As widely expected this morning China’s central bank cut its 1-year loan rate by 10 basis points to 4.05 per cent and the 5-year rate by 5 basis points. This is the key rate for lending to the very highest quality borrowers. Later today data for January’s new loans and M2 money supply will be released.
Fears as to the potential international spread of the coronavirus have escalated considerably in South Korea this week, with the pathogen thought to be more contagious than originally estimated. This follows 23 new Covid-19 cases in Daegu, and another 90 showing flu-like symptoms in the nation’s fourth largest city, which were traced to attendance at a church service. Mayor Kwon Young-jin has asked his 2.5 million residents to stay indoors so shopping centres and cinemas are empty, as are the streets which looked like a ‘disaster movie’. The tally of confirmed virus cases in the country now stands at 82.
DAX 30
Not quite but still nearly overbought as EU leaders meet this afternoon – excluding Britain, of course – to thrash out the Commission’s budget for 2021 to 2027 which has a funding gap estimated at €60 billion courtesy of Brexit.
SHORT TERM TRADER: Small short at 13665; stop above 13850. Target 13000.
POSITION TAKER: Square.
FTSE 100
Rebounding further and faster than expected.
SHORT TERM TRADER: Short at 7470; stop above 7550. Target 7230.
POSITION TAKER: Square.
S&P 500
Bullish momentum ticks down a little further as the index struggles to reach the psychological 3400.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Struggling with any strategy attempted. Today, the 20th of the month, the new polymer £20 note comes out, signed by chief cashier Sarah John, the third woman to fill this role.
SHORT TERM TRADER: Stopped out below 1.2900.
POSITION TAKER: Stopped out here too.
EURO/US DOLLAR
A good example of the effects of anchoring as February’s slump is juxtaposed with Q4 2019’s 1.1000 to 1.1200 tiny range.
SHORT TERM TRADER: Square.
POSITION TAKER: Currently considering a short position.
GOLD
Overbought already as we rally back up to the early January high.
SHORT TERM TRADER: Long at 1600; stop below 1580. Target 1650.
POSITION TAKER: Square.
