Though the classic 25 basis point move had been expected by some, today the Reserve Bank of New Zealand lopped 50 basis points off its official cash rate taking it down to a new record low of 1.00 per cent. It was as recently as May this year that they trimmed 25 basis points to take it to the then record low of 1.5 per cent. A particularly terse statement noted: ’’The MPC agreed that a lower OCR is necessary to continue to meet its employment and inflation objectives’’. Sovereign bond yields and the currency both dropped swiftly on this news.
Reuters reports that this morning the head of China’s Hong Kong and Macau Affairs Office warned that HK was facing its worst crisis since handover in 1997. Zhang Xiaoming added, ‘’Hong Kong’s crisis…has continued for 60 days, and it is getting worse.’’ Protestors were warned not to underestimate central government strength and determination, and that those who break the law should be punished by the local police. State-backed The Global Times published a video showing thousands of mainland police officers in an anti-riot training drill in Shenzhen.
DAX 30
Yesterday’s bounce stalled at first Fibonacci retracement resistance. This morning June industrial production data from Germany dropped a bigger-than-expected 1.5 per cent on the month taking the annualised fall to 5.2 per cent, its biggest decline since November 2009.
SHORT TERM TRADER: New little short at 11650, and will add to 11850; stop above 12200. Target 11000.
POSITION TAKER: Short at 11835; stop well above 12200. First target 11000.
FTSE 100
Momentum is still more bearish than it’s been all year and a slanging match with Brussels meant that yesterday’s bounce stalled at first Fibonacci retracement resistance.
SHORT TERM TRADER: New little short at 7200; stop above 7400. Target 7000.
POSITION TAKER: Short at 7570; stop above 7430. Target 7000.
S&P 500
Bit more of a bounce, retracing a Fibonacci 38 per cent of recent losses.
SHORT: Short at 2945; stop above 2920. Target 2780 again.
POSITION TAKER: New little short at 2870; stop above 2930. Target 2735.
BRITISH POUND/US DOLLAR
Literally crawling on its hands and knees as it tries to move up off this year’s lows. Nevertheless, the commodity channel index has inched into bullish territory.
SHORT TERM TRADER: New tiny little long at 1.2180; stop below 1.2080. Target 1.2500.
POSITION TAKER: Square.
EURO/US DOLLAR
Momentum has turned bullish as the euro swings around the mid-point of the range since late June.
SHORT TERM TRADER: Small long at 1.1165; stop below 1.1060. Target 1.1340.
POSITION TAKER: Square.
GOLD
Lots of media excitement as we get closer to the psychological $1500 per ounce. Overbought and some are looking at its value in other currencies.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
