March Purchasing Managers’ Indices published yesterday by IHS Markit showed a drop in the manufacturing sector across the Eurozone – except in the UK where the reading increased from 52.1 in February to 55.1 (stockpiling was blamed). The reading in Germany dropped to 44.1 from 47.6, the lowest score since July 2012 (at the depth of the Eurozone debt/banking crisis); order books and new foreign business both fell at the fastest pace since April 2009. France’s reading fell below the critical 50 point, to 49.7, Spain’s is back above that point at 50.9, while Italy’s is stuck below at 47.4.
CNBC reports this morning that Moody’s Analytics’ chief economist Mark Zandi warned that the global economy is ‘highly likely’ to go into recession unless a Sino-US trade deal is reached within 3 months. For good measure, he added that a ‘no deal’ Brexit might also send Europe into a recession, noting ‘’business sentiment across the globe is extraordinarily fragile’’.
DAX 30
Three consecutive monthly rallies have ended in a doji, retracing half of last year’s drop, and at the neckline of an important head and shoulders top. This is not bullish.
SHORT TERM TRADER: Nursing a nasty loss on this morning’s sudden burst above 11600.
POSITION TAKER: Short at 11550; stop above 11825. Target 10600.
FTSE 100
Almost overbought again as we’re back up at this year’s high.
SHORT TERM TRADER: Short at 7190; stop above 7370. Target 6830.
POSITION TAKER: Short at 7190; stop above 7370. First target 6600.
S&P 500
Another couple of pips higher but not yet overbought.
SHORT TERM TRADER: Short at 2800; stop above 2865. Target 2600.
POSITION TAKER: Short at 2800; stop above 2900. Target 2550.
BRITISH POUND/US DOLLAR
Thrashing around, looking for direction, as the farce in Westminster escalates, complete with semi-naked climate change activists.
SHORT TERM TRADER: Tiny long at 1.3020; stop well below 1.2950. Target 1.3300.
POSITION TAKER: Square.
EURO/US DOLLAR
Almost oversold as we draw closer to this year’s low.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
A little evening star candle yesterday under the psychological 1300 level might add a little bearish momentum for a test of 38 per cent Fibonacci retracement support at 1275.
SHORT TERM TRADER: Small short at 1291; stop above 1320. Target 1240/1250.
POSITION TAKER: Short at 1292; stop above 1350. Target 1185.
