The head of the ruling League party, powerbroker Matteo Salvini, yesterday declared the coalition with Luigi Di Maio’s 5-Star Movement unworkable after months of public feuding. PM Giuseppe Conte, who doesn’t belong to either party, said Salvini must explain to the nation why he was bringing the government down; (MPs are on summer holidays). Salvini, in a televised statement yesterday said, ‘’Italy can no longer put up with no’s, we need yes’s, we need to unblock, to build, to work – enough is enough, we must go to elections’’. Since 1945 the country has had 61 different governments in a parliament of 630 seats.
Inflation in China is a mess. Data published this morning showed that producer prices dropped in the year to July by 0.3 per cent – the first negative print in 3 years. Meanwhile consumer prices rose by 2.8 per cent in the year to July, slightly higher than expected. Even worse for residents, food prices soared by 9.1 per cent, mainly caused by African swine fever (pork +39.1 per cent) and very cold and wet May and June, hitting fruit growers (up 27 per cent) and horticulture.
DAX 30
Retraced and stalled at 38 per cent Fibonacci retracement resistance; the MACD remains clearly bearish.
SHORT TERM TRADER: My stop was, I think, too tight here so have been cut out of my short position.
POSITION TAKER: Short at 11835; stop well above 12200. First target 11000.
FTSE 100
Stalling just under Fibonacci 38 per cent retracement resistance in a very slow market. Yesterday the FCA announced that ETFs are not a threat to the system, that it ‘’does not detect any initial signs of concern to financial stability’’ because there are players who are willing to step in and maintain liquidity at times of stress. We’ll see.
SHORT TERM TRADER: Small short at 7200; stop above 7400. Target 7000.
POSITION TAKER: Short at 7570; stop above 7430. Target 7000.
S&P 500
Quite the bounce as we hit Fibonacci 61 per cent retracement resistance. Shares in hail-riding company Uber, which had been up 8 per cent early yesterday, dropped to a 16 per cent loss in after-hours trading yesterday when it announced a Q2 $5.2 billion loss and revenue which missed expectations.
SHORT: Stopped myself out at a tiny profit.
POSITION TAKER: Another loss here.
BRITISH POUND/US DOLLAR
Creeping along the bottom and today Bloomberg helpfully reports that a drop to parity for cable ‘’is an idea that’s starting to take hold’’.
SHORT TERM TRADER: Small long at 1.2180; stop below 1.2080. Target 1.2500.
POSITION TAKER: Square.
EURO/US DOLLAR
Stuck around 1.1200, the 50 per cent retracement area.
SHORT TERM TRADER: Small long at 1.1165; stop below 1.1060. Target 1.1340.
POSITION TAKER: Square.
GOLD
Though overbought it’s holding really rather well at this year’s highs.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
