Ex-corporate lawyer Nicky Morgan, head of the Treasury Select Committee of MPs, will today launch an inquiry into the finance sector and future trade agreements. The question at the centre of this exercise is: ‘whether it would be in the long-term interests of the UK to align closely with EU financial rules, or to forgo financial services trade with the EU and pursue trade with other third countries. The UK may converge, seek equivalence, or diverge from the EU’. Pity this hasn’t been the focus of the ineffective trade negotiations that have been going on for 2.5 years with Michel Barnier.
In a rather unusual move in terms of its timing, yesterday, when addressing the Sandringham branch of the Women’s Institute, the Queen commented on cohesion and the working together. ‘’As we look for new answers in the modern age, I for one prefer the tried and tested recipes, like speaking well of each other and respecting different points of view; coming together to seek out the common ground; and never losing sight of the bigger picture’’.
DAX 30
Little range this week at this year’s highs, and just under the half-way correction retracement since the fall starting October. None the wiser here..
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
FTSE 100
Momentum’s bearish again this week as we retreat a little from the 50 per cent retracement level.
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
Looking a little tired as we consolidate around 50 per cent retracement resistance. Also tired are US Federal government employees who haven’t been at work for 34 days – the longest US partial shutdown ever. This means that, depending on the agency responsible, data on the US economy may not be available.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
An unusual hammer candle (because it’s nowhere near an important low point) yesterday – rather like the one we saw on January 15th, should add to bullish momentum. We think that if cable starts holding above 1.3250, and breaks below 86 pence per euro, a massive round of short-covering might kick in.
SHORT TERM TRADER: Tiny long at 1.2870; stop below 1.3000. Target 1.3200.
POSITION TAKER: Long at 1.2860; stop below 1.2975. Target 1.3250.
EURO/US DOLLAR
After yesterday’s ECB meeting it looks increasingly as though the Eurozone will be stuck with its minus 40 basis point interest rate regime for at least another year. Not good news for bankers.
SHORT TERM TRADER: Stopped out at last and rather relieved, to be honest.
POSITION TAKER: Square.
GOLD
No longer overbought as we hover over the top of the trend channel.
SHORT TERM TRADER: Short at 1292; stop well above 1300. First target 1240.
POSITION TAKER: Square.
