FTSE 100 closes lower as economic data disappoints – Binary Options Daily Review

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Markets Report

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Thursday 14th September 2017
Prepared by Barry Jenkins, MarketsWorld Binary Options Analyst

 
Market Index Closing Level Move on day Intraday Market Range
CAC 5,217.59 + 8.58 5,200.21 – 5,227.00
DAX 12,553.57 + 28.80 12,489.20 – 12,565.80
Dow Jones 22,158.18 + 39.32 22,095.79 – 22,158.18
FTSE 7,379.70 – 20.99 7,336.23 – 7,401.30
IBEX 10,371.00 + 34.80 10,308.0 – 10,395.10

Closing Markets Summary

Dow Jones

Stocks in the U.S. closed slightly higher on Wednesday with all three benchmarks closing at all-time highs again on Wednesday. The main indexes spent most of the day gyrating between small gains and losses as investors paused for breath after several days of gains. Economic data released showed that the producer-price index rose 0.2% in August, mostly thanks to higher gas prices. Core PPI also rose 0.2%, though the 12-month change remains unchanged at 1.9%. The closely watched inflation report is due to be released on Thursday. Companies that featured included Apple Inc. which slipped 1.1% after the tech giant on Tuesday revealed its new line up of gadgets, but the much anticipated new flagship iPhone X it won’t be delivered until November. Centene Corp. rose 7.2% after the health insurer reported late Tuesday it has signed an agreement in which Fidelis Care will become Centene’s health plan in the state of New York. SeaDrill Ltd. rose 13% after the offshore driller said late Tuesday it has filed for bankruptcy protection and agreed to a major restructuring plan with its senior lenders. Western Digital Corp. fell 4.3% after losing out on a Toshiba Corp. deal. Toshiba said it had picked a consortium led by Bain Capital, instead of Western Digital, to buy its chip business for more than $18 billion. Nordstrom Inc. rose 5.7% after a report late Tuesday that the retailer is taking steps to go private. The Dow Jones closed 39.32 points at 22,158.18. The S&P 500 rose 1.89 points to close at 2,498.37. The Nasdaq Composite closed up 5.91 points at 6,460.19.

Europe

European equity markets were little changed on Wednesday with the Stoxx Europe 600 index closing down 0.08 of a point at 381.34, narrowly breaking a five-session winning streak. European Commission President Jean-Claude Juncker called for the European Union to hold free-trade talks with Australia and New Zealand in his annual state of the EU address Wednesday. The move is seen as reflecting the EU’s ambitions to fill a gap in global leadership left by U.S. President Donald Trump’s protectionist policies. Contributing to the downward move were losses in shares of suppliers to Apple Inc. following the launch of its new iPhone models on Tuesday. Apple revealed its new $1,000 iPhone X smartphone won’t factor into its current fiscal year, as it will be released on Nov. 3. Frankfurt-listed shares of Apple ended 1% lower. Among suppliers, Dialog Semiconductor PLC fell 1.6%, and AMS AG dropped 3.9%. Compagnie Financiere Richemont SA fell 1.2% even as the Swiss luxury products maker posted a 12% rise in sales. Forecasts were for a 10% increase. Shares of rival luxury watch goods maker Swatch Group Ltd. fell 3.9%. Vivendi SA rose 2.8% after UBS raised its rating on the French media company to buy from neutral. On regional markets the French CAC closed up 8.58 points at 5,217.59, the German DAX closed up 28.80 points at 12,553.57 and the Spanish IBEX closed up 34.80 points at 10,371.00.

FTSE

The FTSE 100 closed lower on Wednesday as the recent gains in the pounds evaporated on the back of wage data that remained stagnant in spite news that the unemployment rate fell. The pound was little changed against the euro at 1.1113, easing back from a six-week high, and fell 0.51% versus the dollar at 1.3216%, down from its one-year high or 1.3315. The pound had moved higher the previous day after data showed inflation spiking to a six-year high in August, raising expectations that the Bank of England could lift rates sooner rather than later. However, disappointing wage data released earlier prompted doubts about a rate hike. Data from the Office for National Statistics showed UK earnings growth continues to lag well below inflation despite the unemployment rate falling to a new record low. Average weekly earnings growth remained at 2.1% for the three months to the end of July, falling short of the forecasts for 2.2%. For the single month of July, earnings growth dropped to just 1.4% from 2.8%. Excluding bonuses, average earnings were also up 2.1% compared to the same period last year versus forecasts for 2.2%. This disappointing wage data came despite the unemployment rate falling to 4.3% from 4.4%, forecasts were for an unchanged reading. There was an 181,000 improvement in employment in the three months to July compared to the three months to April. Jobless claims fell 2.8K in August, which was more than forecast, with a claimant count rate of 2.3% last month, the same as in July. Companies that featured included Galliford Try led the fallers despite reporting full-year pre-tax profit at the top end of its forecast range. Tesco slipped 1.84% a downgrade to ‘underperform’ from Exane BNP Paribas. Infrastructure and construction company Balfour Beatty moved slightly higher after selling Blackpool Airport for £4.25m. Dunelm moved up 8% as it said the new financial year had started well, even though full-year profits dropped to towards the lower end of expectations. EasyJet flew rose 0.675 after it announced it will now let customers book long-haul flights with other carriers through its website. The FTSE 100 closed down 20.99 points at 7,379.70.

Economic News Expected Today

 USA

Type Period Forecast Previous Importance
Continuing Jobless Claims Sept 1,985K 1,940K Low
CPI August 0.3% m/m; 1.8% y/y 0.1% m/m; 1.7% y/y Medium
Core CPI August 0.2% m/m; 1.6% y/y 0.1% m/m; 1.7% y/y High
Initial Jobless Claims Sept 300K 298K Medium
Bloomberg Consumer Confidence Sept   52.6 Low
Cleveland PMI August   0.2% Low

Economic News Expected Today

EU  Eurozone

Type Period Forecast Previous Importance
CPI (France) August 0.5% m/m 0.5% m/m Medium
CPI (Italy) August 0.3% m/m; 1.2% y/y 0.3% m/m; 1.2% y/y Medium
Buba President Weidmann Speaks (Germany) Sept     Medium

Economic News Expected Today

UK United Kingdom

Type Period Forecast Previous Importance
RICS House Price Balance August -1% 1% Medium
BoE MPC Vote Cut Sept 0 0 Medium
BoE MPC Vote Hike Sept 2 2 Medium
BoE MPC Vote Unchanged Sept 7 6 Medium
BoE QE Total Sept 435B 435B Medium
BoE Interest Rate Decision Sept 0.25% 0.25% High
BoE MPC Meeting Minutes Sept     High

Other Global Economic Data Expected

 

Type Period Forecast Previous Importance
RBA Assist Gov Debelle Speaks (Australia) Sept     Medium
Employment Change (Australia) August 15.0K 27.9K High
Full Employment Change (Australia) August   -20.3K Medium
Participation Rate (Australia) August 65.1% 65.1% Low
Unemployment Rate (Australia) August 5.6% 5.6% Medium
Industrial Production (China) August 6.6% y/y 6.4% y/y High
Retail Sales (China) August 10.5% y/y 10.4% y/y Medium
SNB Interest Rate Decision (Switzerland) Sept -0.75% -0.75% High
SNB Monetary Policy Statement (Switzerland) Sept     High
New Housing Price Index (Canada) July 0.3% m/m 0.2% m/m Medium

Economic News Round Up MarketsWorld Bars

U.S. producer price inflation increased less than forecast in August, though inflationary pressures at the factory gate were on the rise. The Commerce Department reported that producer prices increased 0.2% last month, missing the forecast for a 0.3% gain and still bouncing back from a prior 0.1% drop. Year-over-year, the producer price index rose 2.4% in August, slightly below forecasts for a gain of 2.5% but higher than the 1.9% increase in the preceding month. The core producer price index rose 0.1% in August, missing forecasts for a gain of 0.2% and compared to the prior month’s 0.1% decline. Core producer prices increased at an annualized rate of 2.0% last month, below forecasts for a 2.1% increase but higher than the gain of 1.9% in July.

The jobless rate in the U.K. fell in July while wage inflation registered a weaker than forecast increase. The Office for National Statistics reported that the rate of unemployment dropped to 4.3% in July, from the previous month’s reading of 4.4%. Forecasts were for an unchanged reading. The claimant count decreased by a seasonally adjusted 2,800 in August, ahead of forecasts for a gain of 600 people and following a decline of 2,900 a month earlier, whose figure was revised from a previously reported drop of 4,200. The average earnings index, including bonuses, rose by a seasonally adjusted 2.1% in the three months to July, missing forecasts for a 2.3% rise. Excluding bonuses, wages rose by 2.1% in the three months to July, compared to forecasts for a 2.2% gain.

Forex Round Up MarketsWorld Bars

The U.S. dollar was sharply higher against a basket of major currencies on Wednesday, shaking off downbeat economic data that showed wholesale inflation undershot forecasts ahead of consumer inflation data due on Thursday. The U.S. producer price index for final demand increased 0.2% last month after slipping 0.1% in July. In the 12 months through August, the PPI rose 2.4% after rising 1.9% in July. The pound slipped from one-year highs against the dollar, falling 0.65% to $1.3196, as the latest UK labour market data showed that wage growth remained sluggish ahead of the Bank of England’s rate decision due Thursday. The EUR/USD fell 0.64% to $1.1890 while the EUR/GBP traded flat at £0.9010. The USD/JPY rose 0.30% to Y110.48 and the USD/CAD rose 0.11% to C$1.2199. The U.S. dollar index was up 0.62% at 92.46.

 
Commodity Round Up MarketsWorld Bars

Gold prices were lower on Wednesday for a third straight session, marking their lowest settlement for the month to date as a leading dollar index strengthened, adding to its gain for the week and dulling investment demand. Gold for December delivery fell $4.70 to settle at $1,328 an ounce, pulling back from an intraday high above $1,340. December silver fell 2.3 cents to settle at $17.867 an ounce.

Oil prices closed higher for a third straight session on Wednesday, with U.S. prices settling at a five-week high and Brent at its highest since April, buoyed by a report from the International Energy Agency that showed global crude production fell for the first time in four months in August. Traders also weighed weekly data from the U.S. government which revealed a smaller-than-forecast rise in crude supplies. October West Texas Intermediate crude for October delivery rose $1.07 to settle at $49.30 a barrel. November Brent rose 89 cents to settle at $55.16 a barrel.

The MarketsWorld Overview MarketsWorld Bars

In the U.K. the post-Brexit interest rate of 0.25% is highly likely to remain unchanged. However, with recent data showing inflation is rising it will be interesting to see if there are any shifts in the voting patterns. Two out of eight members voted for a rate hike in August. The fresh strengthening of sterling will likely alleviate pressures to hike rates in the near term.

 

 

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The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects Barry Jenkins’ (MarketsWorld Analyst) current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterized by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable. This message is intended for recipient only and not for further distribution without the consent of MarketsWorld.

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