Sterling hits highest level in almost eight months – Binary Options Daily Review

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Friday 19th May 2017
Prepared by Barry Jenkins, MarketsWorld Binary Options Analyst

 
Market Index Closing Level Move on day Intraday Market Range
CAC 5,289.73 – 28.16 5,238.51 – 5,322.70
DAX 12,590.06 – 41.55 12,490.00 – 12,634.30
Dow Jones 20,663.02 + 56.09 20,553.45 – 20,759.20
FTSE 7,436.42 – 67.05 7,389.26 – 7,503.68
IBEX 10,684.90 – 101.20 10,564.30 – 10,756.50

Closing Markets Summary

Dow Jones

Stocks in the US having initially opened lower on Thursday bounced to close higher, helped by a positive reading on jobless claims and a rally in technology stocks. Markets are likely to driven in the near term by the news coming out of Washington. Earlier on Thursday, Reuters reported that former National Security Adviser Michael Flynn and others on Trump’s campaign team exchanged at least 18 undisclosed phone calls or emails with Russian contacts during the 2016 presidential race. Equities were helped by the latest economic data. Initial jobless claims fell by 4,000 in the latest week, the second-lowest reading of the economic recovery, which began eight years ago. Continuing claims were at their lowest level since 1988. Separately, the Philadelphia Fed manufacturing index jumped to a reading of 38.8 in May from 22 in April. US-listed shares of Brazil stocks and exchange-traded funds were under pressure after the country’s opposition lawmakers called for President Michel Temer to resign after a bribery allegation. US-listed shares of Brazilian multinational Vale SA fell 6.8%, while the iShares MSCI Brazil Capped ETF fell 16%. Companies that featured included Alibaba Group Holding Ltd. Which eased 0.2% after earnings fell short of market forecasts. CarMax Inc. jumped 6.6% after Wedbush Securities raised their price target on the stock to $70. Incyte Corp. rose 7% and ImmunoGen Inc. rose 14% on promising results from an experimental lung cancer drug. Major technology stocks bounced following the selloff in the previous session with Apple Inc., Amazon.com Inc. and Facebook Inc. all up 1.5% or more on the day. Cisco Systems Inc. dropped 7.8% and hit their lowest level since January as the networking giant reported its revenue decline was accelerating and said it would lay off another 1,100 workers. The S&P 500 rose 8.69 points to close at 2,365.72. The Dow Jones closed up 56.09 points at 20,663.02. The Nasdaq Composite closed up 4389 points at 6,055.13.

Europe

European equity markets closed lower for a second consecutive session on Thursday as US political turmoil continues to cast doubt on whether President Donald Trump’s pro-economic growth policies will ever become a reality. The Pan-European Stoxx Europe 600 index closed down 0.5% at 389.19. Investors began avoiding assets perceived as risky, such as stocks on Wednesday after a report that Trump had asked James Comey, then director of the Federal Bureau of Investigation, to halt a probe into links between Trump’s associates and Russian officials. European bank shares were again struggling on concerns the Trump administration won’t be able to push through looser regulations for the financial industry. The Stoxx Europe 600 Bank was down 0.8%. European exporters were also under pressure from strength in the Euro, which this week rose above $1.11 for the first time since November. Economic data showed that France’s unemployment rate dropped to 9.6%, a five-year low, as the job market improved for young people. Companies that featured included Fiat Chrysler Automobiles NV which fell 3.1% after reports that the US Justice Department plans to file a civil lawsuit against the auto maker over excess diesel emissions, if no agreement is reached. Altice NV slipped 1.5% after the Dutch telecom broke European Union rules by carrying out its acquisition of PT Portugal before notifying or getting approval from regulators. On regional markets the CAC closed down 28.16 points at 5,289.73, the DAX closed down 41.55 points at 12,590.06 and the IBEX close down 101.20 points at 10,684.90.

FTSE

The FTSE closed solidly lower on Thursday as the Pound moved back above the $1.30 level for the first time in nearly eight months to comPound the ongoing selloff which was prompted by troubles surrounding US President Donald Trump’s administration. The index was down by as much as 1.5% intraday as the Pound climbed to $1.3048 after UK retail sales for April came in well ahead of forecasts. The stronger Pound puts pressure on foreign-denominated earnings made by the London listed multinational companies. Banks shares globally have booked gains on the prospect of looser regulatory rules for the financial industry. A slide in shares of financial companies on Wednesday led Wall Street’s decline. Economic data showed that April retail sales rose 2.3%, well above the forecasts of 1.2%. Year-over-year, sales climbed 4%, outstripping forecasts of 2% increase. Companies that featured included banking stocks with HSBC Holdings PLC down 1%, though Barclays PLC shook off an early fall to close 1.3% higher. Shire PLC rose 1.8% after the drug company reported positive results from a late-stage trial of a treatment for hereditary angioedema, a rare genetic disease that causes swelling of the extremities, gastrointestinal tract and upper airways. Burberry Group PLC gained 4.7% as the luxury-goods retailer said it was on target with its cost-savings program, backed its current-year forecasts and disclosed it’ll buy back an additional £300 million of shares. Royal Mail PLC rose 0.7% as the postal company posted a 25% rise in fiscal 2017 pre-tax profit. Experian PLC shares dropped 2% even as the provider of financial data and services posted an 11% rise in 2017 pre-tax profit. Experian also said that it is planning to buy back $600 million worth of shares. The FTSE closed down 67.05 points at 7,436.42.

Economic News Expected Today

 USA

Type Period Forecast Previous Importance
FOMC Member Bullard Speaks May     Medium
Initial Jobless Claims May 240K 236K Medium
Philadelphia Fed Manufacturing Index May 19.5 22.0 High
Bloomberg Consumer Confidence May   49.7 Low
CB Leading Index April 0.4% m/m 0.4% m/m Low
FOMC Member Mester Speaks May     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
CPI (Canada) April 0.4% m/m; 1.7% y/y 0.2% m/m; 1.6% y/y Medium
Core CPI (Canada) April 1.4% y/y 0.3% m/m; 1.3% y/y High
Retail Sales (Canada) March 0.4% m/m -0.6% m/m Medium
Core Retail Sales (Canada) March 0.2% m/m -0.1% m/m High

Economic News Round Up MarketsWorld Bars

The number of people who filed for unemployment assistance in the US last week fell, the US Department of Labor reported that the number of individuals filing for initial jobless benefits last week fell to a seasonally adjusted 232K, from 236K in the previous week. Initial jobless claims were forecast to rise to 240K last week. Manufacturing activity in the state of Philadelphia rose more than forecast last month, the Federal Reserve Bank of Philadelphia reported that the Philly Fed manufacturing index rose to a seasonally adjusted 38.8, from 22.0 in the previous month. The Philly Fed manufacturing index was forecast to rise 19.5 last month.

Retail sales in the UK bounced back in April the UK Office for National Statistics reported that retail sales rose 2.3% in April from the prior month, compared to the previous 1.4% decline which was revised from a previous drop of 1.8%. That was its largest gain since January 2016. April’s reading was forecast to increase by 1.0%. Year-on-year, retail sales increased 4.0% last month, compared to forecasts for growth of 2.1%. March’s reading was upwardly revised to 2.0% from the initial 1.7% advance. Core retail sales increased by 2.0% in April, compared to the prior 1.2% decline which was revised from an initial fall of 1.5%. Core retail sales were forecast to rise by 1.1% last month. Year-on-year, core retail sales rose 4.5% in April, compared to the previous month’s 2.8% increase (initially 2.6%) and the forecast for 2.5% advance.

Forex Round Up MarketsWorld Bars

The Dollar staged a modest bounce back on Thursday, aided by upbeat US data as political turmoil continues to overhang the White House. Initial jobless claims and the Philadelphia manufacturing index came in better than forecasts. Trump remained under pressure as the US Justice Department named a special counsel to probe alleged Russian interference in the US presidential election. Trump allegedly asked the FBI to drop a probe into former national security adviser Michael Flynn’s ties with Russia. The EUR/USD was down 0.30% at $1.1125, off a six-month peak of $1.1172 hit overnight.

The GBP/USD gained 0.29% to $1.3009, not far from an eight-month peak of $1.3048 hit earlier, after data showed that retail sales surged 2.3% in April, ahead of forecasts for a 1% increase and rebounding from a sharp 1.4% drop in March. In Japan data showed that Japan’s economy grew by 2.2% year-over-year in the first quarter, ahead of forecasts for growth of 1.7%. The USD/JPY was up 0.26% at ¥111.11.

The USD/CHF held steady at Fr0.9790. In Australia data showed that the number of employed people rose by 37,400 in April, ahead of forecasts for an increase of 5,000. The unemployment rate ticked down to 5.7% last month from 5.9% in March, forecasts were for an unchanged reading.

The AUD/USD was little changed at $0.7431. The NZD/USD was down 0.39% at $0.6916. The USD/CAD was steady at CAD$1.3597. The US Dollar Index was up 0.17% at 97.52, just off a fresh six-month low of 97.28 hit overnight.

 
Commodity Round Up MarketsWorld Bars

Gold prices settled lower on Thursday putting an end to their longest winning streak since August as investors looked again at riskier assets after stocks and the Dollar stabilized even though political uncertainty continued to surround the White House. Gold for June delivery fell $5.90 to settle at $1,252.80 per ounce. July silver fell $0.236 to settle at $16.67
per ounce.

Oil prices settled slightly higher on Thursday, adding to the previous session’s advance on upbeat US inventory data, but investors will be cautious ahead of an important OPEC meeting in Vienna to extend production limits. West Texas Intermediate crude rose $0.28 to settle at $49.35 per barrel. Brent crude rose $0.30 to settle at $52.51 per barrel, both contracts had been firmly lower earlier in session.

The MarketsWorld Overview MarketsWorld Bars

Economic data in Canada is expected to show an improvement in consumer inflation and retail sales. CPI in March remained at 0.2% below forecasts for 0.4%. Forecasts are for a strong pick up in the April reading with a 0.5% gain forecast. Retail sales posted a decline of 0.6% in February, below forecasts for a reading of 0.0%. Forecasts are for an improved reading of a 0.3% gain. Core retail sales declined 0.1% in February, an improvement of a 0.2% gain is forecast for March.

Monitor the Canadian Dollar for Binary Options trading.

 

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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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