Published this morning, The Living Standards Audit 2019 from the Resolution Foundation found that, though average disposable income had just about tripled since 1961, the years 2017-2018 and 2018-2019 look to have been the worst on record – outside of recessions. Over the period typical incomes shrank by 0.3 per cent, a bigger fall than during the recession in the early 1990s. Incomes of adults in their late twenties are lower than they were a decade ago. Young parents under the age of 35 living as a family were the most at risk of poverty. These figures are in sharp contrast to the hype attached to yesterday’s ONS data showing that because unemployment was just 3.8 per cent wage growth over the year had risen by 3.6 per cent. ‘’Regular pay is growing at its fastest for nearly 11 years in cash terms, and the quickest for over 3 years after taking into account inflation’’ said ONS statistician Matt Hughes.
Angela Merkel’s ally Ursula von der Leyen scraped into the EU Commission’s top job, surviving with just 9 more votes than the minimum needed.
DAX 30
Momentum’s turned bearish despite hovering in a little doji on first Fibonacci retracement support yesterday. July’s ZEW survey published yesterday showed that German investors are gloomy indeed. Not only did economic sentiment drop to -24.5 from -21.1 in June, but more alarming the economic situation fell to -1.1, the lowest reading since 2010 as the Eurozone financial crisis was brewing.
SHORT TERM TRADER: Short at 12530; stop above 12600. Target 11800.
POSITION TAKER: Short at 12385; stop above 12665. Target 11600.
FTSE 100
Despite yesterday’s rally momentum turned just bearish. Based on sterling weakness, where cable’s drop to a multi-month low is front page business news, I have already heard analysts talking cable down at parity in the case of a no-deal Brexit; probably the same band of people who predicted a recession in H2 2016 if UK voters voted to leave the EU.
SHORT TERM TRADER: Short at 7550; stop above 7625. Target 7200.
POSITION TAKER: Short at 7515; stop above 7625. Target 7100.
S&P 500
Almost overbought despite the tiny retreat from the upper edge of the huge broadening top chart formation that has been building since early 2018. Note that bankers are warning that if the Fed were to cut interest rates their income from loans would fall. This is already the case in the Eurozone and Scandinavia.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Grabbing the headlines as we drop to the lowest level this year, in turn cable’s weakest since April 2017. Though clearly above the post-referendum lows at 1.1800, 1.2000 and 1.2100, the market is oversold and clinging to the lower edge of the broadening base formation.
SHORT TERM TRADER: Stopped out for a tiny loss.
POSITION TAKER: Stopped out for a small loss.
EURO/US DOLLAR
Sagging again as Bloomberg reports that clients of Deutsche Bank’s prime brokerage unit have been pulling their money out the rate of about €1 billion per day because of counterparty risk.
SHORT TERM TRADER: Long at 1.1240; stop below 1.1180. Target 1.1340.
POSITION TAKER: Square.
GOLD
Nothing interesting on this chart as we remain stuck around the 1400 area.
SHORT TERM TRADER: Short at 1406; stop above 1440. Target 1340.
POSITION TAKER: Short at 1404; stop above 1440. Target 1320.
