Polish equity market closed lower on Friday. The broad market measure, the WIG index, fell by 0.77%. The WIG sub-sector indices were mixed. Media (+1.35%) outperformed, while banking sector (-1.20%) lagged behind.

The large-cap stocks' measure, the WIG30 Index, dropped by 0.78%. In the WIG30, clothing retailer LPP (WSE: LPP), led the underperformers with a 3.37% decline, followed by FMCG-wholesaler EUROCASH (WSE: EUR) and four banking names MILLENNIUM (WSE: MIL), PEKAO (WSE: PEO), ALIOR (WSE: ALR) and PKO BP (WSE: PKO), tumbling by 1.78%-2.99%. On the plus side, bank BZ WBK (WSE: BZW) and agricultural producer KERNEL (WSE: KER) were the biggest advancers, climbing by 2.57% and 2.03% respectively.

Major U.S. stock-indexes little changed on Friday as investors cashed in after the post-election rally, but the three major indexes continued to hover near record levels. The Nasdaq hit a record high earlier in the session, helped by a rise in Microsoft and other big tech stocks. U.S. stocks had been on a tear since Donald Trump's surprise victory in the presidential election last week as his proposals to increase infrastructure spending and reduce taxes are seen benefiting the economy.

Most of Dow stocks in negative area (18 of 30). Top gainer - The Goldman Sachs Group, Inc. (GS, +0.89%). Top loser - Johnson & Johnson (JNJ, -1.45%).

Most of S&P sectors in negative area. Top gainer - Conglomerates (+1.1%). Top loser - Healthcare (-1.1%).

At the moment:

Dow 18849.00 -20.00 -0.11%

S&P 500 2180.00 -4.25 -0.19%

Nasdaq 100 4811.75 -16.75 -0.35%

Oil 45.82 -0.16 -0.35%

Gold 1207.00 -9.90 -0.81%

U.S. 10yr 2.34 +0.06

Gold price fell to a fresh five-month low, on a stronger dollar and increased expectations that the Federal Reserve would raise U.S. interest rates next month says Dow Jones.

Spot gold prices were down 0.48% at $1,208.48 a troy ounce in mid-morning trade, the lowest price since early June, after trading at a nine-month low earlier in the day.

The WSJ Dollar Index, which tracks the greenback against a basket of other currencies, was up 0.12% Friday, after gaining for nine consecutive days.

A stronger dollar is typically bearish for gold and other dollar-denominated commodities, because it makes them more expensive for buyers holding other currencies.

Leading economic indicators from the Conference Board (LEI) index for the US increased by 0.1 percent in October to 124.5 (2010 = 100), after rising 0.2 percent in September. Last change coincided with forecasts.

"The leading indicator rose for the second consecutive month in October. Although the 6-month rate of growth has slowed, the index still shows that the economy will continue to expand in early 2017. Improving in the sub-index of interest rate and the sub-index of the average working week were the main factors to improve the overall index in October"- said Ataman Oziildirim, director of business cycles in the Conference Board.

Economic forecasts for the United States have not changed since then, as D. Trump unexpectedly won the presidential election. However, uncertainty has jumped on a lack of clarity on the issue of a possible aggressive tax cuts and trade barriers in the coming years.

Nevertheless, a survey of more than 100 economists, conducted by Reuters, showed that the Fed remains on track to raise interest rates next month.

This week, the dollar index hit a high of 13.5 years and is now trading nearly 3 percent higher than 8 November, when the presidential elections were held in the United States.

About two-thirds of respondents said Trump/s presidency would have a negative impact on US exports in the next year. Ten economists said that his victory will not have much effect, whereas only three respondents said that export volume will increase. Much will depend on the extent to which Trump will follow his pre-election promises to curb trade protectionism and migration levels. The survey also showed that the probability of a recession in the next year is 20 percent compared to 15 percent last month.

As it was indicated by trading of futures on the US indices, the session on Wall Street began with a modest change in the broad index. It's not too attractive, but the US market reached the level of their August records, which may mean more interesting movements in the near future.

On our parquet failed attempt to stall the WIG20 on the green side of quotations and instead we return to a decline of 0.7 percent. The problem is the size of the turnover, which clearly disappeared in the second half of trading.

An hour before the close of trading the WIG20 index was at the level of 1,729 points (-0.75%). The turnover among blue chips was amounted to PLN 385 million.

U.S. stock-index futures were little changed after after the stocks gained the previous day, helped by positive U.S. macroeconomic data and optimistic comments from Federal Reserve chair Janet Yellen.

Global Stocks:

Nikkei 17,967.41 +104.78 +0.59%

Hang Seng 22,344.21 +81.33 +0.37%

Shanghai 3,193.27 -15.18 -0.47%

FTSE 6,794.35 -0.36 -0.01%

CAC 4,519.80 -7.97 -0.18%

DAX 10,722.76 +37.22 +0.35%

Crude $45.50 (+0.18%)

Gold $1,214.50 (-0.77%)

(company / ticker / price / change ($/%) / volume)

Upgrades:

Goldman Sachs (GS) upgraded to Outperform from Neutral at Macquarie

Hewlett Packard Enterprise (HPE) upgraded to Outperform from Mkt Perform at Raymond James

Downgrades:

Citigroup (C) downgraded to Neutral from Outperform at Macquarie

Other:

FedEx (FDX) initiated with a Market Perform at BMO Capital

Wal-Mart (WMT) target lowered to $73 from $76 at Telsey Advisory Group

EURUSD 1.0725-30 (EUR 252m) 1.0800 (886m) 1.0850 (362m)

USDJPY 107.00 (USD 2.3bln) 107.50 (300m) 108.50 (431m) 109.00 (920m) 110.00 (741m)

GBPUSD 1.2000 (GBP 1.05bln) 1.2075 (301m) 1.2100 (488m) 1.2400 (1.67bln)1.2700 (1.18bln)

EURGBP 0.8600 (EUR 231m)

AUDUSD 0.7300 (AUD 386m) 0.7390 (319m) 0.7480 (209m) 0.7500 (595m) 0.7570 (280m) 0.7600 (825m) 0.7750 (533m)

USDCAD 1.3400 (586m) 1.3425 (758m) 1.3500 (3.0bln) 1.3600 (501m) 1.3640 (376m) 1.3700 (484m)

EURJPY 117.25 (EUR 537m)

EURNOK 9.0000 (EUR 300m)

EURSEK 9.8300 (EUR 285m)

The Consumer Price Index (CPI) rose 1.5% on a year-over-year basis in October, following a 1.3% gain in September.

Excluding gasoline, the CPI was up 1.4% year over year in October, after posting a 1.5% increase in September.

Prices were up in six of the eight major components in the 12 months to October, with the transportation and shelter indexes contributing the most to the year-over-year rise in the CPI. This increase in the CPI was moderated by a decline in the food index.

The transportation index rose 3.0% in the 12 months to October, following a 2.3% gain in September. This acceleration was mainly attributable to gasoline prices, which posted a 2.5% year-over-year increase in October, after declining 3.2% in September. The purchase of passenger vehicles index rose less year over year in October (+4.4%) than in September (+5.8%), but remained the top upward contributor to the 12-month change in the transportation index.

The shelter index posted its largest increase since January 2015, rising 1.9% in the 12 months to October, after a 1.7% gain in September. The homeowners' replacement cost index was up 4.1% on a year-over-year basis in October, following a 3.9% increase the previous month. Property taxes rose 2.8% in the 12 months to October. At the same time, the natural gas index was down 3.4% on a year-over-year basis in October, after declining 11.1% in September.

"USD/JPY has rallied significantly since Donald Trump was elected the next US President.

In the short term, we believe USD/JPY is likely to remain supported by improved risk appetite and expectations of a Fed rate hike in December, which we still call for. We lift our targets for USD/JPY to 113 (from 104) in 1M and 115 (from 106) in 3M.

Over the medium term, the case for higher yields on 10-year US treasuries and higher commodity prices has been strengthened by a rise in US inflation expectations, which are assumed to be supportive factors for USD/JPY. Hence, while the underlying JPY appreciation pressure stemming from, among other things, a large current account surplus is likely to remain intact, we expect US reflation to support the case for further portfolio investment outflows out of Japan, which combined with higher FX hedging costs on USD assets is likely to weigh on the JPY. We now target USD/JPY at 115 (previously 106) in 6M and 115 (was 106) in 12M.

For the longer term forecasts, we see risks fairly balanced but stress that uncertainty is unusual high given the many unknown factors for US economic policy under Trump".

EUR/USD

Offers 1.0625-30 1.0650 1.0665 1.0685 1.0700 1.0730 1.0750-60 1.0780 1.0800 1.0825-30 1.0850

Bids 1.0575-80 1.0550 1.0535 1.0520 1.0500 1.04801.0450

GBP/USD

Offers 1.2425-30 1.2450-55 1.2485 1.2500-05 1.2530 1.2550 1.2580-85 1.2600

Bids 1.2400 1.2375-80 1.2350 1.2330 1.2300 1.2285 1.2270 1.2250

EUR/GBP

Offers 0.8560 0.8585 0.8600 0.8620-25 0.8660 0.8680-85 0.8700

Bids 0.8525-30 0.8500 0.8480 0.8455-60 0.8430 0.8400

EUR/JPY

Offers 117.50 117.65 118.00 118.45-50 119.00 119.50 120.00

Bids 117.00 116.80 116.50 116.25-30 116.00 115.80 115.60 115.30 115.00

USD/JPY

Offers 110.80-85 111.00 111.20 111.35 111.50 111.85 112.00

Bids 110.50 110.20 110.00 109.80 109.50 109.30 109.00 108.75-80 108.50

AUD/USD

Offers 0.7420 0.7445-50 0.7480 0.7500-05 0.7530 0.7550

Bids 0.7380-85 0.7350 0.7325-30 0.7300 0.7285 0.7250

European stocks traded in the red zone, as the increase of US bonds yield has pushed the dollar index to new highs, which has a negative impact on the valuations of mining companies and energy producers.

At the strengthening of the US currency contributed yesterday's statements by Fed Chairman Yellen, who noted that the rise in interest rates in the US may be 'appropriate in a relatively short time. " Thus, it is hinted that the rate could rise as early as next month. According to the futures market, the likelihood of tighter monetary policy in December is 90.6%. Rising interest rates will also signal that the US economic recovery is gaining momentum. In addition, investors see Trump expansionary fiscal policy as a factor of strengthening inflationary pressures in the United States.

Investors' attention is also drawn by statements from ECB President Draghi and Bundesbank head Weidmann. During his speech, Draghi said that the recovery of the eurozone economy is still highly dependent on the stimulus measures of the Central Bank. Such statements suggest that at its December meeting, the ECB will extend the program of quantitative easing (QE). "Now we can not weaken the vigilance of the European Central Bank and will continue to operate using all available instruments, while inflation steadily grows." - Said Draghi. Recall, according to official data, in October consumer price inflation in the euro area was only 0.5%, well below the ECB's target of 2%".

Meanwhile, Bundesbank President Weidmann stated that innovative tools should be used with extreme caution, and monetary policy should not respond automatically to low inflation. "Most of the factors holding inflation low are temporary and inflation in the euro area may rise to 1.5% by February". He also warned that the purchase of government bonds blurs the line between fiscal and monetary policy.

Certain influence also provided data for the euro area. A report from the ECB showed that the current account surplus widened in September to 29.8 billion from euro 22.9 billion at the end of August (figure was revised from 23.6 billion). In addition, it was reported that the seasonally adjusted balance of payments surplus declined to EUR 25.3 billion from29.1 billion. In August.

The composite index of the largest companies in the region Stoxx Europe 600 trading lower by 0.2 percent. Since the beginning of this week the index gained about 0.3 percent.

Fresnillo and Randgold Resources shares have fallen by 6.3 percent and 6.1 percent, as the price of gold fell.

Volkswagen shares rose by 0.3 percent after the automaker said it plans to cut 30,000 jobs by 2021, to help increase profitability and focus on new areas such as electric vehicles and unmanned.

Airbus Group quotes climbed 0.2 project amid reports that the Japanese company Peach Aviation ordered 10 A320 aircrafts worth $ 1.1 billion.

LafargeHolcim securities - the world's largest cement producer - dropped by 3.4 percent. The company announced a plan for buybacks in the amount of 1 millio swiss francs after the worsened outlook for earnings and cash flow for 2018.

At the moment:

FTSE 100 6756.39 -38.32 -0.56%

DAX -16.73 10668.81 -0.16%

CAC 40 4509.77 -18.00 -0.40%

The first half of today's session brought a lot of confusion in quotations of the WIG20 index and future contracts. At the beginning of trading we had to deal with the weakening of the market, during growth in Europe. Then, after a confrontation with support in the area of 1,710 points the market has returned to the levels from the session opening, when Euroland was in the red and near the daily lows of the session. It is also difficult to see any justification for such sudden changes, in no way correlated with the situation outside. A positive sign is the appreciating of the Polish currency today.

At the halfway point of today's trading, the WIG20 index reached the level of 1,735 points (-0,40%), the turnover was amounted to PLN 280 million.

• Monetary policy should not automatically respond to low inflation

• Inflation in the euro may rise to 1.5% by February

• Most of the factors to keep inflation at a low level are of a temporary nature

• The leaders of the central bank can not close the eyes to the low profitability of commercial banks

• Purchase of government bonds blurs the line between fiscal and monetary policy

This morning the New York futures for Brent dropped 0.84% ​​to $ 46.10 and WTI fell 1.14% to $ 44.90 per barrel. Thus, the black gold is trading in the red zone, move caused by a strong US dollar and weakening hopes for a OPEC production cut. Recall, the country's largest oil exporters (Saudi Arabia, Algeria, Russia, Iran, Kuwait, Libya, Venezuela, Bahrain, UAE, Qatar and Nigeria) will hold a meeting in Doha to discuss the details of a possible deal.

The current account of the euro area recorded a surplus of €25.3 billion in September 2016 (see Table 1). This reflected surpluses for goods (€30.3 billion), services (€4.8 billion) and primary income (€4.2 billion), which were partly offset by a deficit for secondary income (€14.0 billion).

The 12-month cumulated current account for the period ending in September 2016 recorded a surplus of €337.5 billion (3.2% of euro area GDP), compared with one of €322.5 billion (3.1% of euro area GDP) for the 12 months to September 2015 (see Table 1 and Chart 1). This was mostly due to an increase in the surplus for goods (from €333.4 billion to €368.1 billion), as well as a decrease in the deficit for secondary income (from €131.2 billion to €128.4 billion). These were partly offset by decreases in the surpluses for services (from €62.8 billion to €56.9 billion) and primary income (from €57.5 billion to €41.0 billion).

EUR/USD 1.0746 (EUR 226m) 1.0775-80 (385m) 1.0800 (2.48bln) 1.0830 (208m) 1.0840 (250m) 1.0900 (499m)

USD/JPY 107.25 (250m) 107.50 (650m) 107.90-95 (705m) 108.05-10 (380m)

GBP/USD 1.2475 (GBP 355m) 1.2700 (1.17bln)

EUR/GBP 0.8750 (EUR 451m)

AUD/USD 0.7400 (AUD 911m) 0.7560 (219m) 0.7600 (431m) 0.7665 (248m)

NZD/USD 0.7070 (NZD 207m) 0.7100 (789m)

USD/CAD 1.3500 (USD 510m)

EUR/JPY 115.50 (EUR 216m)

AUD/JPY 79.00 (AUD 300m)

NOK/SEK: 1.0680 (NOK 2.85bln) 1.0750 (2.71bln)

• We Cannot Yet Drop our Guard

• Should Be No Rolling Back of Bank Regulation

• NPL Ratio Has Been Decreasing in Euro Area

• Banks' Profitability Remains A Challenge

• Low Bank Stock Prices Could Curb Lending

WIG20 index opened at 1736.82 points (-0.32%)*

WIG 46966.77 -0.65%

WIG30 2007.70 -0.75%

mWIG40 3945.23 -0.28%

*/ - change to previous close

The clear weakness of the Polish stock market against the background of European markets and the USA once again made itself felt at the start of trading. Behind us tough beginning of the session.

At the very opening of the cash market the WIG20 index fell only 0.3 percent, but after a while the index of blue chips adapted to the changes offered by the contracts in trading before the opening. Already in the morning it is difficult for optimism comparing the behavior of our parquet with leading European markets, which glow green. Tellingly also is drop of the BZW after recommendation "buy" from Citigroup and increasing the overall merit of the target price to PLN 341.

After fifteen minutes of trade, the WIG20 index was at the level 1,727 points (-0.84%).

• At 08:30 GMT the ECB president Mario Draghi will deliver a speech

• At 09:10 GMT the Bank of England Deputy Governor for Monetary Policy Ben Broadbent will deliver a speech

• At 10:30 GMT ECB Jens Weidmann will make a speech

• At 10:30 GMT the SNB Board Member Andrea Mehler deliver a speech

• At 10:30 GMT FOMC member James Bullard will give a speech

• At 14:30 GMT FOMC member William Dudley will make a speech

• At 14:30 GMT FOMC member Easter George will deliver a speech

EUR/USD

Resistance levels (open interest**, contracts)

$1.0938 (3352)

$1.0863 (2761)

$1.0801 (751)

Price at time of writing this review: $1.0588

Support levels (open interest**, contracts):

$1.0538 (3903)

$1.0486 (3961)

$1.0422 (5080)

Comments:

- Overall open interest on the CALL options with the expiration date December, 9 is 72458 contracts, with the maximum number of contracts with strike price $1,1200 (6175);

- Overall open interest on the PUT options with the expiration date December, 9 is 63301 contracts, with the maximum number of contracts with strike price $1,0500 (5080);

- The ratio of PUT/CALL was 0.87 versus 0.86 from the previous trading day according to data from November, 17

GBP/USD

Resistance levels (open interest**, contracts)

$1.2703 (1780)

$1.2605 (1699)

$1.2509 (1853)

Price at time of writing this review: $1.2388

Support levels (open interest**, contracts):

$1.2293 (4060)

$1.2195 (1294)

$1.2097 (1134)

Comments:

- Overall open interest on the CALL options with the expiration date December, 9 is 34919 contracts, with the maximum number of contracts with strike price $1,3400 (2489);

- Overall open interest on the PUT options with the expiration date December, 9 is 36911 contracts, with the maximum number of contracts with strike price $1,2300 (4060);

- The ratio of PUT/CALL was 1.06 versus 1.06 from the previous trading day according to data from November, 17

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

Thursday's trading on Wall Street ended on the green side. The Dow Jones Industrial index at the end of the day increased by 0.19 percent, the S&P500 gained 0.47 percent and the Nasdaq Composite rose by 0.74 percent.

The results of the presidential elections and the Campaign announced fiscal stimulus strengthened inflation expectations in the US economy, what for the Fed could mean a faster pace of monetary tightening. The market is almost certain the December interest rate hike in the US. Measured by the rate contracts, the Fed likelihood to increase the cost of money in the US next month, rose to 96 percent from 68 at the beginning of November.

Night brought no major changes. Although the contracts for S&P500 lost 0.1 percent now, but remain at a level similar to that when Europe ended yesterday their quotes.

On the Warsaw market situation is slightly different. The WSE, especially the WIG20 index, is in the middle of a serious confusion. Pressures associated with the strengthening of the dollar and rising debt yields in developed markets cast a shadow on the condition of the zloty.

For the supply side helps downward pressure from other emerging markets, weak macro data and signals from the Polish political scene, where there is a new wave of activities related to foreign currency loans, where the problem is now connected with the weakening of the zloty against the franc.

In short, the WIG20 index is under pressure of stream of factors favoring discounts.

The technical situation on the chart of the WIG20 allows us to expect further price reductions, where the target level is the area of ​,1700 points. Fundamental factors, global and technical are playing in the supply-side camp.

"GBP/USD violated a multi-decade support and breached a steeper descending channel (1.2870), indicating long-term bearish signals. This is confirmed by the monthly stochastic, which remains in negative territory (below 25%).

The pair did rebound recently, however, and achieved the maximum potential at 1.2660. Given likely long-term bearish price action, pullbacks are expected to remain corrective. The pair has breached a daily trend support, which suggests that the recovery has run its course and that the down move should resume.

Thus, GBP/USD should head towards the mid-October high of 1.2330 and perhaps even towards 1.2090/30.

After exhibiting exhaustion signs near the neckline of a double top, NZD/USD has been undergoing a correction.

Recently, it rebounded towards 0.7390, the 76.4% retracement from September, and it has breached a multi-month upward channel.It is probing the neckline of a head-and-shoulders pattern, which denotes further down move.

A break below 0.7030/10 will confirm the pattern and indicate a correction towards 0.6860, the 76.4% retracement from May".

Copyright © 2016 Societe Generale, eFXnews™

In October 2016 the index of producer prices for industrial products fell by 0.4% compared with the corresponding month of the preceding year. In September 2016 the annual rate of change all over had been -1.4%.

Compared with the preceding month September 2016 the overall index rose by 0.7% in October 2016 (-0.2% in September and -0.1% in August).

In October 2016 energy prices decreased by 2.2% compared with October 2015, prices of intermediate goods fell by 0.7%. In contrast prices of non-durable consumer goods rose by 1.1%, prices of capital goods by 0.6% and prices of durable consumer goods by 1.2%.

New Zealand consumer confidence strengthened to the highest level in more than a year in November, survey data from ANZ Bank showed Friday, cited by rttnews.

The ANZ Roy Morgan Consumer Confidence Index rose to 127.2 in November from 122.9 in October. This was the highest score since April 2015 and the reading improved for six consecutive months.

The current conditions and future conditions indexes rose 4 points each, to 127.3 and 127.2 respectively.

A net 13 percent feel better off compared with a year ago, which was the highest since June 2014.

U.K. stocks rose Thursday, posting their highest close in a week, as retail shares strengthened on sales data that blew past expectations. Retail shares were pushed up as October retail sales leapt above expectations, with the annual rate of 7.4% from the year-ago period the highest rate since April 2002, the Office for National Statistics said.

U.S. stocks closed slightly higher on Thursday as an improving economic picture and greater clarity on Federal Reserve policy allowed the market's postelection uptrend to continue, putting the S&P 500 and Dow within reach of attaining new record closing highs.

A weaker yen sent Japan's Nikkei to a 10-month high on Friday, helping drive gains across key Asian markets as robust U.S. economic data buoyed expectations of an interest-rate hike next month.