Today CNBC reports that China’s Securities Association announced a CNY 100 billion (US$14.5 billion) asset management plan to alleviate ‘share pledges’. They worry that mainland stock index falls of up to 35 per cent this year will force the selling of shares currently being used as collateral for cash loans, which some put as high as 10 per cent of listed A shares. The move follows a series of other adjustments made by the authorities to stem the potential damage trade sanctions might bring.
Third quarter earnings for Deutsche Bank saw group revenue miss expectations at €6.2 billion, though profit before tax at €506 million was better than consensus forecasts. As usual the corporate and investment bank was a drag on numbers, sales and trading revenue down 15 per cent from this time last year, again worse than analysts’ already pessimistic forecasts. It also announced that the restructuring of this division was now complete. City AM reports this morning that ex-head of IT at the Bank of England, Deepastree Mitra, will lead the German bank’s foray into cloud technology.
DAX 30
Some may take comfort in yesterday afternoon’s bounce. The trouble is that last night’s close was clearly under the bottom of the inverted flag and at last week’s low. President Macron has sparked a row over Armistice Day celebrations in Paris because he does not want them to be ‘excessively military’. Of the 80 heads of state invited, many have yet to accept.
SHORT TERM TRADER: Covered my short just ahead of target at 11200 because we got there so quickly. Nice work. Now looking to re-sell.
POSITION TAKER: Covered half my shorts just ahead of target 11200, the half-way mark of the rally that started late in 2016. Now using a stop above 11800, I’m letting the other half run towards the next target at 10700.
FTSE 100
Re-testing this year’s low and scurrying back up in the afternoon after giving itself a really good Halloween fright. Expect further downside probing.
SHORT TERM TRADER: Short at 7025; stop above 7125. Target 6400.
POSITION TAKER: Short at 7075; stop well above 7200. First target 6800.
S&P 500
Audible sighs of relief as we scuttle back up after hitting a multi-month low yesterday. The Russell 200 is the US’s worst performer and Dow Utilities holding up best. That tells you all you need to know.
SHORT TERM TRADER: Added to short at 2740; stop above 2825. Target 2600.
POSITION TAKER: Short at 2770; stop well above 2825. Target 2600.
BRITISH POUND/US DOLLAR
Basically, all quiet on the FX front.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
EUR/USD largely irrelevant but keep an eye out for news from Italian banks.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Perhaps some are according this safe-haven status, but should they? Others, like Japanese yen, Swiss franc, and US Treasuries are not getting the same treatment.
SHORT TERM TRADER: Tiny short at 1227; stop above 1240. Target 1190.
POSITION TAKER: Square.
