Yesterday in an interview on CNBC TV St Louis Fed president James Bullard noted that changes in the US bond market are the main focus for investors currently. ‘’I think the state of affairs is good for today. The question is how to play things going forward over the next two years. If the Fed raises rates 50 basis points and the 10-year [Treasury bond] does not cooperate, you could see an inverted yield curve in the US. Yield curve inversion has a tremendous track record of predicting recessions’’.
Published yesterday a loan officers’ survey carried out by the Fed showed stronger demand for loans from small businesses, and an easing of standards on loans of all sizes. Less demand for commercial real estate loans was noted across all 72 US banks surveyed and the 22 branches and agencies of foreign banks. Residential real estate and auto loans were unchanged from Q1 2018.
DAX 30
Yesterday’s German June factory orders slumped 4 per cent on the month; today June industrial production fell 0.9 per cent M/M. June’s current account surplus a hefty €26.2 billion. MACD is bearish.
SHORT TERM TRADER: Short at 12635; stop above 12930. Target 12200.
POSITION TAKER: Square.
FTSE 100
Have been forced to re-draw the trend channel; the MACD is bearish.
SHORT TERM TRADER: Short at 7610; stop above 7800. First target 7500.
POSITION TAKER: Small short at 7799; stop well above 7800. First target 7400, then 7100.
S&P 500
Overbought on the daily RSI as we trade within 20 pips of the all-time high.
SHORT TERM TRADER: Short at 2795; stop above 2880. Target 2600.
POSITION TAKER: Short at 2805; stop above 2900. Target 2555.
BRITISH POUND/US DOLLAR
Becoming oversold on the RSI as we did to a new marginally lower low; blame it on Brexit.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
The commodity channel index is trying to turn positive after this endless sideways move in a symmetrical triangle.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Momentum resolutely bearish as we hover at the bottom of this year’s range.
SHORT TERM TRADER: Square.
POSITION TAKER: Short at 1242; stop above 1240. Target 1140.
