CFD Markets News and Forecasts — 19-06-2018

Major US stock markets closed in the red, as the sharp escalation of the trade dispute between China and the United States forced investors to look for safer assets.

On Monday evening, Donald Trump said that he asked the US trade representative to allocate Chinese goods worth $ 200 billion for imposing additional tariffs of 10%. "The new fees will come into force if China refuses to change its practice, and if it insists on the new tariffs that it recently announced," the US president said. This step was followed after on Friday the US announced that they would impose a 25-percent tariff on Chinese products to $ 50 billion. Tariffs for the initial list of goods worth about $ 34 billion will be introduced on July 6. According to the representative of the White House, the measure proposed on Monday is a response to Beijing's decision to raise tariffs for US exports by $ 50 billion.

A certain influence on the course of trading was provided by the US data. The Ministry of Trade reported that bookings of new homes rose to almost 11-year highs in May on the back of accelerating both single-family and multi-unit segments, but the second monthly reduction in construction permits suggests that the growth in the housing market will remain moderate. The laying of new homes jumped 5.0 percent to a seasonally adjusted annual rate of 1.350 million units last month. This was the highest level since July 2007. Data for April were slightly revised - to 1.286 million units instead of the previously announced rate of 1.287 million units. The building permit decreased by 4.6 percent to 1.301 million units, the lowest since September 2017. Economists predicted that bookings of new homes will increase to 1.310 million units, and permits will be reduced to 1.350 million units.

Most of the components of DOW finished trading in the red (23 of 30). Outsider were shares of The Boeing Company (BA, -4.08%). Leader of growth were shares of Verizon Communications Inc. (VZ, + 2.20%).

Almost all sectors of S & P recorded a fall. The largest decrease was observed in the sector of industrial goods (-2.2%). The utilities sector grew most (+ 0.6%).

At closing:

Dow 24,700.14 -287.33 -1.15%

S&P 500 2,762.57 -11.18 -0.40%

Nasdaq 100 7,725.59 -21.44 -0.28%

• U.S Economy Can Handle Higher Oil Prices Better Than Before

• Oil Supply Shortfall Could Push Oil Prices Even Higher

• Oil Under-Supply Makes Markets 'Vulnerable' to Geopolitical Price Spikes

• Low Oil Investment Spending During Bust May Stem Future Supplies

U.S. stock-index futures fell sharply on Tuesday, as the U.S. President Trump threatened to impose new tariffs on $200 billion worth of Chinese goods, escalating further trade tensions between the world's two largest economies and triggering a flight from riskier assets.

Global Stocks:

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

AT&T (T) resumed with a Neutral at JP Morgan; target $36

Verizon (VZ) upgraded to Buy from Hold at Deutsche Bank

Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,301,000. This is 4.6 percent below the revised April rate of 1,364,000, but is 8.0 percent above the May 2017 rate of 1,205,000. Single-family authorizations in May were at a rate of 844,000; this is 2.2 percent below the revised April figure of 863,000. Authorizations of units in buildings with five units or more were at a rate of 421,000 in May.

Privately-owned housing starts in May were at a seasonally adjusted annual rate of 1,350,000. This is 5.0 percent above the revised April estimate of 1,286,000 and is 20.3 percent above the May 2017 rate of 1,122,000. Single-family housing starts in May were at a rate of 936,000; this is 3.9 percent (±10.6 percent)* above the revised April figure of 901,000. The May rate for units in buildings with five units or more was 404,000.

• Oil market may face deficit in 3Q if no moves on output

EUR/USD falls, to more-than-two-week low of 1.1530 reached late last week, after downbeat comments from European Central Bank President Mario Draghi. Speaking at the ECB forum in Sintra, Portugal, he said "uncertainty surrounding the eurozone growth outlook has recently increased".

This reflected surpluses for goods (€21.0 billion), services (€9.6 billion) and primary income (€8.5 billion), which were partly offset by a deficit for secondary income (€10.7 billion).

The 12-month cumulated current account for the period ending in April 2018 recorded a surplus of €413.7 billion (3.7% of euro area GDP), compared with €361.3 billion (3.3% of euro area GDP) in the 12 months to April 2017. This development was due to increases in the surpluses for services (from €46.1 billion to €106.1 billion) and goods (from €347.2 billion to €353.9 billion), and to a decrease in the deficit for secondary income (from €147.2 billion to €138.3 billion). These were partially offset by a decrease in the surplus for primary income (from €115.2 billion to €92.0 billion).

EUR/USD

Resistance levels (open interest**, contracts)

$1.1839 (2435)

$1.1780 (1215)

$1.1741 (503)

Price at time of writing this review: $1.1597

Support levels (open interest**, contracts):

$1.1554 (2286)

$1.1516 (4442)

$1.1476 (4835)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date July, 9 is 98366 contracts (according to data from June, 18) with the maximum number of contracts with strike price $1,1500 (4835);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3391 (401)

$1.3350 (165)

$1.3325 (160)

Price at time of writing this review: $1.3224

Support levels (open interest**, contracts):

$1.3177 (2518)

$1.3146 (2011)

$1.3110 (1029)

Comments:

- Overall open interest on the CALL options with the expiration date July, 9 is 22483 contracts, with the maximum number of contracts with strike price $1,3500 (2213);

- Overall open interest on the PUT options with the expiration date July, 9 is 26131 contracts, with the maximum number of contracts with strike price $1,3250 (2518);

- The ratio of PUT/CALL was 1.16 versus 1.15 from the previous trading day according to data from June, 18.

* - 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 forecasts by the Federal Government's Expert Group - summer 2018 - The Expert Group is keeping to its previous assessment and anticipates robust GDP growth of 2.4% in 2018. While the booming global economy and favourable trend in exchange rates are boosting demand for Swiss products, growth is also gaining increasing momentum from the domestic economy. The Expert Group expects support from the international economy to gradually abate in 2019, while GDP growth in Switzerland looks set to remain at a solid 2.0% in the coming year.

• Recent data consistent with forecast acceleration in GDP growth to above 3 pct

• Inflation to remain low for some time, pick up gradually to above 2 pct

• Data suggested household consumption was less buoyant in Q2, partly due to warm weather

• Low rates supporting economy, steady policy consistent with goals

• Progress on unemployment and inflation expected to be only gradual

Residential property prices fell 0.7 per cent in the March quarter 2018, according to figures released today by the Australian Bureau of Statistics (ABS).

ABS Chief Economist Bruce Hockman said Australia's two largest cities led the fall: "Sydney recorded the third consecutive quarter of falling property prices (-1.2 per cent) and the first annual price fall (-0.5 per cent) since the March quarter 2012, while Melbourne property prices fell 0.6 per cent, the first quarterly price fall since September quarter 2012."

"Regulatory changes and tighter lending conditions have continued to affect investors, who are more active in the Sydney and Melbourne property markets. These cities have seen strong price growth over recent years particularly in detached dwellings."