Late yesterday Chinese state owned news agency Xinhua said that local governments and financial institutions were ‘’encouraged to use special bonds and other market-based financing methods to support key areas and major projects’’. The CSI 300 index rallied 2.3 per cent by lunch time.
The Financial Times reports that former chief economic advisor to the Indian government, Arvind Subramanian, published a research paper at Harvard University’s Kennedy School, claiming that economic growth had been overstated. ‘’The heady narrative of guns-blazing India – that statisticians led us to believe – may have to cede to a more realistic one of an economy growing solidly but not spectacularly’’. GDP growth between 2011 and 2017 was more likely to be in the 4.5 per cent range rather than the 7 per cent originally published, which explains the country’s jobless growth.
DAX 30
Hovering around the trend line with no momentum. Note that in an interview with the Financial Times new head of the European Banking Authority José Manuel Campa said new powers accorded to his institution weren’t sufficient to stem the tide of dirty money sweeping through the EU.
SHORT TERM TRADER: Short at 11870; stop above 12200. Target 11325.
POSITION TAKER: Square.
FTSE 100
Retracing over 61 per cent of spring’s fall. Like ‘ten blue bottles, standing on the wall’, the beauty parade for Tory party leadership – and therefore the position of PM – has started in earnest.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
S&P 500
A dragonfly doji, after last week’s strong rally, at 76.4 per cent Fibonacci retracement resistance and the commodity channel index looking set to turn down. This is not a bullish picture. CNBC reports that President Trump yesterday threatened China with more tariffs if President Xi Jinping doesn’t attend the G20 summit in Japan on the 28th of this month.
SHORT TERM TRADER: Might re-sell on today’s close.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Nothing going for this currency pair.
SHORT TERM TRADER: Small long at 1.2675; stop below 1.2600. Target 1.2925.
POSITION TAKER: Square.
EURO/US DOLLAR
Close to this year’s strongest levels of bullish momentum. Yesterday credit rating agencies came out against President Macron’s view that if, as Boris Johnson has suggested, the UK withholds its next £39 billion divorce contribution to the EU, that would not represent a sovereign debt default.
SHORT TERM TRADER: New long at 1.1315; stop below 1.1200. Target 1.1450.
POSITION TAKER: Square.
GOLD
Gold, and more so silver, struggling at current levels with a series of shooting star type daily candles.
SHORT TERM TRADER: Short at 1333; stop above 1360. Target 1285.
POSITION TAKER: New short at 1340; stop above 1360. Target 1270.
