Data published overnight by Japan’s Ministry of Finance showed that during the month of May imports dipped 1.5 per cent while exports contracted by a rather alarming 7.8 per cent. This took the adjusted trade deficit to 609 billion yen, the lowest reading since February 2015 and in stark contrast to February 2017’s 611-billion-yen surplus; the speed of the drop mirrors the shocking decline between 2010 and 2014. Some are suggesting the unprecedented 10-day holiday to mark the new emperor’s ascension was to blame. In a blow to Saudi Arabia’s Crown Prince Mohammed bin Salman, car maker Toyota decided not to go ahead and build a car plant in his country.
Bloomberg reports that President Trump has contacted White House lawyers to see if there was a way he could demote Federal Reserve Chairman Jerome Powell; today the US central bank meets to decide on monetary policy. Yesterday the President also attacked the ECB’s Mario Draghi for his comments suggesting more easing in Eurozone monetary policy, claiming it amounted to currency manipulation.
DAX 30
Soaring from the neckline of the head and shoulders that started in 2017, keeping momentum bullish. This as European sovereign bond yields hit new record lows, and many are negative, as Mario Draghi suggested in a speech yesterday that there may be a need to cut rates again and to add to QE because of the weak economy.
SHORT TERM TRADER: Stopped out of my short position for a hefty loss.
POSITION TAKER: Square.
FTSE 100
Settling above final Fibonacci retracement resistance yet the commodity channel index is still flashing a bearish warning. Yesterday Blackstone’s Stephen Schwarzman donated £150 million to the University of Oxford, underlining just how much money there is to be made in fund management.
SHORT TERM TRADER: Small short at 7385; stop above 7470. Target 7100.
POSITION TAKER: Square.
S&P 500
Almost overbought again as we trade within spitting distance of the record high, above the highest Fibonacci retracement resistance. The Fed is widely expected to sit on its hands at today’s FOMC meeting but cuts later this year are being discounted in market prices.
SHORT TERM TRADER: Short at 2885; stop above 2960. Target 2800.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Keeping pace with euro weakness as the PM beauty contest hots up. Yesterday, speaking in Sintra, BoE governor Mark Carney said monetary policy helped give Europe ‘’a bright future’’ and that forward guidance, a thing he pioneered, had been effective in managing expectations. He insisted his comments contained ‘’no messages – coded or clarion’’ about tomorrow’s interest rate decision.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Momentum dipping into bearish territory as the US dollar gains a little against many currencies.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Overbought, and very odd price action, as we lunge at, then slump form, a band of secular resistance.
SHORT TERM TRADER: Short at 1333; stop above 1360. Target 1285.
POSITION TAKER: Short at 1340; stop above 1360. Target 1270.
