Data out this morning showed a surprising drop of 2.7 per cent in exports from China, and another increase in imports, so that instead of analysts’ estimates of a surplus of $35 billion it was a fraction of that at $13.8 billion. This is an erratic series, and deficits were seen in 2009 and again in several months over the following years, but today’s number is towards the lower end of what’s been seen since international trade started booming in 2000.
As the European Commission yesterday reduced estimated economic growth in the region for this year and next, budget deficits have also come under scrutiny, especially that of Italy. They now calculate that rather than being capped at 2.04 per cent of GDP as agreed last year, it’ll hit 2.5 per cent this year and 3.5 per cent in 2020 – way above the 3 per cent maximum. Italian PM Giuseppe Conte struck back saying the calculations ‘seem ungenerous’, ‘bogus’ and show a ‘prejudiced attitude’. Brussels estimates that total debt to GDP will hit 133 per cent this year, and 135 per cent next year, the second highest in the EU and above the ceiling set.
DAX 30
No longer overbought on the daily chart this week as the index gives up much of April’s gains. In order to feel more confident in our negative view we need a drop below 11800, the neckline of the massive head and shoulders that’s been building since early 2017.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
FTSE 100
This month momentum’s been bearish on the daily chart, and increased yesterday as what had been trend line support acted as resistance.
SHORT TERM TRADER: New short at 7245; stop above 7460. Target 7020.
POSITION TAKER: Square.
S&P 500
Quickly unravelling the overbought situation as small losses cause an unwarranted media outpouring.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Becoming a perennial disappointment, then again, holding up quite well considering.
SHORT TERM TRADER: Long at 1.3040; stop below 1.2990. Target 1.3300.
POSITION TAKER: Square.
EURO/US DOLLAR
Just about hanging on in there.
SHORT TERM TRADER: Long at 1.1190; stop below 1.1140. Target 1.1400.
POSITION TAKER: Square.
GOLD
Momentum is no longer bearish on the daily chart as we move into a third week of dithering around the pivotal 1276 level.
SHORT TERM TRADER: Short at 1283; stop above 1290. Next target 1260.
POSITION TAKER: Short at 1292; stop above 1290. Target 1185.
