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Market Outlook: London and South East house prices fall

Grow at slowest since 2012 nationwide
April 18, 2019

Tuesday’s good news on UK jobs and wages has been dented this morning by more data from the ONS, this time on the lack of growth in house prices – as inflation is running at 1.9 per cent. Across the country house prices rose just 0.6 per cent to £226,000 in the year to February – the slowest pace September 2012. The south east saw a fall to £316,000, the first drop since 2011. London prices dropped 3.8 per cent, building on January’s 2.2 per cent fall, to £460,000.

The backlash against President Macron started up again, this time over his handling of the Notre Dame fire. The pre-recorded televised address that was due to air on Monday evening (and was replaced by a live speech where he claimed to have saved the cathedral) included the news that he was to scrap the Ecole Nationale d’Administration (ENA). Set up in 1945 by Charles de Gaulle, it has trained nearly all of France’s top politicians, civil servants, and business bosses, including the current President, and is seriously elitist. The millions of euros donated by France’s richest families for reconstruction have also irked the left because of their sheer scale and speed. The Pinault family, which Forbes estimates to be worth $55.5 billion in 2018, said they will not be claiming tax breaks of up to 60 per cent on the €100 million they kicked off with.

DAX 30

Hints of divergence as we’re fractionally less overbought after hitting a new high for this year at 12195. Yesterday German Economy minister Peter Altmaier halved expected GDP growth to 0.5 per cent this calendar year. In January, he had predicted 1.8 per cent, then almost halved it to 1 per cent. Not worth the paper it’s written on.

 

SHORT TERM TRADER: Square.

 

POSITION TAKER:  Square.

FTSE 100

Going nowhere and still very overbought.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Square.

S&P 500

Overbought and Morgan Stanley CEO James Gorman, releasing solid Q1 results beating market expectations yesterday, warned that banks might once again see the market turmoil of Q4 2018.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

Yesterday’s YouGov poll showing Nigel Farage’s new Brexit party in the lead (27 per cent) for next month’s EU parliamentary elections, versus Labour’s 22 per cent and the Tories’ 12 per cent having zero effect on the pound.

 

SHORT TERM TRADER:  Tiny long at 1.3020; stop below 1.2950. Target 1.3300.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Stalling, as it’s done all week, against trend line resistance.

 

SHORT TERM TRADER:  Long at 1.1245; stop below 1.1170. Target 1.1380.

 

POSITION TAKER:  Long at 1.1225; stop below 1.1170. Target 1.1425.

GOLD

Settling just under key support yesterday has increased bearish momentum. In what looks increasingly like the neckline of an irregular head & shoulders top, we’re adding to shorts in stages.

                            

SHORT TERM TRADER:  Added to short on yesterday’s close at 1274 giving me an average price of 1283; stop above 1300. First target 1280, then 1260.

 

POSITION TAKER:  Short at 1292; stop above 1320. Target 1185.

Nicole Elliott is a long-standing member and Fellow of the Society of Technical Analysts and has taken over the IC’s trading coverage.  She is regularly interviewed and quoted by the financial media, is a conference speaker, and author of several books on charting.