Turkish retail price inflation had hovered between 7 and 10 per cent per annum over the last decade. Since the Turkish lira began devaluing, CPI soared to 24.5 per cent in the year to September 2018. To tackle this, last month the central bank but up its key interest rate, something President Recep Tayyip Erdogan did not favour. Yesterday his son-in-law and finance minister Berat Albayrak urged businesses to voluntarily cut prices by 10 per cent; this was part of his ‘fully fledged fight’. He also urged citizens to report sudden price hikes so that the government could raid the inventories of shops, if necessary. Echoes of Venezuela where yesterday the IMF forecast inflation to rise to 1.37 million per cent, up from July’s 1 million. What is the point of an estimate like that?
Interviewed on CNBC yesterday, President Trump said he believed the Fed was raising rates too fast and that the economy doesn’t have an inflation problem. This despite unemployment dropping to its lowest in 49 years.
DAX 30
Sudden swoon yesterday below September’s low, just ahead of this year’s low set in Q1 at 11700. Daily and weekly closes below 11800 should add to bearish pressure. German business lobby groups the BDI and IW Institute came out warning of a no-deal disorderly Brexit was a ‘horrific scenario’ which would hit the auto sector hard.
SHORT TERM TRADER: Covered short position at the 11900 original target. Will re-sell on daily and weekly closes below 11800.
POSITION TAKER: Short at 12100; stop above 12200. Target 11700.
FTSE 100
Another index testing pivotal support around 7200 with a MACD that’s increasingly bearish. Yesterday’s hammer candle hints that we might hover around here for another day or three. Note that EUR/GBP at almost 87 pence will hamper any attempt at a bounce.
SHORT TERM TRADER: Square but looking to re-sell on weak weekly closes.
POSITION TAKER: Short at an average above 7300; stop above 7535. Target 6925.
S&P 500
Slipping about, trying to find its footing under the old triangle and trend line support since April. The MACD is increasingly bearish and a break below 2800 would signal a complete failure to hit the much vaunted and psychological level at 3000.
SHORT TERM TRADER: Will go short on a daily close below 2860.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Popping up above mini-trend line resistance though momentum is still a mess.
SHORT TERM TRADER: Long at 1.3075; stop below 1.2900. Target 1.3300.
POSITION TAKER: Square.
EURO/US DOLLAR
Struggling badly and the MACD steadily bearish. Italian deputy PM and Legua leader Salvini at a meeting with Marine Le Pen in Rome said, ‘’we are against the enemies of Europe – Junker and Moscovici – shut away in the Brussels bunker’’.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Totally lacking momentum and traders in this market rapidly losing the will to live.
SHORT TERM TRADER: Square.
POSITION TAKER: Short at 1194; stop above 1218. First target 1160.
