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Market Outlook: UK posts a record trade surplus in November

As imports collapse by 7.8 per cent
January 14, 2020

I didn’t think I’d see the day when Britain managed a trade surplus, something it’s failed at miserably since the mid-1980s; from 1955 to 2019 the UK had an average trade deficit of £1263 million. Published by the ONS yesterday, November’s trade surplus was £4031 million, a sensational record high and compares with a record £8145 deficit in March 2019. The trade in goods alone resulted in a deficit of £5256 in November and a non-EU surplus in goods and services of £1734.

Chinese December trade data was published this morning, and here too the surplus improved to CNY 329 billion from CNY 274 billion in November. Its trade surplus with the US slipped to $23.18 billion from $24.6 billion the previous month. Remember that tomorrow, the 15th January, is the date the first part of a trade deal between these two nations is due to be signed. As a gesture of goodwill, the US has taken China off their ‘currency manipulator’ list.

DAX 30

Bullish momentum was stronger than I’d thought on yesterday’s close, yet the index is still hovering just under the record high at 13600 set in January 2018.   

 

SHORT TERM TRADER: Square.

 

POSITION TAKER:  Square.

FTSE 100

Moving cautiously sideways with no momentum.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Square.

S&P 500

Almost overbought on the daily chart and closing to much fanfare at a new record high – in anticipation that the Sino-US phase 1 trade deal will be signed tomorrow.  

 

 

SHORT TERM TRADER: Square.

 

POSITION TAKER:  Square.

BRITISH POUND/US DOLLAR

Some commentators are describing this as a ‘slump’ below 1.3000; patently not the case, just a casual use of hyperbole. This is associated by breathless talk of the Bank of England ‘slashing’ the key interest rate at the end of this month as Marc Carney exits; it currently stands at 0.75 per cent.

 

SHORT TERM TRADER:  Small long at 1.3075; stop below 1.2900. Target 1.3500.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Managing to crawl back above Fibonacci 38 per cent retracement support.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

GOLD

Trying to regain its footing at pivotal support at 1540.  

                            

SHORT TERM TRADER:  New small long at 1544; stop below 1530. Target 1580.

 

POSITION TAKER:  Square.

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.