From 8 per cent to 10 per cent sounds very little by EU standards, but the last 2 times the rate was raised – to 5 per cent in 1997 and 8 per cent in 2014 – it caused an economic recession and depressed consumer sentiment. There was a small rush on Monday to beat the move which came into force yesterday, as initially advertised. With the country already suffering the side-effects of President Trump’s trade war and their dispute with South Korea, the leading composite index is already well below 2014 and 2007 peaks.
Yesterday Dutch farmers drove their tractors into The Hague and Scheveningen beach protesting victimisation in the climate change debate; they caused tailbacks over 1136 kilometres of roads around the city at morning rush-hour. The government has proposed speed reductions to cut pollution, inefficient beef farms to be closed permanently, and the halving of pig herds and poultry flocks. Agricultural workers feel moves by Dutch MPs have been encouraged by city-dwelling activists who have spared the airline industry in the fight to meet climate change targets.
DAX 30
A fairly comprehensive rejection from this month’s highs with a bearish engulfing candle while the MACD remains bearish. Published yesterday data from EU manufacturing purchasing managers were universally grim, the Eurozone suffering the worst month in 7 years. Inflation across the single currency region dipped again to an annualised 0.9 per cent.
SHORT TERM TRADER: Short at 12365; stop above 12500. Target 11600.
POSITION TAKER: Short at 12350; stop well above 12500. Target 11400.
FTSE 100
Back below 7400 and looking as though the rejection at the Fibonacci 61 per cent retracement resistance might turn momentum bearish. Manufacturing PMI in Britain 48.3 and British Retail Consortium data out overnight shows that August was another lousy month for the industry.
SHORT TERM TRADER: New small short at 7295; stop above 7440. Target 7100.
POSITION TAKER: Square.
S&P 500
October hasn’t got off to a good start with the first daily close below 2960 in almost a month. Data published yesterday was also grim, the manufacturing sector contracting in September at its fastest rate in 10 years with a reading of 47.8.
SHORT TERM TRADER: New small short at 2945; stop above 3025. Target 2820.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
A long-legged doji yesterday underlines the jitters in this currency pair.
SHORT TERM TRADER: Small long at 1.2290; stop well below 1.2200. Target 1.2500.
POSITION TAKER: Square.
EURO/US DOLLAR
Holding just above yesterday morning’s low but momentum is clearly bearish.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Closing again below 1480 turns the MACD a little more bearish.
SHORT TERM TRADER: Short at 1520; stop above 1535. Target 1440.
POSITION TAKER: Short at 1507; stop above 1560. Target 1440.
