CFD Markets News and Forecasts — 04-05-2018

U.S. stock-index futures fell on Friday, as investors digested April employment report and assessed the impact of the U.S.-China trade talks.

Global Stocks:

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

Amazon (AMZN) initiated with a Buy at Cascend Securities; target $1800

Apple (AAPL) initiated with a Market Perform at New Street Research

Tesla (TSLA) initiated with an Outperform at New Street Research

In April, average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $26.84. Over the year, average hourly earnings have increased by 67 cents, or 2.6 percent. Average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $22.51 in April.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in April. In manufacturing, the workweek increased by 0.2 hour to 41.1 hours, while overtime edged up by 0.1 hour to 3.7 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls increased by 0.1 hour to 33.8 hours.

Total nonfarm payroll employment increased by 164,000 in April, and the unemployment rate edged down to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, manufacturing, health care, and mining.

In April, the unemployment rate edged down to 3.9 percent, following 6 months at 4.1 percent. The number of unemployed persons, at 6.3 million, also edged down over the month.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.3 million in April and accounted for 20.0 percent of the unemployed. Over the year, the number of long-term unemployed was down by 340,000.

In March 2018 compared with February 2018, the seasonally adjusted volume of retail trade increased by 0.1% in the euro area (EA19) and decreased by 0.1% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In February, the retail trade volume increased by 0.3% in the euro area and by 0.4% in the EU28. In March 2018 compared with March 2017, the calendar adjusted retail sales index increased by 0.8% in the euro area and by 1.8% in the EU28.

Eurozone economic activity continued to expand at a robust pace in April, with solid growth signalled in both the manufacturing and service sectors. However, growth has downshifted in recent months. The latest expansion of output was the slowest since January 2017.

The final IHS Markit Eurozone PMI Composite Output Index posted 55.1 in April, down from 55.2 in March and below the earlier flash estimate (also 55.2).

Business activity in Germany's service sector grew at the slowest rate for 19 months in April, the pace of expansion pulling back further from a near seven-year high at the beginning of the year. Service sector new orders showed the weakest rise since July last year, which contributed to a softening of firms' optimism towards the outlook. There was better news on the employment front however, with the pace of job creation ticking up to a three-month high.

The seasonally adjusted final IHS Markit Germany Services PMI Business Activity Index registered 53.0 in April, down from 53.9 in March (and a preliminary 'flash' estimate of 54.1) and its lowest since September 2016.

Spanish services activity continued to rise markedly during April, despite the rate of growth easing to the slowest in 2018 so far. The latest expansion was supported by a further strong rise in new business, but there were some signs of companies offering discounts in order to secure new work.

The headline seasonally adjusted Business Activity Index dropped to 55.6 in April from 56.2 in March, with growth slowing for the second month running from February's seven-month high. That said, activity continued to rise markedly over the month amid reports of improving customer demand. Business activity has increased on a monthly basis throughout the past four-and-a-half years.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2106 (2005)

$1.2069 (2245)

$1.2046 (1422)

Price at time of writing this review: $1.1972

Support levels (open interest**, contracts):

$1.1944 (4362)

$1.1898 (2318)

$1.1849 (2664)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date May, 4 is 106164 contracts (according to data from May, 3) with the maximum number of contracts with strike price $1,2000 (6102);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3751 (1158)

$1.3703 (412)

$1.3659 (1454)

Price at time of writing this review: $1.3558

Support levels (open interest**, contracts):

$1.3495 (360)

$1.3464 (40)

$1.3398 (104)

Comments:

- Overall open interest on the CALL options with the expiration date May, 4 is 26026 contracts, with the maximum number of contracts with strike price $1,4400 (3222);

- Overall open interest on the PUT options with the expiration date May, 4 is 28866 contracts, with the maximum number of contracts with strike price $1,3700 (2215);

- The ratio of PUT/CALL was 1.11 versus 1.09 from the previous trading day according to data from May, 3.

* - 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.

• Economic growth looks to have picked up in Q1, partly thanks to exports

• Business conditions "very positive", sees further solid growth in non-mining investment

• Data revisions show more resilient household consumption, solid growth seen for Q1

• If economy improves as expected, higher rates likely to be "appropriate" at some point

• Growth forecasts unchanged, inflation and unemployment nudged up in near term

• A "significant" appreciation in the a$ would dampen growth and inflation

• Underlying inflation forecast at 2 pct dec 2018 to dec 2019, rising to 2.25 pct by mid-2020

• Unemployment forecast at 5.5 pct end 2018 (from 5.25 pct), 5.25 pct out to mid-2020

• Economy not expected to face broad-based capacity constraints "for some time"

• Significant escalation of trade protectionism could derail global growth

The Caixin China Composite PMI data (which covers both manufacturing and services) showed that growth of business activity across China picked up since March, but remained weaker than that seen at the turn of the year. At 52.3 in April, the Composite Output Index was up only slightly from a four-month low of 51.8 in March.

April survey data pointed to stronger increases in output across both the manufacturing and service sectors. Growth of services activity improved to a solid pace, although remained slower than that seen at the start of 2018.

Asia-Pacific stock markets were relatively quiet Friday as investors awaited the April jobs report out of the U.S.

European stocks on Thursday closed near the lows of the day, with selling accelerating in the afternoon as U.S. stocks slumped at the start of their regular trading session, extending a downturn begun following the Federal Reserve's Wednesday policy update on inflation and economic health.

U.S. stocks closed lower on Thursday, although major indexes came off the day's lows following a breach of key support levels. The Dow Jones Industrial Average closed flat at 23,930, although the 0.02% gain on the day was enough to avert a five-day losing streak.