CFD Markets News and Forecasts — 05-05-2011

The Dow Jones Transportation Index is up 1.5% today. The outsized gain comes after Con-way (CNW 39.81, +2.21) posted for its latest quarter earnings that bested the consensus earnings per share estimate by $0.20. A sharp drop in oil prices has also provided a positive backdrop to transportation plays; oil was last quoted with a 7.5% loss at $101.05 per barrel after it had started the week above $114 per barrel.

The dollar strengthened from almost a three-year low even as claims for unemployment benefits jumped last week and worker productivity slowed in the first quarter, encouraging the Federal Reserve to keep borrowing costs low.
Applications for jobless benefits jumped by 43,000 to 474,000 in the week ended April 30, the most since August, Labor Department figures showed today. The measure of employee output per hour increased at a 1.6 percent annual rate after a 2.9 percent gain in the prior three months, other data from the Labor Department showed.
U.S. employers added 185,000 jobs in April after a 216,000 increase in March, the median estimate of economists survey forecast before data due tomorrow.
The euro dropped the most against the dollar in two weeks and slid versus the yen after European Central Bank President Jean-Claude Trichet signaled the ECB may wait until after June to raise interest rates again.
Japan’s currency climbed versus all of its 16 most-traded peers and reached the strongest level in six weeks against the dollar as falling commodities prompted investors to unwind bets in higher-yielding assets financed with yen. Currencies of commodity-exporting nations including Australia, Norway and Canada plunged.
The ECB left its main refinancing rate unchanged after boosting it a quarter-percentage point in April to 1.25 percent. Trichet, at a news conference in Helsinki, refrained from using the phrase “strong vigilance,” which might have signaled a June rate increase. He instead said inflation risks will be watched “very closely.”
While inflation accelerated to 2.8 percent last month and economic growth is gaining momentum, higher borrowing costs may exacerbate Europe’s debt crisis, which has already forced Greece, Ireland and Portugal to ask for external help.

Stocks have benefited from a recent flurry of buying interest. The bid has taken the Dow and S&P 500 up from session lows so that their losses are now only modest. Meanwhile, the Nasdaq is at session high with a solid gain.
Commodities remain under steady pressure, though. In fact, the CRB Commodity Index is down 3.7% to its lowest level in about seven weeks. Oil has been a considerably heavy drag on the CRB, given its 5.8% drop to $102.85 per barrel. Oil prices were just above $101 per barrel at session lows.

Losses extend to below $1.4600 area now as the rout continues and as model accounts continue to unwind euro longs set in recent days, the pair now on approach to $1.4580 that is the value of the 21d ma. Euro pauses for now around $1.4585, returns to $1.4600 as bounces remain shallow. Break under $1.4580 will open the way to $1.4500-4490.

The gap down at the open has the stock market positioned for its fourth straight loss after advancing in seven of the eight previous trading days.
Energy stocks have been a heavy burden all week. The sector is down almost 7% week to date. Of course, that has come amid a 7% week-to-date drop in oil prices, which were recently quoted at $105.75 per barrel for a 3.2% loss today.
Transocean (RIG 67.36, -1.10), Murphy Oil (MUR 69.99, -3.25), Pride International (PDE 41.63, +0.05), and Frontier Oil (FTO 25.05, -0.07) are among the latest energy plays to post quarterly results. Pride International is the only company in the group that offered up results which came short of the consensus earnings estimate.

EUR/USD $1.4950, $1.4915, $1.4800, $1.4750, $1.4615
USD/JPY Y82.00
EUR/JPY Y120.00, Y119.85, Y117.30
GBP/USD $1.6345
GBP/JPY Y133.00
AUD/USD $1.0775, $1.0600, $1.0865
USD/CAD C$0.9600

• uncertainty rises;

• exports may be faster than foreseen;

• downside risks from fin mkts, energy prices;

• could see negative impact from Japan;

• increase in infl during start 2011 due commodity price

• infl in coming months over 2%;

• risks to infl med term on upside;

• infl risks due energy prices;

• strong economy grwth cld also fuel commodity prices;

• today's decision was unanimous;

• all know we will take our decision whenever appropriate;

• notes U.S. Geithner supported strong dollar April 26;

• on Apr 27 U.S. Bernanke said Fed favor strong dollar;

• U.S. offls' statements for strong dollar 'important'

U.S. futures were set for a lower open Thursday after a report released Thursday morning showed continued weakness in the labor market.

Economy: The number of people filing first-time unemployment claims surged to 474,000 in the latest week - its highest total in 8 months - according to a government report.
This week has centered around the ever-important monthly jobs report due out Friday morning.
Economists expect the unemployment rate to hold steady at 8.8%, with employers forecasted to add 185,000 jobs in April. For the full year, economists expect 2.3 million new jobs and an unemployment rate of 8.4% by year end.
Companies: Detroit giant General Motors (GM) reported a first-quarter net profit of $3.2 billion, its fifth consecutive profitable quarter. Shares fell 1% in premarket trade.
Dow component Kraft (KFT, Fortune 500) reports quarterly results on Thursday, with analysts expecting earnings of 47 cents a share.
Shares of Whole Foods (WFMI, Fortune 500) rose 5% a day after the company reported solid results after Wednesday's closing bell and raised its outlook.
Also, retailers - including Target (TGT, Fortune 500) and Macy's (M, Fortune 500) - reported a strong surge in April stores sales boosted by Easter purchases in the month. Shares of Macy's rose more than 1% and Target's stock also edged up.
Other companies reporting Thursday include Priceline.com (PCLN), Visa (V, Fortune 500) and insurance giant AIG (AIG, Fortune 500).

• notes U.S. Geithner supported strong dollar April 26;

• on Apr 27 U.S. Bernanke said Fed favor strong dollar;

• U.S. offls' statements for strong dollar 'important'

• infl in coming months over 2%;

• risks to infl med term on upside;

• infl risks due energy prices;

• strong economy grwth cld also fuel commodity prices.

• uncertainty rises;

• exports may be faster than foreseen;

• downside risks from fin mkts, energy prices;

• could see negative impact from Japan.

Data released:
08:30     UK     CIPS services index (April)    54.3    55.8    57.1
10:00     Germany     Manufacturing orders (March) seasonally adjusted    -4.0%    0.6%    2.4%
10:00     Germany     Manufacturing orders (March) not seasonally adjusted, workday adjusted Y/Y    9.7%    15.5%    20.1%
11:00     UK     BoE meeting announcement    0.50%    0.50%    0.50%
11:45     EU(17)     ECB meeting announcement    1.25%    1.25%    1.25%

The euro hovered close to a 17-month peak against the dollar and hit a 13-month high against the pound on Thursday as investors awaited the Trichet's speach.
But in Europe the euro dragged lower on release of much weaker than expected German mfg orders data (-4.0% m/m versus median +0.4%).
While no move was expected from the ECB at today’s meeting following April’s 25 basis point rate rise, investors were set to focus on comments from Jean-Claude Trichet, ECB president, for clues as to future monetary tightening. Forecasts were split as to whether Mr Trichet would signal a move in June or July.
Ulrich Leuchtmann at Commerzbank said it was more likely that Mr Trichet would signal a rate rise in June than July.
“If we are right, the euro should find strong support against the dollar and we would not be able to exclude an attack on the psychologically important $1.50 mark,” he said.
The Bank of England has kept UK interest rates at a record low of 0.5%.
The pound suffered after a survey suggested activity in the UK services sector slowed markedly in April, further denting expectations that the Bank would move to abandon its ultra-loose monetary policy stance.
The UK services sector purchasing managers’ index dropped 54.3 in April, below expectations for a reading of 56.0.

EUR/USD tested $1.4900, but failed to break above and fell to a new session lows around $1.4815 on weak German news. Later rate recovered to $1.4825.

GBP/USD fell from $1.6545 to $1.6455 after the dissapointed data. Rate tried to recover and was back to $1.6500.

USD/JPY continued to go down and printed lows around Y79.55. Later rate recovered, but in general remained weak as the Japanese FinMin is reported as saying that current FX moves different from time of G7 intervention in March.

US data also comes at 1230GMT, when initial jobless claims are  expected to fall 19,000 to 410,000 in the April 30 week after rising sharply in the previous week.
At 1330GMT, Fed Chairman Ben Bernanke delivers a speech to the Chicago Fed's Annual Conference on Bank Structure and Competition.

USD/JPY weakened to a channel line from Apr 08 on Y79.60 before recovered to current Y79.84. Yen rises after the Japanese FinMin is reported as saying that current FX moves different from time of G7 intervention in March. Support seen into Y79.50, more at Y79.35/30 with stronger interest noted at the March 18 low of Y78.83.

The euro dragged lower on release of much weaker than expected German mfg orders data (-4.0% m/m versus medisn +0.4%).
Earlier rate hovered near a 17-month high against a struggling dollar on Thursday as investors looked for the European Central Bank to reinforce expectations of higher rates after its policy meeting later in the day.
Markets are waiting to see if the ECB chief Jean-Claude Trichet will use the "strong vigilance" code words to signal a follow-up rate rise in June to the initial move in April as central bank steps up its fight against inflation. Traders said that if Trichet repeats the phrase, the euro would push back above $1.49.

The Bank of England rate decision is due today too. Analysts expect the MPC will leave policy on hold at this meeting. Analysts' median forecast is for Bank Rate to rise from its current 0.5% to 1.0% by year end, with the first hike coming in the third quarter. Interestingly, this is MPC member Andrew Sentance's last meeting before being replaced by ex-Goldman Sachs UK economist Ben Broadbent in June.
The Australian dollar took a brief hit after data showing retail sales fell in March and were flat in the first quarter, indicating that higher interest rates were keeping consumers cautious even as the resource sector booms.
But the data did little to shake views that the Australian central bank would resume lifting rates in coming months as core inflation shows signs of heating up. Earlier this week, the Reserve Bank of Australia said underlying inflation was likely to head higher, laying the gourndwork for further tightening.

The Bank of England rate decision is due at 1100GMT. Analysts expect the MPC will leave policy on hold at this meeting. Analysts' median forecast is for Bank Rate to rise from its current 0.5% to 1.0% by year end, with the first hike coming in the third quarter. Interestingly, this is MPC member Andrew Sentance's last meeting before being replaced by ex-Goldman Sachs UK economist Ben Broadbent in June.

EUR/USD dragged lower on release of much weaker than expected German mfg orders data. Euro broke $1.4850 and fell to the lows around $1.4815. Support seen into $1.4800 (Asia low $1.48065), a break to expose stronger demand interest seen placed from around $1.4780.

AUD/USD triggered bids on $1.0690 and broke under $1.0670 to hold currently at $1.0660. Strong support is at $1.0515/20.

EUR/USD $1.4950, $1.4915, $1.4800, $1.4750, $1.4615
USD/JPY Y82.00
EUR/JPY Y120.00, Y119.85, Y117.30
GBP/USD $1.6345
GBP/JPY Y133.00
AUD/USD $1.0775, $1.0600, $1.0865
USD/CAD C$0.9600

Shanghai Composite +0.22% 2,872.40
Hang Seng -0.23% 23,261.61

Data:
01:30    Australia Retail Sales s.a. (MoM) (Mar)     -0.5%    
01:30    Australia Building Permits (YoY) (Mar)     -18.1%    
01:30    Australia Building Permits (MoM) (Mar)     9.1%

The euro rose toward a 17-month high versus the dollar on speculation European Central Bank President Jean-Claude Trichet will signal at today’s policy meeting he intends to raise interest rates this year to combat inflation.
The single currency snapped a two-day decline versus the yen before a German report that economists said will factory orders rose for a third month, adding to signs European growth is picking up.
Australia’s dollar fell for a fourth day after a government report showed retail sales unexpectedly declined in March.
German factory orders, adjusted for seasonal swings and inflation, gained 0.4 percent in March from February when they rose 2.4 percent, according to a  survey ahead of today’s data.

EUR/USD: the pair grown in around $1.4870.

GBP/USD: the pair grown in around $1.6530.

USD/JPY: the pair decreased in around Y80.30.

European data - at 1000GMT German manufacturing orders. The ECB decision at 1145GMT.
In the UK, local elections take place alongside the AV Referendum. UK data includes the April Services PMI at 0830GMT, which is expected to slip to a reading of 55.5 from 57.1 last month. BoE decision at 1100 GMT.
US data also comes at 1230GMT, when initial jobless claims are  expected to fall 19,000 to 410,000 in the April 30 week after rising sharply in the previous week. At the same time, non-farm productivity is expected to slow to a 1.5% increase in the first quarter, as GDP growth was much slower than in the previous quarter. Unit labor costs are expected to rebound 0.8% as a result. At 1330GMT, Fed Chairman Ben Bernanke delivers a speech to the Chicago Fed's Annual Conference on Bank Structure and Competition.

The euro reached its highest level in 17 months against the dollar on speculation European Central Bank President Jean-Claude Trichet will signal further rate increases after policy makers meet tomorrow.
The ECB raised its benchmark interest rate to 1.25% on April 7 from a record low 1%%. Some economists expect it to signal tomorrow another boost will come as soon as June.
The U.S. dollar fell versus the euro on weaker-than-forecast economic data and speculation the Federal Reserve will maintain economic stimulus.
The Institute for Supply Management’s index of non-manufacturing companies fell to 52.8 in April, the lowest since August. It was 57.3 in March, and economists forecasted a reading of 57.5.
ADP Employer Services data showed employment at U.S. companies increased by 179,000 jobs in April, compared with a revised 207,000 in March. The median estimate called for a 198,000 advance this month.
The Canadian dollar fell for a third day against its U.S. counterpart, the longest losing streak since March, as crude oil dropped. The commodity is Canada’s biggest export.
The pound touched its lowest level in more than a year against the euro after reports showed U.K. house prices fell and construction growth slowed, discouraging the Bank of England from boosting borrowing costs tomorrow.

EUR/USD: the pair shown high in the field of $1.4940, then decreased in around $1.4820.

GBP/USD: the pair  shown high in the field of $1.6570, theb decreased in around $1.6480.

USD/JPY: on results of yesterday's session the pair  decreased in around Y80.60.

European data - at 1000GMT German manufacturing orders. The ECB decision at 1145GMT.
In the UK, local elections take place alongside the AV Referendum. UK data includes the April Services PMI at 0830GMT, which is expected to slip to a reading of 55.5 from 57.1 last month. BoE decision at 1100 GMT.
US data also comes at 1230GMT, when initial jobless claims are  expected to fall 19,000 to 410,000 in the April 30 week after rising sharply in the previous week. At the same time, non-farm productivity is expected to slow to a 1.5% increase in the first quarter, as GDP growth was much slower than in the previous quarter. Unit labor costs are expected to rebound 0.8% as a result. At 1330GMT, Fed Chairman Ben Bernanke delivers a speech to the Chicago Fed's Annual Conference on Bank Structure and Competition.

Japan's market was closed for a holiday.

European stocks slid for a second day as companies from Holcim Ltd. (HOLN) to Vestas Wind Systems A/S reported earnings that missed estimates and a report showed U.S. service industries expanded at the slowest pace in eight months.
Holcim retreated 4.1 percent after the world’s second- biggest cement maker posted decreased profit.
Vestas tumbled 8 percent after the largest wind-turbine maker reported a first- quarter loss.
BP Plc (BP/) and Rio Tinto Group led gauges of basic- resource producers and energy companies to six-week lows as commodities plunged.
Fresnillo Plc (FRES), the world’s largest primary silver producer, slid 5.2 percent to 1,515 pence as the precious metal headed for the biggest three-day decline since 2008.
Wincor Nixdorf AG (WIN) plunged 13 percent to 47.53 euros, the biggest drop since July 2009. The German maker of banking machines and cash registers said second-quarter net income fell 8 percent to 24 million euros.
Anheuser-Busch InBev NV (ABI) sank 3.3 percent to 41.45 euros after the world’s biggest brewer reported first-quarter volume that missed estimates as high unemployment levels in the U.S. meant consumers drank less beer.
ARM Holdings Plc (ARM) dropped 7.3 percent to 558 pence after AppleInsider reported that rival Intel Corp. (INTC) may be interested in making chips for Apple Inc. (AAPL)’s mobile devices. ARM is the U.K. designer of chips that help power Apple’s iPhone.

Stocks remained in the red Wednesday afternoon, as disappointing reports on jobs and the services sector revived jitters about the economy.
General Electric (GE, Fortune 500) and Caterpillar (CAT, Fortune 500) were the biggest drags on the Dow. Shares of First Solar (FSLR) pressured both the Nasdaq and S&P 500, falling nearly 6%.
Before the opening bell, payroll processor ADP said the private sector created 179,000 jobs last month -- down from 207,000 in the previous month. That was less than the 200,000 economists had been expecting.
Economy: In addition to ADP's report on job creation, outplacement firm Challenger, Gray & Christmas issued a report showing employers announced fewer planned job cuts in April -- even as government sector layoffs mounted.
Companies: Intel (INTC, Fortune 500) helped offset losses in the three major stock indexes, after the company announced it would manufacture microprocessor chips using new 3-D technology. Intel shares rose more than 2% following the news.
After the close, investors will get results from News Corp (NWS, Fortune 500)., Prudential Financial (PRU, Fortune 500), WholeFoods (WFMI, Fortune 500), MetLife (MET, Fortune 500), and video game publisher Electronic Arts (ERTS, Fortune 500).

Resistance 3: Y81.70 (May 2 high)
Resistance 2:Y81.20 (May high)
Resistance 1:Y80.70 (session high)
Current price: Y80.45
Support 1:Y80.30 (session low)
Support 2:Y79.80 (Mar 17 high)
Support 3:Y79.00 (Mar 18 low)  
Comments: the pair decreased. The nearest support - Y80.30. Below losses are possible to Y79.80. The nearest resistance - Y80.70. Above growth is possible to Y81.20.

Resistance 3: Chf0.8700 (МА (200) for Н1)
Resistance 2: Chf0.8660 (resistance line from Apr 6)
Resistance 1: Chf0.8620 (session high)
Current price: Chf0.8592
Support 1: Chf0.8550 (May 4 low)
Support 2: Chf0.8500 (psychological mark)
Support 3: Chf0.8400 (psychological mark)
Comments: the pair bargains in the field of the reached low. The nearest support - Chf0,8550. Below loss may extend to Chf0.8500. The nearest resistance - Chf0.8620. Above is located Chf0.8660.

Resistance 3: $ 1.6740 (Apr 28 and May 2 high)
Resistance 2: $ 1.6660 (May 3 high)
Resistance 1: $ 1.6570 (May 4 high, МА (200) for Н1)
Current price: $1.6518
Support 1 : $1.6480 (session low)
Support 2 : $1.6450 (May 4 low)
Support 3 : $1.6430 (Apr 26-27 low)
Comments: the pair slightly grown. The nearest resistance - around $1.6570. Above growth possible to $1.6660. The nearest support $1.6480. Below is possible testings of around $1.6450.

Resistance 3: $ 1.5140 (Nov-Dec'2009 high)
Resistance 2: $ 1.5000 (psychological mark)
Resistance 1: $ 1.4940 (May 4 high)
Current price: $1.4805
Support 1 : $1.4760 (Apr 28 low, May 2-4 low)
Support 2 : $1.4630 (Apr 27 low)
Support 3 : $1.4490 (Apr 26 low)
Comments: essential changes has not occured. The nearest support $1,4760. Below losses are possible to $1.4630. The nearest resistance - $1.4940. Above growth is possible to $1,5000.

07:00     UK     Halifax house price index (April)         0.3%    0.1%
07:00     UK     Halifax house price index (April) 3m Y/Y         -2.9%    -2.9%
08:30     UK     CIPS services index (April)         55.8    57.1
10:00     Germany     Manufacturing orders (March) seasonally adjusted         0.6%    2.4%
10:00     Germany     Manufacturing orders (March) not seasonally adjusted, workday adjusted Y/Y         15.5%    20.1%
11:00     UK     BoE meeting announcement         0.50%    0.50%
11:45     EU(17)     ECB meeting announcement         1.25%    1.25%
12:30     EU(17)     ECB press conference               
12:30     USA     Jobless claims (week to 30.04)         410K    429K
12:30     USA     Productivity (Q1) preliminary         0.5%    2.6%
12:30     USA     Unit labour cost (Q1) preliminary         0.8%    -0.6%
20:30     USA     M2 money supply (25.04), bln         -    +12.4