Zhou Xiaochuan, head of China’s central bank, was speaking to coincide with the 19th Communist Party Congress today. He warned of asset price bubbles and the potential for a ‘Minsky Moment’ because corporate debt levels are already high and consumer debt is growing too quickly, CNBC reports. He also noted that the authorities would deal with the disguised debt of local government financing vehicles. Data this morning showed Q3 GDP growing at 6.8 per cent, down from 6.9 per cent in Q2, in line with expectations of a controlled slow-down next year.
The Spanish government has given Catalonia a deadline of 09:00 GMT to say whether its declaration of independence stands. Meanwhile an auction of 3, 10 and 30-year Bonos (Spanish government bonds) is planned for this morning.
DAX 30
Still very overbought as we inch up to yet another record high with a small spike at the top of yesterday’s candle. Note that some EU government bonds are at their lowest yields in a few weeks.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
FTSE 100
Another dragonfly doji yesterday as we perhaps are in the process of forming a gently rounding top. Note that bullish momentum is negligible.
SHORT TERM TRADER: Short at 7554; stop above 7600. Target 7320.
POSITION TAKER: Square.
S&P 500
Big news as the Dow Jones Industrial Average prints above 23000 yesterday – the day before October 19th – which was Black Monday in 1987.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Trying to form an interim base ahead of 1.3100 as dinner for Mrs May tonight with the other 27 heads of EU states is something I doubt she’s looking forward to. Then again, Mr Rajoy may be in two minds as to whether to go either.
SHORT TERM TRADER: Small long at 1.3115; stop below 1.3100. Target 1.3400.
POSITION TAKER: Square.
EURO/US DOLLAR
Again trying to base ahead of 1.1700 thus keeping momentum just bullish.
SHORT TERM TRADER: Small long at 1.1770; stop below 1.1740. Target 1.2000.
POSITION TAKER: Square.
GOLD
Moving averages are mixed but trading below an Ichimoku cloud where the upper edge is starting to turn down.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
Nicole Elliott is a long-standing Member of the Society of Technical Analysts and has taken over the IC’s trading coverage. She is regularly interviewed and quoted by the financial media, is a conference speaker, and author of several books on charting.
