July data on inflation published by Eurostat yesterday saw inflation in all too many Eurozone nations come in lower than expected and lower than June’s. For the block as a whole, HICP dropped 0.5 per cent in July dragging the annualised rate down to 1.0 per cent from 1.3 per cent the previous month. Core inflation fell by 0.6 per cent to print just 0.9 per cent in the year. In Germany, it dropped from 1.5 per cent to 1.1 per cent per annum. In Italy inflation is now running at a paltry 0.3 per cent in the year to July while Portugal has the dubious honour of the lowest reading: an annualised rate of minus 0.7 per cent. We reiterate: this means that money tomorrow buys more than it does today, in which case why should savers be recompensed with interest income?
In Europe the slow crawl of corporates embracing corporate and social responsibility has been a feature – albeit a small one – for a few years. Yesterday in the US 181 chief executives, members of a group called the Business Roundtable, signed a letter demanding that firms take into account ‘’all stakeholders’’ – including employees, customers and the wider society, rather than just shareholders – when setting corporate goals. Chairman of the group, JP Morgan’s Jamie Dimon noted, it ‘’will help to set a new standard for corporate leadership’’.
DAX 30
Momentum may no longer be bearish but let’s see if the latest bounce stalls against 38 per cent Fibonacci retracement resistance and the descending trend line.
SHORT TERM TRADER: Short at 11645; stop above 11865. Next target 11200.
POSITION TAKER: Short at 11835; stop well above 11865. First target 11000.
FTSE 100
Surprising to see how this tiny little bounce has cancelled out what had been very strong bearish momentum.
SHORT TERM TRADER: Square.
POSITION TAKER: Short at 7570; stop above 7350. Target 7000, maybe 6865.
S&P 500
The bounce from this month’s low takes the shape of an A, B, C type move where wave C appears to be stalling at the same level as A which also happens to be Fibonacci 61 per cent retracement resistance.
SHORT: Square.
POSITION TAKER: Short at 2915; stop above 2970. First target 2820.
BRITISH POUND/US DOLLAR
From strongly bearish momentum is now zero as the FX market braces for the central bankers’ meeting in Jackson Hole starting Friday and G& leaders in Biarritz over the weekend.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
When even the Bundesbank warns that Germany might already be in recession, as it did yesterday, you know that things in the Eurozone look grim. Then add in Italy where we wait for some pronouncement from the Prime Minister as to what he’ll do now the coalition has fallen apart – and they still plan to bust the budget deficit ceiling.
SHORT TERM TRADER: Small long at 1.1165; stop below 1.1060. Target 1.1340.
POSITION TAKER: Square.
GOLD
Bullish momentum evaporating suddenly as prices look as though they might just be starting to roll over.
SHORT TERM TRADER: Small short at 1500; stop above 1535. Target 1440.
POSITION TAKER: Square.
