CFD Markets News and Forecasts — 17-01-2018

(index / closing price / change items /% change)

Nikkei -83.47 23868.34 -0.35%

TOPIX -3.43 1890.82 -0.18%

Hang Seng +78.66 31983.41 +0.25%

CSI 300 -10.35 4248.12 -0.24%

Euro Stoxx 50 -9.23 3612.78 -0.25%

FTSE 100 -30.50 7725.43 -0.39%

DAX -62.37 13183.96 -0.47%

CAC 40 -19.83 5493.99 -0.36%

DJIA +322.79 26115.65 +1.25%

S&P 500 +26.14 2802.56 +0.94%

NASDAQ +74.60 7298.28 +1.03%

S&P/TSX +27.82 16326.70 +0.17%

(pare/closed(GMT +3)/change, %)

EUR/USD $1,2184 -0,62%

GBP/USD $1,3827 +0,26%

USD/CHF Chf0,96525 +0,61%

USD/JPY Y111,29 +0,75%

EUR/JPY Y135,60 +0,12%

GBP/JPY Y153,886 +1,01%

AUD/USD $0,7969 +0,11%

NZD/USD $0,7270 +0,07%

USD/CAD C$1,24333 -0,01%

00:00 Australia Consumer Inflation Expectation January 3.7%

00:30 Australia Changing the number of employed December 61.6 9

00:30 Australia Unemployment rate December 5.4% 5.4%

04:30 Japan Industrial Production (YoY) (Finally) November 5.9% 3.7%

04:30 Japan Industrial Production (MoM) (Finally) November 0.5% 0.6%

07:00 China NBS Press Conference

07:00 China Fixed Asset Investment December 7.2% 7.1%

07:00 China Retail Sales y/y December 10.2% 10.1%

07:00 China Industrial Production y/y December 6.1% 6%

07:00 China GDP y/y Quarter IV 6.8% 6.7%

08:00 Germany German Buba President Weidmann Speaks

13:30 U.S. Continuing Jobless Claims January 1867 1900

13:30 U.S. Housing Starts December 1.297 1.275

13:30 U.S. Building Permits December 1.298 1.29

13:30 U.S. Philadelphia Fed Manufacturing Survey January 26.2 25.0

13:30 U.S. Initial Jobless Claims January 261 250

14:30 Eurozone ECB's Benoit Coeure Speaks

16:00 U.S. Crude Oil Inventories January -4.948 -3.588

21:30 New Zealand Business NZ PMI December 57.7

Major US stock indices rose strongly, while the DJIA index closed for the first time above 26,000, helped by a rise in the price of shares of technological and industrial companies. Meanwhile, further increases were limited to losses of General Electric Company and The Goldman Sachs Group.

The focus was also on the United States. The Fed said industrial production rose 0.9 percent in December, helped by sustained growth in the mining industry following a revised 0.1 percent decline in November. Economists predicted that industrial production will grow by 0.3 percent after a 0.2 percent growth was registered in November. Industrial production grew at an annualized rate of 8.2 percent in the fourth quarter, which was the largest increase since the second quarter of 2010. For the whole of 2017, the volume of industrial production grew by 1.8 percent, which is the first and largest increase since 2014. The growth of the industrial sector is facilitated by the strengthening of the global economy and the weakening of the dollar, which helps make US exports more competitive than the country's main trading partners.

Meanwhile, the confidence of builders in the market of newly built houses for a single family fell by 2 points to a level of 72 in January, showed the housing market index (HMI) from the National Association of Housing Owners / Wells Fargo. "The builders are confident that changes in the tax code will promote the development of small businesses and lead to wider economic growth," said NAHB chairman Randy Noel. - Our participants are very happy about what awaits them ahead. However, they still face rising prices for materials and a shortage of labor and plots.

Almost all components of the DOW index finished trading in positive territory (25 out of 30). The leader of growth was the shares of The Boeing Company (BA, 4.85%). Outsider were shares of General Electric Company (GE, -4.91%).

All sectors of the S & P index recorded an increase. The technological sector grew most (+ 1.2%).

At closing:

DJIA + 1.25% 26,115.65 +322.79

Nasdaq + 1.03% 7,298.28 +74.59

S & P + 0.94% 2,802.56 +26.14

• Consumption, residential investment have been stronger than anticipated; expected to contribute less to growth going forward

• Benefits of higher commodity prices being diluted by wider spreads between benchmark world, canadian oil prices

• Core inflation measures have edged up, consistent with diminishing slack in economy

• Labor market slack being absorbed more quickly than anticipated; wages still rising by less than typical

• Raises 2018 average annual inflation forecast to 2.0 pct from 1.7 pct, holds 2019 at 2.1 pct

• Holds q4 growth forecast at 2.5 pct, sees q1 growth 2.5 pct; raises 2018 to 2.2 pct from 2.1 pct, 2019 to 1.6 pct from 1.5 pct

• Uncertainty about future of NAFTA "weighing increasingly" on the outlook; trade-policy uncertainty to reduce level of business investment by 2 pct by end-2019

• BoC sees small benefit to Canada from stronger U.S. demand due to recent tax changes

"The Bank of Canada today increased its target for the overnight rate to 1 1/4 per cent. The Bank Rate is correspondingly 1 1/2 per cent and the deposit rate is 1 per cent. Recent data have been strong, inflation is close to target, and the economy is operating roughly at capacity. However, uncertainty surrounding the future of the North American Free Trade Agreement (NAFTA) is clouding the economic outlook.

The global economy continues to strengthen, with growth expected to average 3 1/2 per cent over the projection horizon. Growth in advanced economies is projected to be stronger than in the Bank's October Monetary Policy Report (MPR). In particular, there are signs of increasing momentum in the US economy, which will be boosted further by recent tax changes. Global commodity prices are higher, although the benefits to Canada are being diluted by wider spreads between benchmark world and Canadian oil prices.

In Canada, real GDP growth is expected to slow to 2.2 per cent in 2018 and 1.6 per cent in 2019, following an estimated 3.0 per cent in 2017. Growth is expected to remain above potential through the first quarter of 2018 and then slow to a rate close to potential for the rest of the projection horizon."

Revisions to mining and utilities altered the pattern of growth for October and November, but the level of the overall index in November was little changed. For the fourth quarter as a whole, total industrial production jumped 8.2 percent at an annual rate after being held down in the third quarter by Hurricanes Harvey and Irma. At 107.5 percent of its 2012 average, the index has increased 3.6 percent since December 2016 for its largest calendar-year gain since 2010.

The gain in manufacturing output in December was its fourth consecutive monthly increase. The output of utilities advanced 5.6 percent for the month, while the index for mining moved up 1.6 percent. Capacity utilization for the industrial sector was 77.9 percent, a rate that is 2.0 percentage points below its long-run (1972-2016) average.

U.S. stock-index futures rose on Wednesday as investors assessed fourth-quarter earnings from Bank of America (BAC) and Goldman Sachs (GS).

Global Stocks:

Nikkei 23,868.34 -83.47 -0.35%

Hang Seng 31,983.41 +78.66 +0.25%

Shanghai 3,445.36 +8.76 +0.26%

S&P/ASX 6,015.80 -32.80 -0.54%

FTSE 7,738.09 -17.84 -0.23%

CAC 5,507.33 -6.49 -0.12%

DAX 13,209.47 -36.86 -0.28%

Crude $63.66 (-0.11%)

Gold $1,336.60 (-0.04%)

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

Deere (DE) target raised to $184 from $161 at Stifel

UnitedHealth (UNH) target raised to $268 from $235 at Citigroup

Merck (MRK) target raised to $72 from $68 at BMO Capital Markets

Apple (AAPL) downgraded to Neutral from Buy at Longbow

HP (HPQ) downgraded to Equal Weight at Barclays

Citigroup (C) downgraded to Mkt Perform from Outperform at Keefe Bruyette

IBM(IBM) upgraded to Overweight at Barclays

Wal-Mart (WMT) added to US Focus List at Citigroup; Buy, target $117

Goldman Sachs (GS) reported Q4 FY 2017 earnings of $5.68 per share (versus $5.08 in Q4 FY 2016), beating analysts' consensus estimate of $4.95.

The company's quarterly revenues amounted to $7.830 bln (-4.2% y/y), beating analysts' consensus estimate of $7.638 bln.

GS fell to $256.10 (-0.91%) in pre-market trading.

Bank of America (BAC) reported Q4 FY 2017 earnings of $0.47 per share (versus $0.40 in Q4 FY 2016), beating analysts' consensus estimate of $0.45.

The company's quarterly revenues amounted to $20.687 bln (+3.5% y/y), missing analysts' consensus estimate of $21.605 bln.

BAC rose to $31.36 (+0.38%) in pre-market trading.

AUD/JPY on daily time frame chart we can see that the price has broken a downside trend line and a resistance level which the price has already shown some difficulty in breakthrough that zone.

After the breakout of the trend line and the resistance level the price starts a new bullish movement.

Therefore, our bias on this pair remains - long

• Some lenders' boards do not receive enough information to judge consumer lending quality is worsening

• Says will consider following up adequacy of lenders' credit risk monitoring in late 2018

• UK motor finance lenders have adopted a "reasonably prudent" approach to future value of 2nd-hand cars

Euro area annual inflation was 1.4% in December 2017, down from 1.5% in November. In December 2016, the rate was 1.1%. European Union annual inflation was 1.7% in December 2017, down from 1.8% in November. A year earlier the rate was 1.2%. These figures come from Eurostat, the statistical office of the European Union.

The lowest annual rates were registered in Cyprus (-0.4%), Ireland and Finland (both 0.5%) and Denmark (0.8%). The highest annual rates were recorded in Lithuania and Estonia (both 3.8%) and the United Kingdom (3.0%). Compared with November 2017, annual inflation fell in twenty-three Member States, remained stable in four and rose in one.

The largest upward impacts to the euro area annual inflation came from fuels for transport (+0.11 percentage points), tobacco (+0.06 pp) and milk, cheese & eggs (+0.05 pp), while telecommunication (-0.10 pp), garments and vegetables (-0.05 pp each) had the biggest downward impacts.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2362 (4074)

$1.2338 (5553)

$1.2320 (3098)

Price at time of writing this review: $1.2231

Support levels (open interest**, contracts):

$1.2154 (1392)

$1.2118 (1752)

$1.2078 (2052)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 9 is 102999 contracts (according to data from January, 16) with the maximum number of contracts with strike price $1,2100 (5553);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3893 (3003)

$1.3863 (2366)

$1.3844 (2053)

Price at time of writing this review: $1.3773

Support levels (open interest**, contracts):

$1.3677 (494)

$1.3644 (208)

$1.3608 (700)

Comments:

- Overall open interest on the CALL options with the expiration date February, 9 is 31794 contracts, with the maximum number of contracts with strike price $1,3600 (3488);

- Overall open interest on the PUT options with the expiration date February, 9 is 27202 contracts, with the maximum number of contracts with strike price $1,3500 (3040);

- The ratio of PUT/CALL was 0.86 versus 0.88 from the previous trading day according to data from January, 16

* - 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.

• There are no differences between U.S. and South Korea over how to deal with North Korea

• Would keep ESM as it is, no reasons to modify institutional situation and create a new entity, reducing role of commission

• Not heard convincing arguments in favour of transforming ESM into so-called european monetary fund

British blue-chip stocks finished lower Tuesday, pulled down in part by a fall in shares of BP PLC after the energy heavyweight said it will take a $1.7 billion charge related to the Deepwater Horizon disaster. A selloff for miners also weighed on the main equity benchmark.

The Dow Jones Industrial Average closed marginally lower on Tuesday after the blue-chip index relinquished all its early gains in the sharpest daily reversal in nearly two years, according to FactSet. In early trade, Dow industrials were up more than 1% and set an intraday all-time high above 26,000.

Asian stocks were mostly lower Wednesday following a late selloff in U.S. equities and after some markets logged fresh highs Tuesday. Hong Kong's Hang Seng Index topped 2007's record-high close on Tuesday while Singapore's main stock index breached 2015's high, getting to levels last seen in 2007.