Earlier this week Britain announced that its economic growth in Q4 2019, as measured by GDP, was zero and +1.1 per cent Y/Y versus up 1.2 per cent annualised in Q3. Not good, but maybe not as bad as feared considering the political background. Today Germany published its data for the period, showing there was no growth what-so-ever in Q4 2019 and that the annualised rate of growth was a mere 0.4 per cent. The Financial Times estimates that this will drag down growth in the Eurozone to its slowest in 7 years.
French car-maker Renault’s results today showed an annual loss of €141 million as the contribution from its tie-up with Japan’s Nissan fell and Chinese joint ventures struggled. This is its first loss in 10 years, it has reduced its operating margin to 3-4% for the coming year, slashed its dividend and warned that demand for cars was volatile. In China vehicles sales fell by an annualised 20 per cent in January and are expected to drop even more in February.
DAX 30
Despite yesterday’s rather tall hanging man/doji style candle, bullish momentum is stronger than it’s been in 3.5 months as prices hover close to the record high at 13800.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
FTSE 100
A potential double top at 7530 as EUR/GBP drops to 83 pence per euro.
SHORT TERM TRADER: Short at 7470; stop above 7550. Target 7230.
POSITION TAKER: Square.
S&P 500
Almost overbought again as the index hugs the upper edge of a badly drawn trend channel. Note that at this week’s term repo offer at the New York Fed bids were oversubscribed by twice what was on offer.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Cabinet reshuffle by PM Johnson and resignation of a Chancellor haven’t turned cable’s momentum bullish - yet.
SHORT TERM TRADER: Long at 1.2970; stop below 1.2900. Target 1.3200.
POSITION TAKER: New long at 1.3040; stop below 1.2900. Target 1.3400.
EURO/US DOLLAR
Very oversold, yet would you want to catch this falling knife? It’s traded down for (almost but not quite) nine consecutive days, so remember the Rule of 8: any markets that moves in one direction only for 8-10 consecutive periods has seen a mature move and is due a correction. More importantly, it’s currently lower than at any point in 2019.
SHORT TERM TRADER: Stopped out for a small loss.
POSITION TAKER: Square.
GOLD
Trying to rally but progress is slow.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
