The Fed Funds target now stands at 1.5 to 1.75 per cent because of global developments and muted inflation pressures, business fixed investment and exports remaining weak; two committee members felt there was no need for a 25 basis point cut. They also admitted that there were uncertainties around their current outlook for the US economy.
Published yesterday, the European Central Bank’s stability report showed them once again defending their negative interest rate policy and QE. This, the first with Christine Lagarde at the helm, against a background of dissent at the top, so much so that Germany’s new board member Isabel Schnabel told her nation’s economists to back off criticising the ECB because they threatened the euro. They also warned that non-banks may have taken on too much risk because of ultra-low interest rates.
DAX 30
Momentum marginally bearish after yesterday’s drift from the gravestone doji. This morning the Financial Times reports that Thyssen Krupp has scrapped this year’s dividend as losses have ballooned to €260 million in the 12 months to September
SHORT TERM TRADER: Short at 13200; stop above 13375 with a target at 12335.
POSITION TAKER: Square.
FTSE 100
An increasingly bearish MACD as the index drifts towards this summer’s lows. In an interview with City AM Josef Stadler, UBS’s head off ultra-high net worth clients, said ‘’for the first time in 10 years, billionaires are more concerned than millionaires’’ over possible tax increases on both sides of the Atlantic.
SHORT TERM TRADER: Short at 7370; stop above 7435. Target 7175.
POSITION TAKER: Short at 7300; stop above 7435. Target 7100.
S&P 500
Dipping back under the top of the higher potential broadening top as bullish momentum wanes.
SHORT TERM TRADER: Looking to sell, probably this week.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
What little bullish momentum there is was maintained with yesterday’s close just above the top of the pennant formation.
SHORT TERM TRADER: Small long at 1.2950; stop below 1.2800. Target 1.3350.
POSITION TAKER: Long at 1.2950; stop below 1.2750. Target 1.3350.
EURO/US DOLLAR
The MACD trying to turn bullish despite yesterday’s little hanging man type doji.
SHORT TERM TRADER: Short at 1.1050; stop above 1.1100. Target 1.0930.
POSITION TAKER: Square.
GOLD
No bearish momentum yet yesterday’s doji against the pivotal 1480 level suggests we may have found an interim high.
SHORT TERM TRADER: Short at 1520; stop above 1500. Target 1440.
POSITION TAKER: Short at 1507; stop above 1520. Target 1440.
