Join our community of smart investors

Market Outlook: Japan’s exports fall for 12 consecutive months

Adjusted trade balance in deficit most of this year
December 18, 2019

Overnight November trade data for Japan was published, showing the adjusted trade deficit was 60.8 billion yen because exports fell 7.9 per cent – though worth noting that imports slumped by 15.7 per cent. The drop was blamed mainly on a 5.4 per cent fall in exports to China, Japan’s biggest trading partner. Exports to the rest of Asia fell 5.7 per cent and those to the United States saw a 12.7 per cent decrease, CNBC reports. This is a secular change for a nation which in the 1990s through to 2009 used to run monthly trade surpluses of 500 to 1,000 billion yen.

Yesterday the average temperature across Australia hit a new record high of 40.9 degrees centigrade. The country is also grappling with drought and ferocious bush fires. Yet they, together with Brazil, China and the United States, were singled out at the UN climate change talks last week for blocking progress on establishing a reduction in emission targets.

DAX 30

No bullish momentum to speak of though prices are hovering just under this year’s high (the record high was set early in 2018). Yesterday Germany announced sweeping changes to domestic intelligence and law enforcement to tackle right-wing extremism, international broadcaster Deutsche Welle reports. Using tactics currently used against Islamist terrorists, a new 600 intelligence positions will be created and something like 4500 extra police deployed. Last week stricter gun control laws were introduced.   

 

SHORT TERM TRADER: Square and will remain so over year-end.

 

POSITION TAKER:  Square.

FTSE 100

Holding at the highs for Q4 2019, backing up the theme of British companies being cheap and UK plc as a whole undervalued because of the Brexit drag. Interestingly yesterday PM Boris Johnson banned all his ministers from attending the World Economic Forum in Davos this winter. Seen as perhaps the ultimate schmooze fest for the very rich and famous, its reputation as a forum where ideas are discussed and things get done has been seriously tarnished.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Square.

S&P 500

Overbought as we hover at the record high. Yesterday in a speech at The Forecasters Club of New York Eric Rosengren, head of the Boston fed, said: ‘’If you look at the last two recessions, they were not situations where inflation got out of control. They were situations where asset prices went way up and then came down. So if your goal is to avoid recessions, I think we need to be pretty focused on asset prices not just inflation’’.

 

 

SHORT TERM TRADER: Square.

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

Back down to where we were before opinion polls on the election result late on Friday 12th Dec were released.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Bullish momentum faltering as prices retreat from secular trend line resitance.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

GOLD

Momentum almost turning bearish as prices hold in a tiny range.  

                            

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Short at 1507; stop above 1520. Target 1448.

Nicole Elliott is a long-standing member and Fellow of the Society of Technical Analysts and has taken over the IC’s trading coverage.  She is regularly interviewed and quoted by the financial media, is a conference speaker, and author of several books on charting.