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Market Outlook: Mark Carney says a lot

And that rates must rise
April 20, 2018

In an interview with the BBC yesterday, Mark Carney said that an increase in the key Bank rate would happen this year but not necessarily at the May MPC meeting.  This is a climbdown from what he had pencilled in, and the market took as a 90 per cent certainty, following awful retail sales data and inflation coming in lower than expected, CPI up 2.5 per cent Y/Y.  He added that though ‘likely’ any hikes will depend on Brexit talks.

The UK Financial Conduct Authority has decided that Barclays’ CEO Jes Staley must pay an undisclosed fine because his attempt at unmasking a whistle-blower at the bank was a breach of individual conduct.  ‘Barclays management continues to have unanimous confidence in Staley and continues to recommend his re-election as a director at the Barclays AGM on May 1’, the bank said in a statement this morning.

DAX 30

Testing the 50 per cent retracement level for a third time and somehow it doesn’t look as though it will get lucky.  

 

SHORT TERM TRADER:  Small short at 12430; stop above 12650.  Target 12000.

 

POSITION TAKER:  Square.

 

FTSE 100

Inching to its highest level since February’s low, and almost overbought in the process. 

 

SHORT TERM TRADER:   Stopped out of my short position for a tiny loss.

S&P 500

The long-term trend line is capping for now with an evening star three-candle pattern over the last three days.

 

SHORT TERM TRADER:  New small short at 2689; stop above 2745.  Target 2580.

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

A sudden slump as we decide that holding at a new high for this year is a leap too far.  Now I’m trying to work out where to re-buy, probably around 1.4000 but watch for signs of basing first.

 

SHORT TERM TRADER:  Stopped out of long position for a loss.

 

POSITION TAKER:  Also stopped out on yesterday’s sell-off.

EURO/US DOLLAR

Bloomberg reports that ‘Jordan [head of the central bank] sees no need for Swiss national Bank policy shift despite lower franc’.  EUR/CHF is back at 1.2000 Swissie per euro, something the country has been fighting for tooth and nail with extreme monetary policy for years.  Why on earth would they change that now?

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

GOLD

The commodity channel index appears to have turned down now against long term resistance.

                            

SHORT TERM TRADER:  Small short at 1342; stop above 1360.  Target 1320.

 

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.