Last night the US Federal Reserve kept its key Fed Funds target rate unchanged between 2 and 2.5 per cent. ‘’The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 per cent objective’’. Same language as last time but some had expected/hoped that further rate rises might be pushed out into the long grass after October’s stock market hiccup.
Embattled UK big four auditors are fighting back – sort of. Yesterday KPMG announced that it will cease all non-audit work for FTSE 350 clients; this can be as much as 70 per cent of auditing fees. Deloitte’s public policy partner David Barnes said the firm will back a series of measures to remedy criticisms from the Competition and Markets Authority.
DAX 30
Moving back to the bottom of the messy inverted pennant formation as the European Commission and the IMF produce forecasts of weaker economic growth (and therefore bigger annual budget deficits) in Italy than those supplied by the Italian government. PM Giuseppe Conte replied, ‘’there are no grounds for questioning the soundness and the sustainability of our reforms’’.
SHORT TERM TRADER: Short at 11200; stop above 11755. Target 10400.
POSITION TAKER: Short; stop above 11700. Next target at 10700.
FTSE 100
Still stuck under 7200 and the commodity channel index perhaps dipping below the 100 line again today.
SHORT TERM TRADER: Short at 7080; stop above 7200. First target 6865.
POSITION TAKER: Short at 7095; stop well above 7200. First target 6900.
S&P 500
Suddenly stopped at the Fibonacci 61 per cent retracement resistance.
SHORT TERM TRADER: New little short at 2798; stop above 2865. Target 2630.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Think I’ve rather missed the boat here as we’ve already retreated quite a bit from resistance in the 1.3200-1.3300 area. Those planning a skiing holiday this winter have already noticed that at £0.8700, sterling is close to its strongest level of the last year or so.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Very disappointing as the euro gets slapped down comprehensively from Fibonacci 38 per cent retracement resistance. Today PM Theresa May will travel to Mons to pay her respects to WWI soldiers who died in Belgium, then go on to France where as well as laying a wreath in Albert followed by what’s billed as a ‘working lunch’ with French President Macron.
SHORT TERM TRADER: Small long at 1.1440; stop below 1.1330. Target 1.1700.
POSITION TAKER: Small long 1.1415; stop below 1.1300. Target 1.1600.
GOLD
Very slow work with gentle topping activity against the 1240 area.
SHORT TERM TRADER: Tiny short at 1227; stop above 1240. Target 1190.
POSITION TAKER: Square.
