CFD Markets News and Forecasts — 16-06-2017

The modest early June drop of 2.6 points in the Sentiment Index masks a much larger decline since June 8th. Prior to that date the Sentiment Index had averaged 97.7, but since June 8th, the Index fell to 86.7, a decline of 11.0 points. While this break corresponds with James Comey's testimony, only a few consumers spontaneously referred to him or his testimony when asked to explain their views.

Importantly, the decline was observed across all political parties, but the loss in confidence among self-identified Republicans since June 8th was larger than among Democrats (9.2 vs. 6.8 Index-points), with Independents showing the greatest falloff (11.5 Index-points).

EURUSD: 1.1000 (730m) 1.1050 (1.9bln) 1.1080 (1.8bln) 1.1100 (1.9bln) 1.1130-40 (630m) 1.1150 (1.95bln) 1.1200 (3.3bln) 1.1250 (3.2bln) 1.1300 (2.72bln)

USDJPY: 109.80 (USD 400m) 110.00 (7.7bln) 110.50-60 (1.4bln) 110.80 (400m) 111.00 (285m) 111.50 (400m) 112.00 (3.3bln)

GFBPUSD: 1.2600 (GBP 689m) 1.2700 (664m) 1.2740-50 (891m) 1.2770 (270m)

USDCHF: 0.9700 (USD 479m)

AUDUSD: 0.7400 (AUD 375m) 0.7500 (625m) 0.7550-60 (470m) 0.7600-10 (501m) 0.7700 (250m)

USDCAD: 1.3250 (790m) 1.3270 (215m) 1.3300 (860m) 1.3350 (370m)

NZDUSD: 0.7100 (NZD 430m) 0.7300 (211m)

EURJPY: 123.00 (676m) 123.50 (195m)

U.S. stock-index futures were little changed after the stock recorded losses at the previous session, due to resumption of selling in the tech sector. Investors analyzed statistics on the U.S. housing market.

Stocks:

Nikkei 19,943.26 +111.44 +0.56%

Hang Seng 25,626.49 +61.15 +0.24%

Shanghai 3,122.86 -9.62 -0.31%

S&P/ASX 5,774.03 +10.84 +0.19%

FTSE 7,458.79 +39.43 +0.53%

CAC 5,251.43 +34.55 +0.66%

DAX 12,721.60 +29.79 +0.23%

Crude $44.86 (+0.90%)

Gold $1,256.20 (+0.13%)

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

Intel (INTC) resumed with an Underperform at Raymond James

NIKE (NKE) downgraded to Neutral from Overweight at JP Morgan

Foreign investment in Canadian securities totalled $10.6 billion in April, mainly acquisitions of government debt instruments. At the same time, Canadian investors reduced their holdings of foreign securities by $9.9 billion, the largest divestment since January 2016.

As a result, Canada's international transactions in securities generated a net inflow of funds into the Canadian economy of $20.5 billion in April.

Foreign investment in Canadian securities has exceeded Canadian investment in foreign securities by $49.1 billion since the beginning of 2017, following a record annual net inflow of $151.9 billion in 2016. Significant foreign purchases of Canadian private corporate instruments led the inflow of funds during this period.

Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,168,000. This is 4.9 percent (±0.9 percent) below the revised April rate of 1,228,000 and is 0.8 percent (±1.1 percent)* below the May 2016 rate of 1,178,000. Single-family authorizations in May were at a rate of 779,000; this is 1.9 percent (±1.0 percent) below the revised April figure of 794,000. Authorizations of units in buildings with five units or more were at a rate of 358,000 in May.

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,092,000. This is 5.5 percent (±11.9 percent)* below the revised April estimate of 1,156,000 and is 2.4 percent (±11.4 percent)* below the May 2016 rate of 1,119,000. Single-family housing starts in May were at a rate of 794,000; this is 3.9 percent (±10.4 percent)* below the revised April figure of 826,000. The May rate for units in buildings with five units or more was 284,000.

EUR/USD

Offers: 1.1185 1.1200 1.1230 1.1250 1.1270 1.1285 1.1300

Bids: 1.1150 1.1130 1.1100 1.1080 1.1050 1.1030 1.1000

GBP/USD

Offers: 1.2800-10 1.2830 1.2850 1.2880 1.2900 1.2960 1.3000

Bids: 1.2750 1.2730 1.2700 1.2680 1.2650 1.2630 1.2600-10

EUR/JPY

Offers: 123.30 123.50 123.80 124.00 124.50

Bids: 122.80 122.50 122.30 122.00 121.50

EUR/GBP

Offers: 0.8750 0.8780 0.8800 0.8820-25 0.8850-55

Bids: 0.8720 0.8700 0.8685 0.8650 0.8630 0.8600

USD/JPY

Offers: 111.50 111.65 111.80 112.00 112.30 112.50 112.80 113.00

Bids: 111.00 110.80 110.50 110.30 110.00 109.80 109.50 109.20 109.00

AUD/USD

Offers: 0.7620 0.7635 0.7650 0.7680 0.7700 0.7750

Bids: 0.7580 0.7565 0.7550 0.7530 0.7500-05

• Says business interests and sanctions should not be mixed

• Eu 27 are ready for Brexit negotiations and Germany expects them to start as planned

• Eurogroup deal could help Greece become more competitive and able to stand on its own feet

Euro area annual inflation was 1.4% in May 2017, down from 1.9% in April. In May 2016 the rate was -0.1%. European Union annual inflation was 1.6% in May 2017, down from 2.0% in April. A year earlier the rate was -0.1%. These figures come from Eurostat, the statistical office of the European Union. In May 2017, the lowest annual rates were registered in Ireland (0.0%), Romania (0.5%), Denmark and the Netherlands (both 0.7%). The highest annual rates were recorded in Estonia (3.5%), Lithuania (3.2%) and the United Kingdom (2.9%). Compared with April 2017, annual inflation fell in twenty-four Member States, remained stable in one and rose in three.

EURUSD: 1.1000 (730m) 1.1050 (1.9bln) 1.1080 (1.8bln) 1.1100 (1.9bln) 1.1130-40 (630m) 1.1150 (1.95bln) 1.1200 (3.3bln) 1.1250 (3.2bln) 1.1300 (2.72bln)

USDJPY: 109.80 (USD 400m) 110.00 (7.7bln) 110.50-60 (1.4bln) 110.80 (400m) 111.00 (285m) 111.50 (400m) 112.00 (3.3bln)

GFBPUSD: 1.2600 (GBP 689m) 1.2700 (664m) 1.2740-50 (891m) 1.2770 (270m)

USDCHF: 0.9700 (USD 479m)

AUDUSD: 0.7400 (AUD 375m) 0.7500 (625m) 0.7550-60 (470m) 0.7600-10 (501m) 0.7700 (250m)

USDCAD: 1.3250 (790m) 1.3270 (215m) 1.3300 (860m) 1.3350 (370m)

NZDUSD: 0.7100 (NZD 430m) 0.7300 (211m)

EURJPY: 123.00 (676m) 123.50 (195m)

• Temptation to row back on financial reforms is very dangerous, situation in U.S. is "worrying"

• This position is shared by Germany, Netherlands and the European Commission

• An output floor at 75 pct is unacceptable because it means standard model would become a constraint for half of international banks

• Taking time to end deflation mindset in Japan

• Job market has tightened further, which is clearly putting pressure on wages

• Rising wages will lead to higher selling prices, service prices

• We will adjust monetary policy as needed in order to maintain momentum towards 2 pct price target

• It's true that prices are not rising in Japan despite improving output gap

• Trump will change new policy when Cuba permits free and fair elections and releases political prisoners

• Will continue to allow americans who are allowed to travel to Cuba to bring back goods like cuban cigars for personal use

"At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided upon the following.

(1) Yield curve control:

The Bank decided, by a 7-2 majority vote, to set the following guideline for market operations for the intermeeting period. The short-term policy interest rate: The Bank will apply a negative interest rate of minus 0.1 percent to the Policy-Rate Balances in current accounts held by financial institutions at the Bank. The long-term interest rate: The Bank will purchase Japanese government bonds (JGBs) so that 10-year JGB yields will remain at around zero percent. With regard to the amount of JGBs to be purchased, the Bank will conduct purchases at more or less the current pace -- an annual pace of increase in the amount outstanding of its JGB holdings of about 80 trillion yen -- aiming to achieve the target level of the long-term interest rate specified by the guideline. (

2) Guidelines for asset purchases

With regard to asset purchases other than JGB purchases, the Bank decided, by a 7-2 majority vote, to set the following guidelines. [Note 2] a) The Bank will purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at annual paces of about 6 trillion yen and about 90 billion yen, respectively. b) As for CP and corporate bonds, the Bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen, respectively".

EUR/USD

Resistance levels (open interest**, contracts)

$1.1305 (5385)

$1.1265 (4192)

$1.1240 (5428)

Price at time of writing this review: $1.1149

Support levels (open interest**, contracts):

$1.1098 (3138)

$1.1040 (1927)

$1.0999 (655)

Comments:

- Overall open interest on the CALL options with the expiration date July, 7 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 July, 7 is 108710 contracts, with the maximum number of contracts with strike price $1,0700 (5437);

- The ratio of PUT/CALL was 1.33 versus 1.33 from the previous trading day according to data from June, 15

GBP/USD

Resistance levels (open interest**, contracts)

$1.3005 (3802)

$1.2911 (2807)

$1.2819 (1949)

Price at time of writing this review: $1.2768

Support levels (open interest**, contracts):

$1.2699 (797)

$1.2598 (1821)

$1.2499 (2489)

Comments:

- Overall open interest on the CALL options with the expiration date July, 7 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 July, 7 is 51879 contracts, with the maximum number of contracts with strike price $1,2700 (7028);

- The ratio of PUT/CALL was 1.33 versus 1.33 from the previous trading day according to data from June, 15

* - 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 finished at their lowest level in nearly two months Thursday, rattled as investors questioned the U.S. Federal Reserve's outlook for monetary policy as signs of flagging consumer demand have cropped up.

U.S. stocks retreated Thursday as large-cap names in the technology sector extended losses, but major indexes finished off of their intraday lows. A more hawkish tone from the Federal Reserve on Wednesday continued to contribute to the cautious mood, as did reports that a special counsel was investigating whether President Donald Trump obstructed justice, inserting a new bit of political uncertainty into markets.

Equity markets across Asia moved higher on Friday, shrugging off technology-led declines overnight in the U.S., as a stronger U.S. dollar boosted export stocks in the region.