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Market Outlook: US yield curve flattens

Not positive for the economic outlook
March 29, 2018

CNBC is reporting that the US dollar Libor rate for 12-month money was offered at 2.7 per cent.  This compares to 2.36 per cent on 2-year Treasury notes last week and 2.74 per cent on 10-year TNotes yesterday. Therefore banks operating in US dollars anywhere cannot fund themselves via the money market, park it in Treasuries, and earn their keep.

British food and beverage exports have risen strongly in the year to November 2017.  Up 12 per cent, led by alcohol which rose by 16 per cent.  Manufacturers say that exports now account for 23 per cent of their business yet less than a third of those surveyed were worried that terms might deteriorate after Brexit.  ‘British produce remains a byword for excellence around the world’, said Gary Lynch, CEO GS1, as reported by City AM.     

DAX 30

Narrowly avoiding a new low for the year but bearish momentum remains steady.  MEPs claim that the ‘parachuting’ in Martin Selmayr as secretary general of the European Commission by Jen-Claude Junker makes him guilty of a coup.   

 

SHORT TERM TRADER:  Short at 11800; stop above 12200.  Target 11400.

 

POSITION TAKER:  Short at 11800; stop above 12400.  Target 9500.

FTSE 100

Bearish momentum has eased significantly as the index has managed to crawl back above 6900 in this holiday-shortened fortnight.

 

SHORT TERM TRADER:   Small short at 7055; stop above 7100; target 6700.

 

POSITION TAKER:  Short at 6850 and at higher levels; stop above 7100.  Target the 6675/6700 area.

S&P 500

A wholly unconvincing attempt at stabilising with a tiny doji yesterday.  Tech stocks continue under pressure, Tesla shares seeing their worst ever monthly performance – down 24.86 per cent month to date – with one more day to live through today.

 

SHORT TERM TRADER:  Small short at 2675; stop above 2700.  Target 2585.

 

POSITION TAKER:  Thinking of selling depending on today’s close.

BRITISH POUND/US DOLLAR

Retreating ahead of the long weekend.  Watching to see whether trend line support might steady the boat and give me another buying opportunity.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Back in the middle of this year’s triangle consolidation.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Closed out my position this morning at 1.2300 as I can’t be bothered to run it over the weekend.

GOLD

Missed my chance again as it flips as quickly on the way down as it did on the way up.  Very frustrating.

                            

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.