Yesterday morning the Confederation of British Industry published its August distributive trades survey; it was very negative indeed. From July’s -16 reading, it slumped to -49, retail sales collapsing at the fastest rate since December 2008’s -55 record low. For a series going back to 1984, previous bearish readings in the 1990’s were no lower than -11 and in the 2000’s -13. In the US August Markit sentiment readings, with a far shorter history, saw the manufacturing sector move into contraction at 49.9 for the first time since the financial crisis, services slip from 53.0 to 50.9 and the composite from 52.6 to 50.9 also.
Yesterday Indonesia’s central bank trimmed its key rate by 25 basis points to 5.5 per cent, a surprise to many. Governor Perry Warjiyo told CNBC ‘’this is a pre-emptive move to support our growth momentum and to anticipate the possibility of downward risks on the global economic outlook’’. He also suggested there may be more cuts in the pipeline, here and in other Asian countries, as Indonesian inflation should remain within its target range of 2.5 to 4.5 per cent per annum.
DAX 30
Stuck on trend line resistance but retreating from 38 per cent Fibonacci retracement resistance. Today the Financial Times reports that French lender BNP Paribas will assume control of Deutsche Bank’s prime brokerage unit. Depending on how clients react up to 800 staff at the German lender will be transferred, saving on redundancy costs.
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
The MACD is no longer bearish as we hover at 7100 with a series of marginally lower daily highs.
SHORT TERM TRADER: Small short at 7145; stop above 7300. Target 6850.
POSITION TAKER: Short at 7570; stop above 7325. Target 7000, maybe 6865.
S&P 500
Zero momentum as we remain stuck under 2940. Many members of the Fed delivering speeches this afternoon at Jackson Hole, Wyoming.
SHORT: Small short at 2910; stop above 2970. Target 2820.
POSITION TAKER: Short at 2915; stop above 2970. First target 2820.
BRITISH POUND/US DOLLAR
Perking up a little, popping above the 1.2200 parapet for the first time this month. Gaining against the euro too to £0.9035 this morning. A weekly close above 1.2200 completes a very gentle rounded base.
SHORT TERM TRADER: Small long at 1.2135; stop below 1.2000. Target 1.2400.
POSITION TAKER: Will buy cable on a close above 1.2200 tonight.
EURO/US DOLLAR
Lifeless, but let’s see what happens over the weekend in Biarritz and the Spanish border.
SHORT TERM TRADER: Small long at 1.1165; stop below 1.1060. Target 1.1340.
POSITION TAKER: Square.
GOLD
Still holding above the bottom edge of an inverted V-shaped pattern.
SHORT TERM TRADER: Small short at 1500; stop above 1535. Target 1440.
POSITION TAKER: Square.
