Many things in Japan have been lower than those in other G7 countries for a very long time: interest rates, inflation, bond yields, crime and unemployment too. However, the job-to-applicant ratio dropped too, to 1.59 from 1.61 in June, suggesting that over the medium-term unemployment may stop falling. Despite these encouraging numbers, retail sales also fell, by 2.3 per cent across the board in the month to July and by 4.8 per cent at large retailers, one of the biggest drops since 2009. Tokyo inflation, excluding fresh food (which is their preferred measure) dropped to an annualised 0.7 per cent even as an increase in sales tax looms in October.
After this week’s IMF visit to Argentina, where finance minister Hernan Lacunza suggested that $100 billion of his country’s sovereign debt be ‘reprofiled’, yesterday ratings agency Standard and Poors downgraded the nation’s debt rating to SD – Selective Default. Of the amount outstanding $57 billion was extended less than a year ago by the IMF itself. Were they to skip paying the money back, this would be Argentina’s 9th default and the third since 2000.
DAX 30
Breaking and settling above immediate trend line resistance, increasing bullish momentum a tad. The question now is whether the index will use this as a springboard for a corrective bounce.
SHORT TERM TRADER: Stopped out on this morning’s creep above 11865.
POSITION TAKER: Short at 11835; stop well above 11865. First target 11000.
FTSE 100
Also breaking above immediate trend line resistance but bullish momentum is negligible suggesting further gains are likely to be hard--won.
SHORT TERM TRADER: Small short at 7145; stop well above 7200. Target 6850.
POSITION TAKER: Short at 7570; stop above 7325. Target 7000, maybe 6865.
S&P 500
Still stuck between 2820 and 2940, veering between the two depending on swings and rumours in trade talks. Remember that Monday 2nd September is a Labour Day holiday in the US and over the weekend a hurricane is expected to move towards Florida. Because of this President Trump has cancelled a planned trip to Poland so that he can monitor his estates. I’m wondering whether the First Lady will again choose to wear stilettos.
SHORT TERM TRADER: Small short at 2910; stop above 2970. Target 2820.
POSITION TAKER: Short at 2915; stop above 2970. First target 2820.
BRITISH POUND/US DOLLAR
What little bullish momentum there was has disappeared yet cable continues to react well to the extraordinary manoeuvres in parliament – and beyond.
SHORT TERM TRADER: Small long at 1.2135; stop below 1.2050. Target 1.2380.
POSITION TAKER: Small long at 1.2290; stop below 1.2000. Target 1.2580.
EURO/US DOLLAR
Back down at this year’s lows despite ex-PM Guiseppe Conte agreeing to Italian President Sergio Matarella’s request to try and for a coalition government on behalf of the 5-star party.
SHORT TERM TRADER: Stopped out at last for a small loss and really quite relieved about this.
POSITION TAKER: Square.
GOLD
Easing off overbought levels as we consolidate neatly in a little range at multi-year highs.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
