Today European regulators publish the results of the latest stress tests carried out on 48 banks in the EU. The Stoxx Europe 600 Banks index is off 23 per cent over the last 12 months. The European Banking Authority says that non-performing loans across the region now stand at 3.6 per cent, though at Italian banks it stands officially at 9.7 per cent. The latter are also under pressure from the fall in value of the Italian sovereign debt they hold, which forms part of their core capital ratios.
Yesterday US authorities launched the first criminal charges against Malaysia’s 1MDB fund scandal, reports the Financial Times. Financier Jho Low and 2 former Goldman Sachs bankers face charges. The bank is also under scrutiny for its role underwriting $6.5 billion worth of bonds for the sovereign fund.
DAX 30
Bouncing a bit more than expected but still below an important cluster of what should now be resistance levels around 11755.
SHORT TERM TRADER: Short at 11200; stop above 11755. Target 10400.
POSITION TAKER: Short; stop above 11700. Next target at 10700.
FTSE 100
Momentum’s turned bullish as we nudge to the highest level in three weeks and retrace half of October’s fall.
SHORT TERM TRADER: Stopped out left, right and centre and nursing a nasty loss.
POSITION TAKER: Stopped out for a smallish loss.
S&P 500
Another index retracing half the losses since the record high though momentum has yet to turn bearish. Apple, after becoming the first US trillion-dollar company, saw shares slide 7 per cent after hours yesterday that it will no longer report numbers of units sold and that Christmas sales might be lower than currently expected.
SHORT TERM TRADER: New small short at 2760; stop above 2835. Target 2600.
POSITION TAKER: Square and reviewing the situation.
BRITISH POUND/US DOLLAR
The best one-day rally, based on a rumour, in a long-time underlines sterling’s status as the currency that most are tempted to sell. Cable is not overbought at all.
SHORT TERM TRADER: Small long at 1.2900; stop below 1.2795. Target 1.3100.
POSITION TAKER: Square.
EURO/US DOLLAR
Another currency rallying from oversold levels as Trump diplomacy twists and turns.
SHORT TERM TRADER: New small long at 1.1440; stop below 1.1300. Target 1.1700.
POSITION TAKER: Square.
GOLD
Rallying in line with a weaker US dollar as the World Gold Council yesterday announced that central bank gold holdings had increased 22 per cent Y/Y and a three-year high of 148.4 tonnes. Regular buyers Kazakhstan, Russia and Turkey featured, as did new buyers Hungary, India and Poland.
SHORT TERM TRADER: Tiny short at 1227; stop above 1240. Target 1190.
POSITION TAKER: Square.
