Ahead of the World Economic Forum meeting which starts in Davos today, the IMF and UN published their economic forecasts. Global growth for 2019 was trimmed from 3.7 per cent in the IMF’s October’s report to 3.5 per cent, blamed on weaker growth in China, Argentina and Turkey, among others, and worries over international trade. Christine Lagarde, chair of the IMF said, ‘’the bottom line is that after two years of strong expansion, the world economy is growing more slowly than expected and risks are rising’’. I’m not sure I see things her way.
In an interview with CNBC John Studzinski, MD and vice chairman of PIMCO said, ‘’one of [the] things we didn’t anticipate last year is we are increasingly in a geopolitical recession and we have spent the last ten years very focused on the quantitative aspects of growth. Now we have got to deal with the personality aspects of growth’’ – meaning populist leaders like Donald Trump and Jair Bolsonaro.
DAX 30
Overbought on the daily RSI on Friday’s close and now we’ve started drifting lower. This morning in Aachen we have what Politico’s dubbing ‘Mercron’. Angela Merkel and Emmanuel Macron sign a 16-page treaty ‘’chock full of uplifting, if technocratic, prose meant to provide a framework for the next generation of Franco-German relations’’, they say.
SHORT TERM TRADER: Square and cross.
POSITION TAKER: Square.
FTSE 100
Stalling slowly at the psychological 7000 level, just under a 50 per cent correction to Q4’s losses.
SHORT TERM TRADER: Short at 6905; stop above 7045. First target 6600.
POSITION TAKER: Short at 6895; stop above 7045. First target 6600.
S&P 500
Stalling, and bullish momentum’s easing, just under a Fibonacci 61 per cent retracement of Q4’s sharp losses.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
The MACD’s still bullish as we try to crawl up from a new platform at 1.2800.
SHORT TERM TRADER: Tiny long at 1.2870; stop below 1.2800. Target 1.3200.
POSITION TAKER: Long at 1.2860; stop below 1.2670. Target 1.3250.
EURO/US DOLLAR
Three months now and there’s really nothing going for this currency pair.
SHORT TERM TRADER: Long at 1.1510; stop below 1.1345. Target 1.1750.
POSITION TAKER: Square.
GOLD
Sitting on the top of the trend channel that has dominated since August.
SHORT TERM TRADER: Short at 1292; stop well above 1300. First target 1240.
POSITION TAKER: Square.
