CFD Markets News and Forecasts — 10-04-2018

Major US stock indices rose significantly on Tuesday, which was due to the fading concerns about the increased tensions in US trade after Chinese President Xi Jinping promised to cut import tariffs.

Investors also estimated higher than expected data on producer prices for March. As the report of the US Department of Labor showed, the producer price index (CPI) in March grew by 0.3% over the previous month, adjusted for seasonal fluctuations. Without taking into account volatile prices for food and energy, prices in March rose by 0.3% compared to the previous month. Economists had expected that the overall index in March rose by 0.1%, while the base index increased by 0.2%. Compared to the same period of the previous year, the overall index rose in March by 3%, and the index excluding food and energy carriers - by 2.7% against the forecasted + 2.9% and + 2.6%, respectively.

Quotes of oil jumped by about 3.7% on Tuesday, on the way to the largest two-day rally in almost a month, as investors became more confident that a brewing trade dispute between the US and China could be resolved without damage to the global economy.

Almost all components of the DOW index finished trading in positive territory (29 out of 30). The leader of growth was the shares of The Boeing Company (BA, + 3.76%). Outsider were the shares of NIKE, Inc. (NKE, -0.28%).

Almost all sectors of S & P recorded a rise. The commodity sector grew most (+ 3.0%). The decrease was shown only by the utilities sector (-0.4%).

At closing:

Dow 24,407.86 +428.76 +1.79%

S&P 500 2,656.85 +43.69 +1.67%

Nasdaq 100 7,094.30 +143.96 +2.07%

U.S. stock-index futures surged on Tuesday, as a conciliatory tone of the statement of China's President Xi Jinping at the Boao Forum for Asia helped soothe investor worries about escalating U.S.-China trade tensions. In his speech, the PRC's leader announced plans to further open up the Chinese economy, including lowering import tariffs for automobiles and other products, enforcing the legal intellectual property of foreign companies and improving the investment environment for international companies.

Global Stocks:

Canadian municipalities issued $8.2 billion in building permits in February (-2.6%), following a 5.2% gain in January. Single-family homes as well as the commercial and institutional components saw lower levels of construction intentions in February.

The value of permits for single-family dwellings decreased 1.6% (-$41.3 million) in February, largely due to Ontario where intentions fell 6.9% (-$84.2 million) compared with January. The census metropolitan areas (CMAs) of Toronto (-13.6% or -$67.1 million) and Oshawa (-64.7% or -$65.7 million) posted the largest declines.

The Producer Price Index for final demand advanced 0.3 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.2 percent in February and 0.4 percent in January. On an unadjusted basis, the final demand index increased 3.0 percent for the 12 months ended in March.
In March, 70 percent of the rise in the final demand index is attributable to a 0.3-percent advance in prices for final demand services. The index for final demand goods also climbed 0.3 percent.
The index for final demand less foods, energy, and trade services rose 0.4 percent in March, the same as in both February and January. For the 12 months ended in March, prices for final demand less foods, energy, and trade services increased 2.9 percent, the largest advance since 12-month percent change data were available in August 2014.

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

Tesla (TSLA) initiated with a Sell at Vertical Group; target $84

Exxon Mobil (XOM) added to US 1 List at BofA/Merrill

The trend in housing starts was 226,842 units in March 2018, compared to 225,804 units in February 2018, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

"In March, the national trend in housing starts was stable for the fifth consecutive month, as diverging trends for multi-unit and single-detached dwellings continue to offset each other," said Bob Dugan, CMHC's chief economist. "Over this period, multi-unit starts have trended higher in most major urban centres while single-detached starts have trended lower."

• Strong case for making, on a periodic basis, comprehensive and transparent assessments of distributional impact of monetary policy

On the contrary, it bounced back in the whole industry (+1.2% after −1.8%).

Output decreased over the last three months in the manufacturing industry (−0.7%) as well as in the overall industry (−0.4%).

Output went down in "other manufacturing" (−1.2%), in the manufacture of transport equipment (−0.8%) and in the manufacture of food products and beverages (−0.7%). Conversely, it increased in mining and quarrying, energy, water supply (+1.8%), in the manufacture of machinery and equipment goods (+1.0%) and in the manufacture of coke and refined petroleum products (+1.3%).

• Says unclear if import price inflation will fade as fast as boe forecasts

• Any numerical guidance on UK interest rate outlook would be too open to misinterpretation and error

• Says brexit uncertainty hampering longer-term investment, but not shorter-term projects or exports

• The new normal for monetary policy is characterised by longer lags in inflation pressures

• The ECB framework is well equipped to cope with evolving inflation debate

• Must normalise policy not too soon but not too late

EUR/USD

Resistance levels (open interest**, contracts)

$1.2476 (4003)

$1.2432 (1394)

$1.2394 (235)

Price at time of writing this review: $1.2315

Support levels (open interest**, contracts):

$1.2251 (3741)

$1.2216 (4239)

$1.2177 (3362)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date May, 4 is 74826 contracts (according to data from April, 9) with the maximum number of contracts with strike price $1,2250 (4239);

GBP/USD

Resistance levels (open interest**, contracts)

$1.4289 (2113)

$1.4243 (2019)

$1.4203 (883)

Price at time of writing this review: $1.4145

Support levels (open interest**, contracts):

$1.4084 (865)

$1.4030 (1045)

$1.3996 (1708)

Comments:

- Overall open interest on the CALL options with the expiration date May, 4 is 22982 contracts, with the maximum number of contracts with strike price $1,4400 (3184);

- Overall open interest on the PUT options with the expiration date May, 4 is 23731 contracts, with the maximum number of contracts with strike price $1,3900 (2366);

- The ratio of PUT/CALL was 1.03 versus 1.04 from the previous trading day according to data from April, 9

* - 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.

• Hope developed countries to remove barriers on high-tech exports

• Will raise foreign ownership limits in autos sector

• Says China will not pursue forced deals under its belt and road initiative

• China will expand opening of its economy

• Globalisation should be more inclusive

• World should promote free trade

• Will carry out reforms to the end, break vested interests

• Globalisation is irreversible trend