Data from Japan overnight is a salutary sight. The level of unemployment in June dropped to 2.8 per cent, the lowest since 1994. The ratio of jobs on offer to the number of potential applicants is 1.51, from just 0.43 in 2009 and the highest level of jobs available since 1973 (1.84 record high). Meanwhile consumer prices across the whole of the nation rose by an annualised 0.4 per cent when volatile fresh food prices are excluded (the preferred measure of the Japanese). If one also excludes energy prices then deflation (or negative inflation) is running at 0.1 per cent. No wonder the Bank of Japan has once again postponed the day of reckoning when they will reach their 2.0 per cent CPI target.
The New York Times reports that research prepared by consulting firm Oliver Wyman found that the retail arm of US bank Wells Fargo forced 800,000 customers taking out car loans to also take out insurance they did not need. This is the bank was caught creating phony bank accounts last year.
DAX 30
Momentum is at its most bearish this year as the index gives back over three quarters of gains made since late April. A new low for the week today, despite Monday’s hammer, underlines that investor sentiment is not behind the Dax at the moment.
SHORT TERM TRADER: Small short at 12225; stop above 12355. Target 11550.
POSITION TAKER: Looking to establish a core short position on a weekly close below 12000.
FTSE 100
The commodity channel index is clearly bearish this morning though the index is still hovering at the pivotal 7400 level. This morning Barclays reported a £1.2 billion Q2 loss, mainly because it took a hit when selling its Africa operations.
SHORT TERM TRADER: Short at 7394; stop above 7520. First target 7300.
POSITION TAKER: Square.
S&P 500
A decent sized hanging man yesterday is the first proper warning sign that this market is overstretched. Tempted to go short because the commodity channel index has turned down this morning. Would prefer a few more chart signals.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Rejected at the 1.3160 rather abruptly, erasing all bullish momentum, and highly unlikely to trade above here today.
SHORT TERM TRADER: Square.
POSITION TAKER: Small long at 1.3090; stop below 1.2950. Target 1.3400.
EURO/US DOLLAR
Retreating a tad from this year’s highest level yet momentum remains bullish – even as President Trumps team become even more erratic, this week communications director Anthony Scaramucci using obscenities when speaking about top aides Steve Bannon and Reince Priebus.
SHORT TERM TRADER: Will now see whether it closes above 1.1700 in order to take a more serious long term position here.
POSITION TAKER: Square.
GOLD
Very unconvincing price action with a little doji yesterday after Wednesday’s decent rally.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
