CFD Markets News and Forecasts — 20-09-2018

Major US stock indices have grown significantly, while the Dow and S & P 500 reached record highs amid hopes of investors that the US and China will be able to resolve the trade conflict and avoid a full-scale trade war

Attention was also drawn to the US data. As it became known, in August the Index of Leading Indicators (LEI) from the Conference Board for the USA increased by 0.4% to 111.2 after an increase of 0.7% in July. The leading economic index now significantly exceeds the previous peak (March 2006, 102.4).

"Leading indicators are consistent with a stable growth scenario in the second half of 2018 and at this stage of the maturing of the business cycle in the US, it's not much better than before," said Ataman Ozildirim, director of business cycles at the Conference Board. - The growth trend of the American LEI has softened since the beginning of the year. Industrial companies that are more sensitive to the business cycle should take into account the possible slowdown in economic growth in 2019. "

Oil futures moderately fell on Thursday after US President Trump called on OPEC to "cut prices now!", Which was slowed by the upward momentum that pushed the market to 4-year highs.

Almost all components of DOW have finished trades plus (28 of 30). The leader of growth was shares of Intel Corporation (INTC, + 2.26%). Outsider was the shares of The Home Depot, Inc. (HD, -0.14%).

All sectors of S & P recorded a rise. The consumer goods sector grew most (+ 1.1%).

At closing:

Dow 26,656.98 +251.22 +0.95%

S & P 500 2,930.75 +22.80 +0.78%

Nasdaq 100 8,028.23 +78.19 + 0.98%

It was another bullish day for the British Pound on Thursday and the GBPUSD pair rose to fresh two-month highs on Thursday as it was seen 0.65% stronger during the London session, changing hands at 1.3225.

Earlier in the day, retail sales came out above analysts' expectations, which helped sterling to accelerate higher. The yearly basis slowed from 3.8% to 3.3% (but above 2.3% expected), while the monthly change also weakened to 0.3% from 0.9% (but again above consensus of a -0.2% print).

Moreover, the ex-fuel indicators also decelerated, but managed to beat expectations. For some reason, investors focused on the "beating the consensus" part rather than on the "weakening" part and bought the pound afterward.

Later in the day, the usual Thursday's US jobless claims are due and are seen rising slightly, however, claims are still near 40-year lows so there should not be any elevated volatility afterward.

Finally, US existing home sales for the month of August will be released and the market expects a 0.3% monthly gain from 5.34 million houses annually to 5.35 million houses annually. Again, not a big deal for investors.

Wednesday's housing starts also improved, but more significantly, and rose 9.2% in August from 1.174 million new houses annually to 1.282 million new houses annually.

Sentiment remains positive for the GBPUSD pair and therefore we could see a continuation of this rally.

Existing-home sales subsided for the fourth straight month in July to their slowest pace in over two years, according to the National Association of Realtors. The West was the only major region with an increase in sales last month.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 0.7 percent to a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. With last month's decline, sales are now 1.5 percent below a year ago and have fallen on an annual basis for five straight months.

U.S. stock-index futures rose on Thursday, buoyed by a recovery in technology stocks.

Global Stocks:

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

Procter & Gamble (PG) initiated with Overweight at Atlantic Equities

Caterpillar (CAT) upgraded to Outperform from Neutral at Robert W. Baird

Employment in Canada increased by 13,600 jobs from July to August according to the August ADP Canada National Employment Report

"Job growth in August was relatively modest," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "Despite a pull back in natural resources and mining and the information industry, we saw strong growth in finance, construction, and manufacturing. For the first time in nearly six months the finance space added a substantial amount of jobs."

The July total of jobs added was revised up from 11,600 to 35,500.

Regional manufacturing activity continued to grow in September, according to results from this month's Manufacturing Business Outlook Survey. The survey's broad indicators for general activity, new orders, shipments, and employment remained positive and increased from their readings in August. The survey's respondents reported diminished price pressures this month. Expectations for the next six months remained optimistic, but most broad future indicators showed some moderation.

The diffusion index for current general activity increased 11 points this month to 22.9, returning the index to near its average reading for 2018.

In the week ending September 15, the advance figure for seasonally adjusted initial claims was 201,000, a decrease of 3,000 from the previous week's unrevised level of 204,000. This is the lowest level for initial claims since November 15, 1969 when it was 197,000. The 4-week moving average was 205,750, a decrease of 2,250 from the previous week's unrevised average of 208,000. This is the lowest level for this average since December 6, 1969 when it was 204,500.

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!"

The Organization for Economic Cooperation & Development, on Thursday, downgraded it global growth projections for both 2018 and 2019.

According to Interim Economic Outlook, released Thursday, the global economy will grow 3.7 percent each this year and next. In May, the OECD had projected 3.8 percent expansion for 2018 and 3.9 percent for 2019.

The United States will expand 2.9 percent in 2018 and 2.7 percent in 2019, the agency said. China's growth is seen at 6.7 percent this year and 6.4 percent in 2019.- via rttnews

Norges Bank's Executive Board has decided to raise the key policy rate by 0.25 percentage point to 0.75 percent. The upturn in the Norwegian economy continues. Spare capacity is gradually diminishing, and capacity utilisation now appears to be close to a normal level. Underlying inflation is close to the 2 percent inflation target. Overall, the outlook and the balance of risks imply a gradual interest rate increase in the years ahead. If the key policy rate is kept at the current level for too long, price and wage inflation may accelerate and financial imbalances build up further.

In August 2018, the quantity bought increased by 0.3% when compared with the previous month, with increases across all sectors except food, clothing and petrol.

The month-on-month growth rate in the quantity bought in food stores at negative 0.6% and clothing stores at negative 1.9% was offset by strong growth in other non-food stores at 2.8% and household goods stores at 4.5%.

In the three months to August, the quantity bought increased by 2% when compared with the previous three months, with continued growth across all sectors.

The last three months of summer from June to August 2018 saw an increase in the quantity bought at 3.4%, with food and household goods stores doing well in the warm weather when compared with the previous summer, while non-store retailing continued to show strong growth.

Spending online continued to increase to reach a new record proportion of all retailing at 18.2%; with strong growth in department stores also reaching a record proportion at 18.4%.

"The Swiss National Bank (SNB) is maintaining its expansionary monetary policy, thereby stabilising price developments and supporting economic activity. Interest on sight deposits at the SNB remains at -0.75% and the target range for the three-month Libor is unchanged at between -1.25% and -0.25%. The SNB will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration. Since the monetary policy assessment of June 2018, the Swiss franc has appreciated noticeably, against the major currencies as well as against emerging market currencies.

The Swiss franc is highly valued, and the situation on the foreign exchange market is still fragile. The negative interest rate and the SNB's willingness to intervene in the foreign exchange market as necessary remain essential in order to keep the attractiveness of Swiss franc investments low and thus ease pressure on the currency.

The new conditional inflation forecast suggests that inflation up to the beginning of 2019 will be higher than predicted in June due to a slight rise in domestic inflation. From the second quarter of 2019, the new conditional forecast lies below the June forecast as a result of the appreciation in the Swiss franc. For 2018, the SNB continues to anticipate inflation of 0.9%, while the inflation forecast of 0.8% for 2019 is 0.1 percentage points lower than projected at the last assessment. For 2020, the SNB expects to see inflation of 1.2%, compared with the 1.6% forecast in the last quarter. The conditional inflation forecast is based on the assumption that the three-month Libor remains at -0.75% over the entire forecast horizon".

EUR/USD

Resistance levels (open interest**, contracts)

$1.1800 (3618)

$1.1785 (1703)

$1.1763 (608)

Price at time of writing this review: $1.1688

Support levels (open interest**, contracts):

$1.1619 (3852)

$1.1580 (5728)

$1.1537 (3149)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date October, 15 is 90118 contracts (according to data from September, 19) with the maximum number of contracts with strike price $1,1600 (5728);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3253 (2489)

$1.3228 (1711)

$1.3213 (726)

Price at time of writing this review: $1.3153

Support levels (open interest**, contracts):

$1.3104 (1030)

$1.3076 (552)

$1.3044 (903)

Comments:

- Overall open interest on the CALL options with the expiration date October, 15 is 28424 contracts, with the maximum number of contracts with strike price $1,3200 (2887);

- Overall open interest on the PUT options with the expiration date October, 15 is 32540 contracts, with the maximum number of contracts with strike price $1,2800 (2482);

- The ratio of PUT/CALL was 1.14 versus 1.16 from the previous trading day according to data from September, 19.

* - 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.

• Facebook has yet to address all the concerns raised by European Commissioner for Justice, Consumers and Gender Equality Vera Jourová, the report said, citing the sources.

Economic activity, as measured by gross domestic product (GDP), was up 1.0 percent in the June 2018 quarter. This rise follows a 0.5 percent increase in the March 2018 quarter.

GDP grew 2.7 percent over the year ended June 2018.

Growth across 15 of the 16 industries contributed to the largest quarter-on-quarter increase in two years. A 1.0 percent increase in the service industries was the biggest contributor to growth this quarter. The goods-producing industries were up 0.9 percent following a flat March 2018 quarter. The primary industries grew 0.2 percent, with strong growth in agriculture, forestry, and fishing offset by a significant fall in mining.

After a period of strong growth until May of this year, the development of the Swiss foreign trade has been halting since then: while exports are seasonally adjusted in August Stagnating at a high level, imports fell by 1.1 percent. Of the Surplus in the trade balance amounted to 1.4 billion francs. Exports stagnated in August 2018 compared with the previous month (real: + 0.6 percent). While exports tended to rise from January to May, followed by a halt in development on a high level. Seasonally adjusted imports dropped by 1.1 percent (real: - 2.8 percent) back and show a similar course to exports over the last six months.