Will Feds latest meeting minutes indicate one more U.S. rate rise this year; Monitor the U.S. dollar – Binary Options Daily Review

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Markets Report

Global Markets

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Wednesday 11th October 2017
Prepared by Barry Jenkins, MarketsWorld Binary Options Analyst

 
Market Index Closing Level Move on day Intraday Market Range
CAC 5,363.65 – 2.18 5,351.79- 5,372.27
DAX 12,949.25 – 27.15 12,909.30 – 12,980.50
Dow Jones 22,830.68 + 69.61 22,770.99 – 22,850.51
FTSE 7,538.27 + 30.38 7,504.56 – 7,543.88
IBEX 10,142.30 – 93.70 10,107.80 – 10,225.00

Closing Markets Summary

Dow Jones

Stocks in the U.S. closed slightly higher on Tuesday with the Dow Jones recording its 47th all-time high of 2017, helped by gains in consumer-staples shares, highlighting investor optimism ahead of earnings season. Consumer staples was among the best gaining sectors, buoyed by Wal-Mart Stores Inc. which rose 5.3%, at an investor meeting the company said it would continue its strategy of focusing on domestic existing stores and e-commerce growth to boost sales. Investors were also looking ahead to two main events this week in the release of the September FOMC meeting minutes and the start of third quarter earnings season. The International Monetary Fund lifted its forecast for global growth but also warned of downside risks going forward. The IMF called on China to take more step to curb its credit growth, and for a “concentrated effort” to clean up the balance sheets of European banks. In the latest economic data, sentiment among small-business owners fell in September as expectations for sales and economic growth dropped. Companies that featured included Procter & Gamble Co. which fell 1.1%, at the annual general meeting, a proxy vote among shareholders resulted in all of the company’s directors being re-elected, meaning that activist investor Nelson Peltz wasn’t named a director. Nvidia Corp. rose 1.9% after the graphics chip maker unveiled new hardware to be used in self-driving taxis. The stock, which has nearly tripled over the past 12 months, hit an all-time high. KalVista Pharmaceuticals Inc. jumped 44% after Merck & Co. bought a 9.9% ownership stake in the company, paying $8.50 a share. The stock closed Monday at $7.35. The Dow Jones closed up 69.61 points at 22,830.68. The S&P 500 closed up 5.91 points at 2,550.64. The Nasdaq Composite closed up 7.52 points at 6,587.25.

Europe

European equity markets closed slightly lower on Monday as investors took a cautious approach as tensions continued between Catalonia and Madrid. The Pan-European Stoxx 600 index closed down 0.01% at 390.16. The Catalan President Carles Puigdemont was due to give a speech after the close of equity markets. The speech could possibly be the point at which the leader will declare Independence for Catalonia after more than 90% of voters supported a split from Spain. The central Government in Spain declared the vote Illegal and unconstitutional. Economic data in the euro zone showed that German trade activity picked up in August as exports outpaced imports, widening the surplus and adding to evidence that Europe’s biggest economy performed strongly in the third quarter. Seasonally adjusted exports rose by 3.1% on the month while imports were 1.2% up. The German government is going to raise its 2017 growth forecast for Europe’s biggest economy to 2.0 percent, a sharp increase from its earlier estimate of 1.5 percent and the strongest rate since 2011, according to a news report. On regional markets the French CAC closed down 2.18 points at 5,363.65, the German DAX closed down 27.15 points at 12,949.25 and the Spanish IBEX closed down 93.70 points at 10,142.30.

FTSE

The FTSE 100 closed higher on Tuesday, with banks among biggest gainers following a broker upgrade. The index outperformed the wider European market which was weighed down by tensions between Catalonia and Madrid. Royal Bank of Scotland Group PLC rose 2% and Lloyds Banking Group PLC rose 0.8% after both were upgraded by Credit Suisse. The IMF on Tuesday cut its 2017 U.K. growth forecast to 1.7% from 2%. The U.K. was a “notable exception” among other advanced economies that saw a pickup in activity in the first half of the year from the second half of 2016. “The medium-term growth outlook is highly uncertain and will depend in part on the new economic relationship with the EU and the extent of the increase in barriers to trade, migration, and cross-border financial activity,” the IMF said in its World Economic Outlook report. The IMF downgrade comes after the OECD on Monday also said the U.K. economy is continuing to show signs of easing growth at a time when other economies, including the euro zone, the U.S. and Japan, are showing stable growth momentum. Sterling rose to 1.3213 after the Office for National Statistics reported that August figures on industrial and manufacturing production. Manufacturing production rose 2.8% on a year-over-year basis, outstripping forecasts of a 1.9% increase. Industrial production rose 1.6% year-over-year, above a forecast of 0.9%. The U.K. trade deficit in goods widened in August, largely on an increase in imports of mechanical machinery and a drop in fuel exports. Companies that featured included Capita PLC which rose 1.3% after the outsourcing and professional services company named Jonathan Lewis as its new chief executive officer, effective Dec. 1st. BAE Systems PLC fell 0.3% as the defence contractor said it plans to cut roughly 2,000 jobs in a bid to lower costs. About 1,400 losses would come from the military aircraft division that makes Typhoon combat jets and Hawk training planes. Sky PLC dropped 0.2% after the U.K. Competition Authority said it plans to examine how the proposed takeover of Sky by 21st Century Fox Inc. would affect media plurality and broadcasting standards in the U.K. The FTSE 100 closed up 30.38 points at 7,538.27.

Economic News Expected Today

 USA

Type Period Forecast Previous Importance
FOMC Member Kaplan Speaks Oct     Medium
MBA 30 Year Mortgage Rate Oct   4.12% Low
OPEC Monthly Report Oct     Medium
Chicago Fed President Evans Speaks Oct     Low
JOLT’s Job Openings August 6.138M 6.170M High
FOMC Meeting Minutes Oct     High
FOMC Member Williams Speaks Oct     Medium

Economic News Expected Today

EU  Eurozone

Type Period Forecast Previous Importance
CPI (Spain) Sept 0.2% m/m; 1.8% y/y 0.2% m/m; 1.8% y/y Medium
Non-Farm payrolls (France) Q3   0.4% q/q Low
ECB’s Praet Speaks (euro zone) 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
Westpac Consumer Sentiment (Australia) Oct   2.5% Medium

Economic News Round Up MarketsWorld Bars

German trade activity picked up in August as exports outpaced imports, widening the surplus and adding to evidence that Europe’s biggest economy performed strongly in the third quarter. Seasonally adjusted exports rose by 3.1% on the month while imports were 1.2% up.

Manufacturing production in the U.K. came in ahead of forecasts in August, the UK Office for National Statistics reported that manufacturing production rose 0.4% in August from the prior month, compared to forecasts for a 0.2% rise and following a rise of 0.4% the prior month. On an annualized basis, manufacturing production rose 2.8% in August, ahead of forecasts for a 1.9% gain and after increasing at a rate of 2.7% in the previous month. Industrial production advanced by a seasonally adjusted 0.2% in August, in line with forecasts and compared to a 0.3% increase in the preceding month. Year-on-year, industrial production rose by 1.6% in August, ahead of forecasts and following the 1.1% advance a month earlier. The trade balance fell by £14.24 billion in August. Forecasts were for the balance to fall by £11.20 billion, compared to a decrease of £12.38 billion the month prior. Non-EU trade was down £5.38 billion, compared to a fall of £5.34 billion the prior months and beating forecasts of a decrease of £3.60 billion.

The number of building permits issued in Canada fell more than forecast in August, Statistics Canada reported that Canadian building permits decreased to a seasonally adjusted 5.5% month-over-month compared to a fall 2.8% in July, which was revised from a decline of 3.5%. Forecasts were for Canadian building permits to fall 1.0%.

Forex Round Up MarketsWorld Bars

The U.S. dollar was lower against other major currencies on Tuesday, as a number of geopolitical concerns continued to dominate market sentiment. Investors remained cautious following reports last week that North Korea was preparing a long-range missile test. There were concerns that Pyongyang could mark Tuesday, when it celebrates the founding of its ruling party, with some sort of provocation. Diplomatic tensions between the U.S. and Turkey persisted following the suspension of visa services between the two countries, while Iran vowed a “crushing” response should Washington deem the Revolutionary Guards a terrorist group. In Spain, the ruling Spanish Partido Popular warned Catalan leader Carles Puigdemont on Monday that he could be thrown in jail if he followed through with a planned declaration of independence on Tuesday. The safe-haven yen and Swiss franc were both firmer with the USD/JPY down 0.56% at 112.03 and the USD/CHF was down 0.61% at 0.9737. The EUR/USD was up 0.65% at 1.1816. The GBP/USD was up 0.58% at 1.3217 after data showed that UK manufacturing activity increased more than forecast in August. The Australian and New Zealand dollars were both stronger with the AUD/USD up 0.54% at 0.7794 and the NZD/USD was up 0.23% at 0.7082. The USD/CAD was down 0.45% at 1.2494. The U.S. dollar index was down 0.62% at 92.98.

 
Commodity Round Up MarketsWorld Bars

Gold and silver prices ended higher on Tuesday, hitting two-week highs. Raised geopolitical tensions this week have prompted more safe-haven demand for gold, and to a lesser degree silver. A weaker U.S. dollar against the other major currencies this week has also a benefitted the precious metals markets. December gold was up $7.70 an ounce at $1,292.70. December silver was up 21.4 cents at $17.185 an ounce.

Oil prices rose on Tuesday to finish at their highest level in more than week on talk of progress toward a more balanced market from OPEC, Saudi Arabia’s pledge to cut exports and a hurricane-induced slowdown in U.S. production. November West Texas Intermediate crude rose $1.34 to settle at $50.92 a barrel. December Brent crude rose 64 cents to $56.48 a barrel.

The MarketsWorld Overview MarketsWorld Bars

In the September meeting the Federal Reserve announced the beginning of reducing its balance sheet, as was widely expected. They also left their rate hike projections unchanged for 2017, with one more rate rise expected this year and three rises pencilled in for next year. The Fed also indicated their eagerness to continue raising rates despite slower inflation, something that Fed Chair Yellen described as a “mystery”. The minutes from that meeting are released now, and investors will be looking to see how worried the Fed are about the low inflation. It is important to note that the text is edited until the very last minute, leaving room for sending the desired message to markets.

 

 

 

 

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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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