared the best, while consumer-related, telecom and health care stocks fell.

U.S. stocks notched meager gains Thursday, but the Nasdaq closed at a record after former FBI Director James Comey's appearance in front of the U.S. Senate Intelligence Committee concluded without any significant revelations.

Asian stocks started Friday trading mixed, in a wait-and-see mode as exit polls suggested the U.K.'s governing Conservative party failed to keep its parliamentary majority in Thursday's general election there. The polls sent the pound down some 2% versus other currencies, but moves in other markets have been muted. S&P 500 futures were recently down 0.1%.