Yesterday, for the first time ever, the German government issued a brand new 10-year sovereign Bund with a negative yield. Existing 10-year paper has dipped into negative territory (about minus 15 basis points) in 2016 and again last month, but yesterday’s was priced at minus 24 basis points; 2-year Schatz yield even less. Simultaneously Portugal sold a new 10-year sovereign issue at a record low yield of 64 basis points – paper which, at the height of the Eurozone’s 2012 crisis yielded over 17 per cent. This push to new low yields on some EU paper was caused by the view that not only will the ECB keep its key rate at the current minus 40 basis points and re-introduce QE, but it might cut rates this year.
Automobile sales in China fell again in May, by a record 16.4 per cent, the 11th consecutive monthly decline. In fact, in 2018 car sales fell for the year as a whole, the first time this has been the case in 20 years.
DAX 30
Doing nothing special as we hold between 12000 and 12200.
SHORT TERM TRADER: Short at 11870; stop above 12200. Target 11325.
POSITION TAKER: Square.
FTSE 100
A sort of hanging man candle yesterday but still the commodity channel index did not turn down.
SHORT TERM TRADER: Small short at 7385; stop above 7470. Target 7100.
POSITION TAKER: Square.
S&P 500
Clearly struggling to hold at current levels yet the commodity channel index has yet to turn down.
SHORT TERM TRADER: Short at 2885; stop above 2960. Target 2800.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Stuck in the mud – which is better than free-fall, of course.
SHORT TERM TRADER: Small long at 1.2675; stop below 1.2640. Target 1.2925.
POSITION TAKER: Square.
EURO/US DOLLAR
Momentum is still bullish despite yesterday’s bearish engulfing candle – which might be part of a small double top, as we hold just above what had been trend line resistance.
SHORT TERM TRADER: Long at 1.1315; stop below 1.1250. Target 1.1450.
POSITION TAKER: Square.
GOLD
Holding up rather better than expected just under a band of important long term resistance.
SHORT TERM TRADER: Short at 1333; stop above 1360. Target 1285.
POSITION TAKER: Short at 1340; stop above 1360. Target 1270.
