Switzerland’s ties to the EU are complex, consisting of 120 bilateral agreements, but up until now the rules on Swiss stock exchanges and bourses around the EU have been deemed to be as tough as each other’s. This month the EU has refused to extend this concept beyond the end of June, so the Swiss government has retaliated by threatening to ban EU firms from trading and holding shares listed in Zurich and Berne. The trouble is that 3 of Europe’s biggest listed companies, Nestle, Novartis and Roche, are in Switzerland.
Today at Portcullis House CEO and chairman of the FCA, Andrew Bailey and Charles Randall, face a second grilling by the Commons Treasury Select Committee. According to the Financial Times Mr Bailey is the bookies’ favourite to be the next governor of the Bank of England; his chances might slip today as the FCA’s effectiveness is in question.
DAX 30
Bullish momentum levels are down to where they were at the beginning of this month as the index looks increasingly tired at current levels. Worth noting that yesterday Italy’s biggest bank, Unicredit, has put on hold any plans to take over its German counterpart Commerzbank.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
FTSE 100
Another index with fading bullish momentum and a slightly top-heavy aspect as we approach the half-year point.
SHORT TERM TRADER: Small short at 7385; stop above 7470. Target 7100.
POSITION TAKER: Square.
S&P 500
Overbought, unsurprisingly, and close to record highs as traders are pencilling in 2 25 basis point Fed rate cuts this year. According to CNBC at the latest FOMC rate-setting meeting 8 out of 17 Committee Members were forecasting rate cuts. This should explain the generalised small move to US dollar weakness this month.
SHORT TERM TRADER: Short at 2885; stop above 2960. Target 2800.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Testing the top of what might be a broadening base chart pattern.
SHORT TERM TRADER: Long at 1.2740; stop below 1.2630. Target 1.2900.
POSITION TAKER: Might try going long here too if broadening base completes with a daily close above its upper edge.
EURO/US DOLLAR
Kicking myself for being away at the end of last week and therefore not jumping on this rally; the euro has now retraced just over 38 per cent of its losses since October last year. Reports out yesterday suggest that the EU will halt plans to fine the Italian government for breaches of fiscal rules, writes City AM.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Soaring to its most overbought reading in over 3 years and its highest price since May 2013. It has now retraced just over 38 per cent of the losses since 2011’s record high.
SHORT TERM TRADER: Square.
POSITION TAKER: Square and not sure I trust a move of this speed.
