The Financial Times reports that today the Indian central bank shaved another 25 basis points off the key interest rate, taking it down to 5.75 per cent. The third such cut this year, it follows very disappointing Q1 2019 GDP data released last week where the annualised rate of 5.8 per cent was the weakest in 5yyears; rarely has economic growth in this emerging market nation been below 6 per cent. Whether the move will result in much needed job creation is in doubt because the weak state of the banking industry in the country means that rate cuts are not being passed on.
Yesterday the European Commission wrote to the Italian government saying they hadn’t done enough to get their finances in order and comply with EU rules. They had not reduced their debt sufficiently and that a disciplinary process was ‘warranted’ and financial penalties were likely to kick in soon. Retaliating, Italian PM Giuseppe Conte and his two deputies put their squabbles to one side and questioned the Commission’s calculations.
DAX 30
Sloppy price action as we dither on the neckline of the massive head and shoulders that’s been building for months, yesterday with a doji-style candle. Note that all eyes will be on the ECB’s meeting today.
SHORT TERM TRADER: Short at 11870; stop above 12200. Target 11325.
POSITION TAKER: Short at 11700; stop well above 12000. Target 11000.
FTSE 100
Holding quite comfortably above what looks like increasingly important support between 7150 and 7200. Nice to see a handful of 90-yearold veterans stealing the show at the D-Day celebrations.
SHORT TERM TRADER: Short at 7100; stop above 7320. Target 6875.
POSITION TAKER: Short at 7275; stop above 7320. Target 6875.
S&P 500
Holding towards the middle of May’s range with no features of note on the chart.
SHORT TERM TRADER: Short at 2880; stop above 2845. Target 2720.
POSITION TAKER: Short at 2805; stop above 2870. Target 2625.
BRITISH POUND/US DOLLAR
No bullish momentum in sight with a by-election in Peterborough today. There are 15 candidates for this Westminster seat and many believe the Brexit candidate has a chance of the first of his party to become an MP.
SHORT TERM TRADER: Small long at 1.2675; stop below 1.2600. Target 1.2925.
POSITION TAKER: Square.
EURO/US DOLLAR
Now, there’s a surprise! Surging to 1.1300 only to be categorically slapped down by second trend line resistance. The commodity channel index might turn down at today’s close. Keeping a close eye.
SHORT TERM TRADER: Covered my long position at a small profit as yesterday’s price action isn’t exactly bullish.
POSITION TAKER: Square.
GOLD
Very overbought with a shooting star type candle against an area of resistance (1340-1360) where it’s failed several times over the last 3+ years.
SHORT TERM TRADER: New short at 1333; stop above 1360. Target 1270.
POSITION TAKER: Square.
