CFD Markets News and Forecasts — 03-05-2018

New orders for manufactured durable goods in March increased $6.4 billion or 2.6 percent to $254.9 billion, the U.S. Census Bureau announced today. This increase, up four of the last five months, followed a 3.5 percent February increase. Excluding transportation, new orders were virtually unchanged. Excluding defense, new orders increased 2.8 percent. Transportation equipment, also up four of the last five months, drove the increase, $6.4 billion or 7.6 percent to $91.4 billion.

The report was issued today by Anthony Nieves, Chair of the Institute for Supply:

"The NMI registered 56.8 percent, which is 2 percentage points lower than the March reading of 58.8 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 59.1 percent, 1.5 percentage points lower than the March reading of 60.6 percent, reflecting growth for the 105th consecutive month, at a slower rate in April. The New Orders Index registered 60 percent, 0.5 percentage point higher than the reading of 59.5 percent in March. The Employment Index decreased 3 percentage points in April to 53.6 percent from the March reading of 56.6 percent."

U.S. stock-index futures fell on Thursday, as investors focused on the U.S.-China trade talks, while the latest set of corporate earnings added little optimism.

Global Stocks:

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

Canada's imports rose 6.0% to a record $51.7 billion in March. Exports also increased, up 3.7% to $47.6 billion. As a result, Canada's merchandise trade deficit with the world widened from $2.9 billion in February to a record $4.1 billion in March.

In real (or in volume) terms, imports rose 5.3% and exports were up 3.0%.

Imports rose 6.0% to a record high $51.7 billion in March, with increases in 9 of 11 sections. Motor vehicles and parts and also consumer goods were largely responsible for the increase. Year over year, imports were up 9.2%.

Imports of motor vehicles and parts rose 8.3% to $10.3 billion, the strongest increase since 2011. Passenger cars and light trucks contributed the most to the March increase, rising 13.0%. Higher than usual import levels for March were observed for light trucks. For the section as a whole, volumes rose 10.0%, while prices fell 1.5%.

Cisco Systems (CSCO) initiated with an Overweight at JP Morgan

Caterpillar (CAT) downgraded to Neutral from Buy at BofA/Merrill; target $156

Deere (DE) upgraded to Buy from Neutral at BofA/Merrill; target $159

3M (MMM) upgraded to Outperform from Sector Perform at RBC Capital Mkts; target $238

Nonfarm business sector labor productivity increased 0.7 percent during the first quarter of 2018, the U.S. Bureau of Labor Statistics reported today,
as output increased 2.8 percent and hours worked increased 2.1 percent. From the first quarter of 2017 to the first quarter of 2018, productivity increased 1.3 percent, reflecting a 3.6-percent increase in output and a 2.2-percent increase in hours worked.

Unit labor costs in the nonfarm business sector increased 2.7 percent in the first quarter of 2018, reflecting a 3.4-percent increase in hourly compensation and a 0.7-percent increase in productivity. BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity.

In the week ending April 28, the advance figure for seasonally adjusted initial claims was 211,000, an increase of 2,000 from the previous week's unrevised level of 209,000. The 4-week moving average was 221,500, a decrease of 7,750 from the previous week's unrevised average of 229,250. This is the lowest level for this average since March 3, 1973 when it was 221,250.

DowDuPont (DWDP) reported Q1 FY 2018 earnings of $1.12 per share, beating analysts' consensus estimate of $1.09.

The company's quarterly revenues amounted to $21.510 bln (+62.6% y/y), generally in-line with analysts' consensus estimate of $21.308 bln.

DWDP rose to $63.70 (+0.33%) in pre-market trading.

Tesla (TSLA) reported Q1 FY 2018 net losses of $3.35 per share (versus -$1.33 in Q1 FY 2017), better than analysts' consensus estimate of -$3.53.

The company's quarterly revenues amounted to $3.409 bln (+26.4% y/y), beating analysts' consensus estimate of $3.300 bln.

TSLA fell to $286.80 (-4.77%) in pre-market trading.

American Intl (AIG) reported Q1 FY 2018 earnings of $1.04 per share (versus $1.36 in Q1 FY 2017), missing analysts' consensus estimate of $1.26.

AIG fell to $51.80 (-5.54%) in pre-market trading.

• Euro zone economic growth will slow to 2.0 pct in 2019 from 2.3 pct seen in 2018

• Euro zone budget deficit will shrink to 0.6 pct/gdp in 2019 from 0.7 pct/gdp seen in 2018

• Economy more exposed to external risks, which have strengthened and become more negative

• Biggest risk to good economic outlook for eu is protectionism

UK service providers signalled a modest rebound in business activity growth following the snow disruptions seen during March. However, aside from the low point recorded last month, the latest upturn in service sector output was the softest for just over a year-and-a-half. Subdued new business growth persisted in April, which contributed to a further slowdown in the rate of job creation. Meanwhile, survey respondents also noted that higher payroll costs continued to drive up operating expenses and place a squeeze on margins. A

t 52.8 in April, the seasonally adjusted IHS Markit/CIPS UK Services PMI® Business Activity Index picked up slightly from March's 20-month low of 51.7. The latest reading still only signalled a moderate increase in service sector activity, with the rate of growth the second-weakest since September 2016.

In March 2018, compared with February 2018, industrial producer prices rose by 0.1% in the euro area (EA19) and by 0.2% in the EU28. In February 2018, prices remained unchanged in both zones. In March 2018, compared with March 2017, industrial producer prices rose by 2.1% in the euro area and by 2.4% in the EU28.

Euro area annual inflation is expected to be 1.2% in April 2018, down from 1.3% in March 2018, according to a flash estimate from Eurostat. Looking at the main components of euro area inflation, energy (2.5%, compared with 2.0% in March) and food, alcohol & tobacco (2.5%, compared with 2.1% in March) are expected to have the highest annual rate in April, followed by services (1.0%, compared with 1.5% in March) and non-energy industrial goods (0.3%, compared with 0.2% in March).

• The decision was unanimous

• Labour market developments have been broadly in line with expectations

• Oil prices have risen and are higher than assumed. Futures prices have also risen slightly, but continue to suggest that oil prices will decline in the coming

• Underlying inflation is below the inflation target, but the driving forces indicate that it will

• The outlook and the balance of risks do not appear to have changed substantially since the march report. This suggests keeping the key policy rate unchanged at this meeting

• Says Fed's experience of the process of normalization is very helpful

• Monetary normalization will take some time, important not to postpone beginning unnecessarily

• Mkt expectation for first rate hike around mid-2019 not unrealistic

• ECB has not corrected or committed to mkt expectation for first rate hike before end of reinvestment

• Household spending moderated from late last year, but business investment was growing 'strongly'

• Employment growth has been strong 'on average,' economy growing at a 'moderate rate'

• Inflation has 'moved close' to its 'symmetric' 2 pct target and is expected to 'run near' that level over the medium term

• In trend terms, the balance on goods and services was a surplus of $1,112m in March 2018, an increase of $317m on the surplus in February 2018.

• In seasonally adjusted terms, the balance on goods and services was a surplus of $1,527m in March 2018, an increase of $178m on the surplus in February 2018.

• In seasonally adjusted terms, goods and services credits rose $488m (1%) to $34,840m. Non-rural goods rose $191m (1%), non-monetary gold rose $131m (8%) and rural goods rose $126m (3%). Net exports of goods under merchanting fell $1m (14%). Services credits rose $41m (1%).

EUR/USD

Resistance levels (open interest**, contracts)

$1.2112 (1956)

$1.2077 (2077)

$1.2053 (1300)

Price at time of writing this review: $1.1988

Support levels (open interest**, contracts):

$1.1937 (4172)

$1.1894 (1672)

$1.1847 (2681)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date May, 4 is 105205 contracts (according to data from May, 2) with the maximum number of contracts with strike price $1,2000 (6391);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3803 (360)

$1.3757 (1093)

$1.3682 (1438)

Price at time of writing this review: $1.3602

Support levels (open interest**, contracts):

$1.3537 (871)

$1.3493 (373)

$1.3447 (317)

Comments:

- Overall open interest on the CALL options with the expiration date May, 4 is 25591 contracts, with the maximum number of contracts with strike price $1,4400 (3223);

- Overall open interest on the PUT options with the expiration date May, 4 is 27957 contracts, with the maximum number of contracts with strike price $1,3700 (2219);

- The ratio of PUT/CALL was 1.09 versus 1.10 from the previous trading day according to data from May, 2.

* - 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.

Our great financial team is in China trying to negotiate a level playing field on trade! I look forward to being with President Xi in the not too distant future. We will always have a good (great) relationship!