In Britain, anything that goes wrong, or even slightly awry, is blamed on Brexit. Poor investment banking results? Blame it on market turbulence in Q4 2018. This morning it’s French bank Société Generale’s turn. Its revenues will not grow at 3 per cent as planned; its return on equity will not be 11.5 per cent but between 9 and 10 per cent. It will save €500 million by cutting back on its fixed income, currency and commodity division (FICC) – just as Goldman Sachs said it would do earlier this week.
Today the Bank of England publishes its Quarterly Inflation report, holds an MPC meeting to decide on the Bank Rate, with a Q&A session with the press later. Now, we all know they are independent from government but, realistically, with the political and economic situation we’re in, could one really hand on heart suggest a rate rise was the correct thing to do? And can you imagine what Donald Tusk would have to say on the subject?
DAX 30
Stalling yet again around the 50 per cent retracement level taken from October’s high. Such tiny daily ranges too.
SHORT TERM TRADER: Small short at 11180; stop above 11400. First target 10600.
POSITION TAKER: Square.
FTSE 100
Soaring and suddenly stopping at the Fibonacci 61 per cent retracement level from October’s high.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
S&P 500
Looking increasingly like this index is running out of steam.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Just about clinging to Fibonacci 38 per cent retracement support of the most recent rally. Yesterday early morning we reported that the FT said that ‘the political blame game has started over responsibility for a chaotic no-deal exit’ by Britain from the EU. I think we might have seen the first of the fall-out already yesterday as Donald Tusk lost his rag.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Divergence between price action and Chaikin’s oscillator.
SHORT TERM TRADER: Will probably go long today as close to 1.1300 as possible.
POSITION TAKER: Square.
GOLD
Drifting gently back down towards where we started last week.
SHORT TERM TRADER: Small short at 1317; stop above 1328. Target 1240.
POSITION TAKER: Square.
