James Dyson may or may not have paid the asking $79 million for Singapore’s most expensive penthouse this week, to get closer to his company’s new headquarters. What we do know is that data published by the Ministry of Trade and Industry today show that not only was growth well below analysts’ expectations, but Q2 growth was the weakest in a decade. Q2 GDP grew by just 0.1 per cent, dragged down by the manufacturing sector, and well below the revised Q1 figure of 1.1 per cent. This takes the quarterly seasonally adjusted rate to minus 3.4 per cent, the biggest quarterly contraction since the 4.1 per cent fall in Q3 2012.
The final forecast for the Eurozone with Christine Lagarde at the helm of the IMF does not make cheerful reading. It urges the ECB to continue its monetary easing because the Eurozone faces ‘a prolonged period of anaemic growth and inflation’. [Not quite sure what they mean about inflation as it hasn’t hit the ECB’s 2 per cent target in years.] This year’s growth is expected to come in at 1.3 per cent versus 2018’s 1.9 per cent. But then, as it’s always ‘jam tomorrow’ because it should improve to 1.6 per cent.
DAX 30
A bearish MACD as the market rolls over gently. Eurozone punters and investors struggling to get their heads around such very low sovereign bond yields to maturity.
SHORT TERM TRADER: Short at 12530; stop well above 12665. Target 11800.
POSITION TAKER: New short at 12385; stop above 12665. Target 11600.
FTSE 100
Still holding above the psychological 7500, where we were in April, while the commodity channel index carries on barrelling down.
SHORT TERM TRADER: Short at 7550; stop above 7625. Target 7200.
POSITION TAKER: New short at 7515; stop above 7625. Target 7100.
S&P 500
Dow Industrials made a new high above 27,000 yesterday but not entirely sure where the S&P’s high is exactly. IG have it today at 3008, coinciding with the top of the broadening top formation that has been forming since early 2018. Overbought on the RSI.
SHORT TERM TRADER: Short at 2975; stop well above 3000. Target 2800, and then maybe 2600.
POSITION TAKER: Looking for signs of topping.
BRITISH POUND/US DOLLAR
The commodity channel index turned up on yesterday’s close following this week’s harami 2-candle pattern, adding weight to our view that we’ve been building a broadening base since late May.
SHORT TERM TRADER: Long at 1.2510; stop well below 1.2500. First target 1.2750.
POSITION TAKER: New long at 1.2525; stop below 1.2440. Target 1.2800.
EURO/US DOLLAR
Hovering at 1.1250 with a dragonfly doji yesterday denoting indecision. Not much bullish technically though the IMF’s report this week says it is slightly undervalued and that surplus exporting countries should invest more to rebalance the exchange rate.
SHORT TERM TRADER: Long at 1.1240; stop below 1.1180. Target 1.1340.
POSITION TAKER: Square.
GOLD
A potential triple top at 1439? Yesterday the London Bullion Market Association insisted that the gold market in London is more liquid than that of government bonds. They are worried about new rules on cash buffers banks must hold when they lend out.
SHORT TERM TRADER: Short at 1406; stop above 1440. Target 1340.
POSITION TAKER: Short at 1404; stop above 1440. Target 1320.
