The Financial Times this morning reports that Valdis Dombrovskis, European Commission vice-president, has bowed to Europe’s financial industry lobbying and will allow the clearing of derivatives via London even if we end up with a no-deal Brexit. Responsible for financial regulation, he has come to realise just what an essential pillar of modern finance the derivatives $530 trillion market has become. The solution, he stresses, is strictly temporary.
Data from Knight Frank yesterday reported by City AM notes that prime property price growth across the globe has slowed again, 2.7 per cent in the last 12 months, and the slowest pace in over 5 years. The process is particularly marked in Asia, with Hong Kong leading the way. They suggest the reasons behind the slowdown are higher interest rates, tighter regulatory environment and oversupply.
DAX 30
Forming a large dragonfly doji yesterday as the market swings between hope and news that Chancellor Merkel will step down as CDU party leader in 2021. However, price action remains under first Fibonacci retracement resistance and might be another inverted flag.
SHORT TERM TRADER: Short at 11200; stop above 11755. Target 10400.
POSITION TAKER: Short; stop above 11700. Next target at 10700.
FTSE 100
Budget or no budget we’re losing bearish momentum as we thrash around between 6900 and 7120, Fibonacci 38 per cent retracement resistance.
SHORT TERM TRADER: Short at 7025; stop above 7125. Target 6400.
POSITION TAKER: Short at 7075; stop above 7125. First target 6800.
S&P 500
Bearish momentum increasing again as we briefly dip below trend line support taken from the early 2016 low. Another market thrashing around looking for direction now that we have dropped 11 per cent from October’s record high. Rather an expensive month.
SHORT TERM TRADER: Covered my short position on yesterday’s slump and now wondering where and when to re-sell.
POSITION TAKER: Also took profits on my short; reviewing the situation.
BRITISH POUND/US DOLLAR
Precious little interest here at the moment which just goes to show how little government budgets, tinkering around the edges, matter to wholesale markets.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Italy on a back burner as German politics takes centre-stage – all of which are fairly irrelevant to this exchange rate.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Bullish momentum evaporating quickly adding weight to our view that the latest rally was a countertrend move.
SHORT TERM TRADER: Tiny short at 1227; stop above 1240. Target 1190.
POSITION TAKER: Square.
