U.S. Data on GDP and Inflation Awaited, ECB’s Forum on Central Banking Draws Attention

U.S. shares were mixed after the close on Friday thanks to a rebound in oil prices and upbeat data on new home sales that eased concerns over a slowdown in the housing market. At the close in NYSE, only the Dow Jones Industrial Average declined 0.01%, the S&P 500 index and the NASDAQ Composite index gained 0.16% and 0.46%, respectively.

According to the Commerce Department, new home sales in the U.S. increased 2.9% on a monthly basis to 610,000 units last month. While the reading beat analysts’ expectation for a rise to 599,000 units in May, April’s sales pace was revised sharply higher to 593,000 units from 569,000 units.

However, the dollar witnessed its largest one day decline in three weeks versus a basket of the other major currencies on Friday. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, shed 0.37% at 96.98 late Friday after St. Louis Federal Reserve President James Bullard said that the U.S. central bank should be less aggressive on raising rates while assessing how the economy is progressing.

In the week ahead, investors will be closely watching final data on first-quarter economic growth published by the U.S. Bureau of Economic Analysis on Thursday. The figure is expected to show that the world’s largest economy expanded at a 1.2% annual rate in the first three months of 2017. If confirmed, the final figure will be unchanged from a preliminary estimate.

Before Thursday’s GDP report, market watchers will also be awaiting data on durable goods orders due to be released on Monday, Consumer Confidence on Tuesday and pending home sales on Wednesday. On Friday, the Bureau of Economic Analysis is scheduled to publish figures on personal income and spending, which includes the personal consumption expenditures inflation data. These are Fed’s preferred metric for inflation.

In addition to economic data, remarks by Fed Chair Janet Yellen at the British Academy’s 2017 President’s Lecture in London on Tuesday will also be awaited as markets will be looking for fresh indications on the timing of further rate hikes and signals on Fed’s plans to shrink its massive balance sheet.

Despite of a steep jump on Friday, the Euro failed to close the whole week higher versus the dollar. On Monday, European Central Bank President Mario Draghi and Former Federal Reserve Chair Ben Bernanke are to open the ECB’s annual forum on central banking in Sintra, Portugal.

The two-day “Forum on Central Banking” will focus on investment and growth in advanced economies with the attendance of approximately 150 central bank governors, academics, financial journalists and high-level financial market representatives.

Markets will pay attention to Wednesday’s panel discussion including Draghi, Bank of England Governor Mark Carney, Bank of Japan Governor Haruhiko Kuroda and Bank of Canada Governor Stephen Poloz for any clues on the timing of when the world’s biggest central banks plan to start winding down their monetary stimulus and begin normalizing policy.

Besides the ECB’s forum, the euro zone will publish flash inflation figures for June on Friday which is expected to show consumer prices rose 1.2% in the reported period. This would be a slowdown from a gain of 1.4% in May. Meanwhile, core prices are anticipated to increase 1.0%, 0.1 percent higher than a rise of 0.9% in the prior month.

On Friday, the China Federation of Logistics and Purchasing is to release data on June manufacturing sector activity. Economists expect a modest decline to 51.0 from 51.2 in the preceding month.

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Loonie Holds on Gains Versus Dollar As Oil Rebounds From 10-month Lows

Canadian dollar continued to gain ground versus its American counterpart on Friday after having surged sharply in the previous session. While the greenback dipped to a four-day low against major currencies, the commodity-linked currency, the loonie, held on gains as crude price rebounded.

The pair USDCAD dipped 0.1 percent to trade around 1.3222 in the last session of the week after losing 0.75 percent on Thursday, paring most of its weekly gain.

The U.S. dollar remained weak against most of its rivals ahead of a handful of Fed policymakers that are scheduled to make public appearances later in the day. St. Louis Fed President James Bullard, Cleveland Fed President Loretta Mester and Fed Governor Powell are scheduled to deliver comments on Friday with investors awaiting clues on the likelihood of higher interest rates in the coming months.

The dollar index – which measures the greenback against a basket of six major currencies – lost more than 0.2 percent to trade around 97.33 in European trading session. Next week, U.S. calendar features data on June consumer confidence indicator, pending home sales, crude oil inventories, revised first quarter GDP and the PCE price index.

Meanwhile, crude oil futures prices scaled back from 10-month lows which they hit on Wednesday, adding strength to the Canadian dollar which has already been spurred by upbeat data on April retail sales. Brent crude futures added 0.51 percent while U.S. West Texas Intermediate (WTI) crude futures jumped 0.54 percent, at $42.80 per barrel.

Trade suggestion

Sell Stop at 1.32100, Take profit at 1.32700, Stop loss at 1.32300

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Canadian Dollar Rallies Verus the Greenback after April Retail Sales Beat Forecast

The Canadian dollar rallied against its American counterpart in North American trading on Thursday after a report showed retail sales in the country grew at a faster pace than expected in April.

The currency pair USDCAD dropped more than 0.8 percent to trade around C$1.320 per dollar, reversing lower after heading upwards for three days in a row. The loonie jumped sharply higher after Statistics Canada on Thursday reported that retail sales rose 0.8 per cent in April compared to the previous month.  The result topped analysts’ expectations for a 0.2 percent gain on a monthly basis and also beat the 0.5 per cent advance recorded in March.

Core retail sales, which exclude auto and car parts related sales, were reported to soared 1.5 percent during the period. Upbeat April’s reading not only marked a reversal into an uptrend after a drop of 0.1 percent in March but also helped bolster optimism over the economy and strengthen the case of the Bank of Canada raising interest rates.

Trade suggestion

Sell Stop at 1.32200, Take profit at 1.32700, Stop loss at 1.32400

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oracle

Shares of Oracle Take Off 10% After Upbeat Fiscal Q4 Earnings Report and Rosy Outlook for 2018

Shares of Oracle Corp. jumped sharply more than 10 percent in after-hours trading on Wednesday after the Redwood Shores, California-based company reported its fiscal fourth-quarter earnings that beat expectations.

For the final quarter in its 2017 fiscal year, the computer technology corporation posted net income of $3.23 billion, or 76 cents a share. Adjusted for one-time items, the software giant reported profit of 89 cents a share on sales of $10.89 billion, which topped analysts’ forecast for earnings of 78 cents a share on revenue of $10.46 billion.

Shares of Oracle soared 10.3 percent to trade at $51.10 per share after closing the regular trading session 1.07 percent higher. After two years witnessing declines in profit and revenue, Oracle posted full-year revenue growth of 1.8% and profit growth of 4.9%.

Growth in the current fiscal quarter, which began June 1, is anticipated to jump even more which may boost full-year sales to growth at the pace from 4% to 6%.

Larger-Than-Expected Decline in U.S. Supplies Fails To Support WTI Crude Futures

U.S. crude futures price reversed lower after having briefly spiked following U.S. government data that showed domestic crude supplies fell more than expected.

August West Texas Intermediate crude lost around 0.1 percent in North American trading session after having jumped to as high as $44.170 per barrel. Data released by the U.S. Energy Information Administration on Wednesday showed U.S. crude stockpiles fell by 2.5 million barrels for the week ended June 16, topping analysts’ expectation calling for a decline of 2 million barrels.

However, EIA’s data failed to support the price due to rising concerns over a renewed glut in global supply. U.S. explorers have been boosted the number of rigs drilling for oil. Indeed, the U.S. oil rig count was reported to continue to rise, up by 6 last week.

The rise extended the upward rally to a 22nd in a row, adding concerns over high global supplies despite an OPEC-led initiative to cut production to tighten the market.

Trade suggestion

Sell Stop at 43.300, Take profit at 42.700, Stop loss at 43.600

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Adobe Systems

Shares of Adobe Systems Jump to All-time Record High After Upbeat Q2 Earnings Report

Shares of Adobe Systems Inc. jumped more than 4 percent ahead of the opening bell on Wednesday after the company reported last quarter’s earnings results that beat expectation late Tuesday.

Shares of the American multinational computer software company jumped to all-time record high of $147.00 per shares in pre-market trading on Wednesday after having closed the regular session with a 0.4% increase at $140.91 on Tuesday.

Adobe Systems reported earnings per share (EPS) of $1.02 on sales of $1.77 billion for its fiscal second quarter, which was above the Wall Street consensus estimate of $0.95 for EPS and of $1.73 billion for sales. Revenues rose 26.7% from the same quarter last year.

The San Jose, CA-based software giant claimed net income of $374.4 million, or 75 cents a share for the last quarter. Adobe forecast EPS of around $1.00 and revenues of $1.815 for the current quarter, which topped Wall Street estimates of $0.97 for Q3 EPS and $1.8 billion for revenues.

Trade suggestion

Buy Stop at 147.000, Take profit at 148.000, Stop loss at 146.500

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us-japan-1

Japanese Yen Tumbles to One-month Lows Versus Dollar after Dudley’s Hawkish Comments

Japanese Yen plunged to nearly one-month lows on Tuesday as U.S. dollar was broadly stronger versus most of its peers. Meanwhile, Asian shares advances with Japan’s Nikkei rising more than 1 percent to a near two-year high on Tuesday, causing investors to pour into risky assets instead of playing safe with the safe-haven currency like Yen.

Encouraged by rebound in U.S. hi-tech shares which helped the Nasdaq 100 Index jumped the most since November, equity rally extended to Asia. The Yen dropped more than 0.2 percent against its American counterpart to trade around 111.700 after hitting 111.775 at one point – the lowest level since May 26th.

Hawkish comments from a Federal Reserve official also helped ease concerns over the strength of the world’s largest economy. Speaking on Monday, New York Fed President William Dudley said that tightening in the labour market that would boost wages should help drive up inflation.

Dudley’s comments did not only reinforce the message from last week’s Fed meeting but also supported expectations for the U.S. central bank to keep raising interest rates in the coming months.

Trade suggestion

Buy Stop at 111.700, Take profit at 112.100, Stop loss at 111.500

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gold

Global Shares Advance, Dow Hits Record, Gold Hovers Near One-month Lows

Gold futures prices traded lower on Monday as stock markets in the U.S. followed strength across global equities which witnessed gains in European and Asian benchmarks.

Gold futures for August delivery dropped 0.5 percent to trade around $1250.00 per ounce – hovering near one-month lows recorded last Friday. The precious metal extended its downward rally to the fourth day in a row and experienced losses in eight out of the last nine sessions.

All three major U.S. stock benchmarks soared on Monday with the Dow hitting a record as technology shares rebounded from a recent bout of sharp weakness. The Dow Jones Industrial Average jumped nearly 0.5 percent, hitting an all-time high of 21,490.00. The S&P 500 SPX jumped nearly 0.7 percent while the the Nasdaq Composite Index edged more than 1 percent higher.

Trade suggestion

Sell Stop at 1248.00, Take profit at 1243.00, Stop loss at 1250.00

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FTSE 100

Led by Gains in Commodity and Retail Shares, FTSE 100 Trades Higher

U.K. shares climbed on Monday with broad-based gains led by commodity shares and retailers. The stock benchmark index FTSE 100 added more than 0.6 percent after hitting an intra-day high at 7527.95 as gains were encountered by a strong British Pound.

All sectors gained on London Stock Exchange, led by oil and gas and consumer-goods shares. Miners Anglo American PLC and Rio Tinto PLC topped the market. While the former jumped 1.61 percent, the latter moved up 1.4%.

Retail shares recovered after a selloff in the previous session. Shares of J Sainsbury PLC and Marks & Spencer Group PLC jumped around 2 percent each.

The British pound held on gains on Monday. Investors are eagerly awaiting the start of Brexit negotiations between Britain and the European Union in Brussels on Monday, kicking off a two-year divorce process due to end by March 2019. Key subjects to be negotiated include how the U.K. will trade with the EU once it leaves the bloc and the status of EU nationals and Britons living elsewhere in the EU.

Trade suggestion

Buy Stop at 7515.00, Take profit at 7545.00, Stop loss at 7500.00

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Brexit Talks to Start Next Week, Federal Reserve Officials Make Public Appearances

U.S. shares were mixed after the close on Friday. At the close NYSE, while the Dow Jones Industrial Average and the S&P 500 index added 0.11% and 0.03%, respectively, the NASDAQ Composite index declined 0.22%.

Meanwhile, the U.S. dollar lost ground against a basket of the other major currencies on Friday, weighed down by weak U.S. housing and consumer sentiment data. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.3% to end at 97.14 by late Friday. The index declined 0.1% on a weekly basis.

According to the U.S. Census Bureau, U.S. homebuilding fell for a third straight month in May to the lowest level in eight months. Building permits were reported to fell 4.9 percent last month to a pace of 1.17 million units, the lowest level since April 2016. Meanwhile, housing starts dropped 5.5 percent to a seasonally adjusted annual rate of 1.09 million units.

In a separate report, the University of Michigan said its consumer sentiment gauged fell to 94.5 in early June from 91.1 in May. The result fell short of analysts’ expectations calling for a reading of 97.1. The greenback previously soared to a more than two-week highs on Thursday after the Federal Reserve raised interest rates as widely expected.

In the week ahead, a handful of Fed policymakers are scheduled to make public appearances that may offer insight into the likelihood of higher interest rates in the coming months. While New York Fed President William Dudley and Chicago Fed President Charles Evans are due to make a speech on Monday, Fed Vice Chair Stanley Fischer, Boston Fed President Eric Rosengren and Dallas Fed President Rob Kaplan are scheduled to deliver comments on Tuesday.

Fed Governor Jay Powell is due to speak before the Senate Banking Committee on Thursday before St. Louis Fed President James Bullard, Cleveland Fed President Loretta Mester and Fed Governor Powell make public remarks on Friday.

Besides Fed’s officials’ public appearances, U.S. data also features report on existing home sales for May scheduled to be released by the National Association of Realtors on Wednesday. Analysts forecast a decline of 0.7% to 5.55 million, following a slump of 2.3% a month earlier. On Friday, the Commerce Department is to publish a report on new home sales for May which is expected to show an increase of 5.5% to 600,000, following a drop of 11.4% in April.

In Europe, market players eagerly await the start of Brexit negotiations between Britain and the European Union in Brussels on Monday, kicking off a two-year divorce process due to end by March 2019. Key subjects to be negotiated include how the U.K. will trade with the EU once it leaves the bloc and the status of EU nationals and Britons living elsewhere in the EU.

Meanwhile, the euro zone is to publish preliminary data on manufacturing and service sector activity for May on Friday. Economists expect a modest decline.

In Canada, April retail sales figures will be published on Thursday April retail sales figures while core sales are anticipated to climb 0.7%, after falling 0.2% a month earlier. Data on May consumer price inflation will come out on Friday. Markets expect the report to show that inflation increased 0.3% last month, extending the uptrend after having risen 0.4% in April. On a yearly base, CPI is projected to climb 1.5%.

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