Sterling falls as latest Brexit talks end in stalemate – Binary Options Daily Review

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Markets Report

Global Markets

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Friday 13th October 2017
Prepared by Barry Jenkins, MarketsWorld Binary Options Analyst

 
Market Index Closing Level Move on day Intraday Market Range
CAC 5,360.81 – 1.60 5,342.69- 5,361.92
DAX 12,982.89 + 12.21 12,945.07 – 13,002.34
Dow Jones 22,841.01 – 31.88 22,821.13 – 22,884.82
FTSE 7,556.24 + 22.43 7,526.33 – 7,565.11
IBEX 10,275.90 – 2.50 10,244.80 – 10,304.00

Closing Markets Summary

Dow Jones

Stocks in the U.S. closed lower on Thursday, pulling back from the record highs set in the previous session as investors digested the first of a batch of third-quarter corporate results from the banking sector, with J.P. Morgan Chase & Co. and Citigroup Inc kicking the earnings season off. Economic data showed that initial weekly jobless claims fell by 15,000 to 243,000 in early October to mark the lowest level in six weeks. Forecasts were for claims to total 250,000. The producer-price index rose 0.4%, matching consensus expectations. Federal Governor Jerome Powell, speaking to the annual meeting of the Institute of International Finance, said emerging markets should be able to withstand the Fed’s tightening initiatives, which could boost the dollar. He also described asset prices as “elevated.” Ex-Fed Chairman Ben Bernanke said the central bank should adopt “temporary” price-level targeting when interest rates next get stuck at zero, speaking at the Peterson Institute for International Economics on Thursday. Companies that featured included which eased 0.7% after reporting earnings and revenue that came in ahead of market forecasts, although its trading revenue was weak amid a quiet period for markets. Citigroup lost 2.5% after reporting a higher than forecast profit. Both J.P. Morgan and Citigroup have been strong performers over the past year; J.P. Morgan is up 41% and Citigroup has gained more than 50% over the past 12 months. Domino’s Pizza Inc. fell 4.1% despite reporting earnings and sales that came in ahead of market forecasts. Health-care stocks were mixed after President Donald Trump signed an executive order directing federal agencies to consider expanding health-insurance coverage in low-cost plans that aren’t subject to Affordable Care Act rules, a move that could raise costs for sicker people. The order is designed to provide what the White House calls “alternatives” to plans offered through Obamacare markets. Cigna Corp. and Humana Inc. were higher while Aetna Inc. and UnitedHealth Group Inc. fell. CarGurus Inc. soared 76% on its Nasdaq debut after pricing shares of its initial public offering above an expected range. The company helps buyers find deals on new and used cars. The Dow Jones closed down 31.88 points at 22,841.01. The S&P 500 down 4.31 points at 2,550.93 and the Nasdaq Composite closed down 12.04 points at 6,591.51.

Europe

European equity markets closed little changed on Wednesday and Spanish stocks closed fractionally lower after the prior day’s rally that was sparked by worries abating over Catalonia’s independence push. The pan-European Stoxx Europe 600 index closed less than 0.1% higher at 390.28. Spain’s IBEX 35 index fell less than 0.1% as the market waited on the latest political moves over the Catalan independence saga. Economic data showed that euro zone industrial output rose 1.4 percent in August month on month and by 3.8% year on year, the monthly rate was the highest rise since November 2016. There was also an upward revision of the July data, to 0.3 percent from 0.1 percent in the month and to 3.6 percent year-on-year from the 3.2 percent initially estimated. Companies that featured included Just Eat PLC which rose 6.5% for the Stoxx Europe 600’s biggest gain after the food-delivery service scored a regulatory OK for its planned buyout of rival Hungryhouse. Deutsche Lufthansa AG rose 2.3% after Bernstein analysts in a note raised their rating for the Germany airline to “outperform” from “market perform,” saying “positive catalysts are mounting.” Encouraging developments include market consolidation in Germany and a deal with pilots that should reduce pension risks. Insolvent carrier Air Berlin PLC said that it had agreed to sell parts of its business to Lufthansa for $248.5 million, in a deal that the market had been anticipating. On regional markets the French CAC closed down 1.60 points at 5,360.81, the German DAX closed up 12.21 points at 12,982.89 and the Spanish IBEX closed down 2.50 points at 10,275.90.

FTSE

The FTSE 100 closed higher on Thursday to close at a record high, helped by a drop in the pound that came on news of a stalemate in Brexit talks. The FTSE has been rising towards the record recently as the pound has weakened and by renewed confidence that Prime Minister Theresa May can hold on to cabinet support for her plans to take the U.K. out of the European Union. The pound on Thursday fell to 1.3172 against the dollar from 1.3223 late Wednesday in New York, as traders worried over the lack of progress in divorce talks with the EU. Michel Barnier, the EU’s chief Brexit negotiator, said on Thursday that not enough progress had been made to recommend talks move on to the future trade relationship between the EU and U.K. Companies that featured included Sky PLC which was among the main gainers, rising 1.4% as Europe’s biggest pay-TV company posted an 11% gain in a key profit metric for the first quarter of fiscal 2018. Sky said new subscriptions were up 51% on the year and it is on track to meet its full-year targets. Standard Chartered PLC’s fell 0.9%, after the International Monetary Fund in its twice-yearly Global Financial Stability Report, said the Asia-focused bank has a “weak earnings” outlook. Credit Suisse analysts also have warned the lender’s current valuation is too generous. Just Eat PLC which rose 6.5% after the food-delivery service scored a regulatory OK for its planned buyout of rival Hungryhouse. The FTSE 100 closed up 22.43 points at 7,556.24.

Economic News Expected Today

 USA

Type Period Forecast Previous Importance
CPI Sept 0.6% m/m; 2.3% y/y 0.4% m/m; 1.9% y/y Medium
Core CPI Sept 0.2% m/m; 1.8% y/y 0.2% m/m; 1.7% y/y High
Retail Sales Sept 1.7% m/m -0.2% m/m High
Core Retail Sales Sept 0.3% m/m 0.2% m/m High
FOMC Member Rosengren Speaks Oct     Medium
Business Inventories August 0.7% m/m 0.2% m/m Medium
Michicgan Consumer Sentiment Oct 95.0 95.1 Medium
Chicago Fed President Evans Speaks Oct     Low
Cleveland CPI Sept   0.2% m/m Low
FOMC Membern Kaplan Speaks Oct     Medium
FOMC Member Powell Speaks Oct     Medium

Economic News Expected Today

EU  Eurozone

Type Period Forecast Previous Importance
CPI (Germany) Sept 0.1% m/m; 1.8% y/y 0.1% m/m; 1.8% y/y Medium
CPI (Italy) Sept -0.3% m/m; 1.1% y/y -0.3% m/m; 1.1% y/y Medium
ECB’s Constancio Speaks Oct     Medium

Economic News Expected Today

UK United Kingdom

Type Period Forecast Previous Importance
No Data        

Other Global Economic Data Expected

 

Type Period Forecast Previous Importance
RBA Financial Stability Review (Australia) Oct     Medium
Trade Balance (China) Sept 39.50B 41.99B Medium
PPI (Switzerland) Sept 0.3% m/m; 0.6% y/y 0.3% m/m; 0.6% y/y Medium

Economic News Round Up MarketsWorld Bars

Euro zone industrial output rose more than forecast and at its highest rate in nine months in August as production of capital goods rose sharply. Eurostat reported that overall output rose 1.4 percent in August month-on-month and by 3.8 percent year-on-year. The figures were well ahead of forecasts for a 0.5 percent month-on-month increase and a 2.6 percent year-on-year rise. The monthly rate was the highest rise since November 2016. There was also an upward revision of the July data, to 0.3 percent from 0.1 percent in the month and to 3.6 percent year-on-year from the 3.2 percent initially estimated.

U.S. producer prices rose in September as the price of gasoline recorded its biggest increase in more than two years amid production disruptions at oil refineries in Texas caused by Hurricane Harvey. The Labor Department reported that its producer price index for final demand increased 0.4 percent last month after rising 0.2 percent in August. In the 12 months through September, the PPI rose 2.6 percent. That was the biggest gain since February 2012 and followed a 2.4 percent jump in August. Wholesale gasoline prices soared 10.9 percent in September after increasing 9.5 percent in August. The increase was the largest since May 2015. Forecasts were for PPI gaining 0.4 percent last month and accelerating 2.5 percent from a year ago.

In the U.S. the number of people who filed for unemployment assistance last week fell more than forecast. The U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending October 6th declined by 15,000 to a seasonally adjusted 243,000 from the previous week’s revised total of 258,000. Forecasts were for jobless claims to fall by 7,000 to 251,000. Continuing jobless claims in the week ended October 6th fell to 1.889 million from 1.921 million in the previous week. The four-week moving average was 257,500, up 9,000 from the previous week.

Forex Round Up MarketsWorld Bars

The U.S. dollar was higher against other major currencies on Thursday, as the release of upbeat U.S. data boosted optimism over the strength of the economy and as investors turned their attention to Friday’s U.S. consumer price inflation report. The dollar strengthened after the U.S. Department of Labor reported on Thursday that initial jobless claims fell more than forecast to 243,000 last week. Producer prices increased 0.4% in September, in line with forecasts. Core producer prices also rose 0.4%, beating forecasts for a 0.2% rise. EUR/USD was down 0.13% at 1.1844, off a two-week high of 1.1880 hit earlier in the session. The GBP/USD was down 0.42% at 1.3164 after European Union chief negotiator Michel Barnier announced on Thursday that Brexit talks were at an “impasse”. Barnier added that the U.K. had told the EU that it wasn’t ready to specify how much the nation should pay in exit fees. The yen remained higher with the USD/JPY was down 0.13% at 112.35 and the USD/CHF was up 0.21% at 0.9755. The Australian and New Zealand dollars were both stronger with the AUD/USD up 0.37% at 0.7817 and the NZD/USD was up 0.51% at 0.7114. The USD/CAD was up 0.15% at 1.2476. The U.S. dollar index was up 0.18% at 92.96.

 
Commodity Round Up MarketsWorld Bars

Gold prices settled higher on Thursday, just below the key $1,300 level but at the highest in more than two weeks, as investors read minutes from the Federal Reserve’s September policy meetings as slightly dovish. December gold rose $7.60 to settle at $1,296.50 an ounce, after trading as high as $1,299.80. Silver for December delivery rose 13.3 cents to settle at $17.266 an ounce.

Crude oil prices settled lower on Thursday as a bearish outlook on global oil demand for 2018 offset data showing U.S. crude oil stockpiles fell for the third-straight week. Inventories of U.S. crude fell by roughly 2.8m barrels in the week ended Oct. 6th, beating forecasts for a draw of 2m barrels. West Texas Intermediate crude futures for November delivery fell by 70 cents to settle at $50.60 a barrel. December Brent fell 66 cents to settle at $56.28 a barrel.

The MarketsWorld Overview MarketsWorld Bars

In the U.S. low inflation is a “mystery” to the Fed. With continued gains in employment, inflation should have risen a long time ago. In August headline CPI prices rose by 0.4% but core CPI only managed 0.2% , core CPI is more important to the Fed. Year over year, core CPI remains stuck at 1.7%, after having topped 2% earlier in the year. Headline CPI is expected to rise by 0.6% this time, while core CPI by only 0.2%.

 

 

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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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