With the US chowing down for the Thanksgiving Day holiday, it could have been a very quiet session but this was not the case with Brexit news prominent. It was the release of a Brexit Declaration setting out the future relationship between the UK and the EC. Supposedly, this was THE document that would form the basis with a Withdrawal Agreement to provide trade and political clarity of a deal that it would get the requisite political support. Not yet. As observers looked at this 26 page statement of intent document it still raised as many questions as answers, with grave doubts that it would get support in the Commons. It did not seem to be a document that was going to get the support of the Tory Brexiteers nor the pro-Europe Tories.
To mark my 1720th issue of TraderNoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day To demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 30 points yesterday and is now ahead by 1336 points for November, having made 2094 points in October,1276 points in September, 599 points in August, 1074 points in July, 994 points in June, 1927 points in May, 1657 points in April, 1760 points in March and 2256 points in February. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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The UK and EU have agreed in principle a draft that pledges an ‘’ambitious, broad, deep and flexible partnership’’ but without the specific detail observers were seeking. Unlike last week’s Withdrawal Agreement which is legally binding, this political declaration ‘’ an executive summary version of the dense legal 500+ page agreement’’ is not. Bloomberg reported that the draft provides a few concessions, pointing the way towards easy trade in goods hinting vaguely that the UK will be able to pursue its own trade policy and also stop free movement of people and offers a way out of the Irish backstop though one apparently that could well be scotched by the DUP.
Currencies
Prime Minister May has been trying to sell the deal to Parliament but is meeting a lot of resistance, this document not convincing the market that it will get through Parliament, with disapproval of the agreement within May’s own Conservative party and the opposing Labour party unlikely to support the deal either.After EU leaders are expected to rubber stamp this political declaration alongside the Withdrawal Agreement EU at a summit on Sunday, the ‘’meaningful vote’’ in the UK Parliament is likely in the second week in December. It would be far too optimistic to declare victory on a deal yet.
The stronger GBP (up a net 0.7% to 1.2870 this morning) spilled over modestly into EUR support, which is back up through 1.14.
There has also been some positive news on the US-China relationship front over the past 24 hours, but it has failed (at least for now) to spill over into concerted support for the AUD and NZD, possibly reflecting a steady CNY/CNH.
The South China Morning Post reported that Trump’s trade policy advisor, the anti-China firebrand Peter Navarro (author of ‘’Death by China’’ before joining the White House) would not be attending the Xi-Trump meeting at the G20 summit in Argentina the end of the month. The report added optimism that US-China trade talks can make some progress (a ceasefire even?), with a possible halt to further import tariffs for as long as negotiations continue. As a show of goodwill, the Chinese government allowed US warships to anchor in Hong Kong after barring them back in September.
Economics
In economic news, and ahead of important German and Euro Zone PMIs for November this morning, Euro-area Consumer Confidence fell markedly to minus 3.9, the lowest since March 2017. The ECB also released the account of its 24-25 meeting noting ‘’uncertainties and fragilities’’ affecting the economy, but nevertheless agreeing that they were nor enough to weaken confidence that the Euro-Zone’s domestic strength will prevail. In their words: It needed to be emphasized that the incoming data, while somewhat weaker than expected, remained overall consistent with an ongoing broad-based expansion.
Central bank governors and ECB Governing Council members Weidmann (GE), Knot (NE), and Visco (IT) were speaking on a panel in Florence. No prizes for guessing their views on Euro monetary policy and they did not disappoint. Weidmann spoke that central bank bond buying was not to finance government (pushing back against any more QE) and the costs of high inflation (pushing back against retaining negative interest rates). Knot spoke of Italy’s problems while Visco also had a thinly-veiled warning for the Italian government noting the pressures on public debt as long as the interest rate is greater than growth, which it currently is and that Euro governments need to contribute to stability.
Speaking of Italy, there have been conflicting news reports on Italy’s budget standoff against the European Commission. One paper reported that Deputy Premier Di Maio saw ‘’modifications’’ to the budget possible during the Parliamentary process. Another newspaper reported that Di Maio alongside Salvini would not shift on the budget, ‘’We are not changing a comma of the budget, we are going ahead without concessions, if we yield now on the budget the whole structure of our government collapses’’.
Bonds, Commodities and Equities
There was only the slightest of bid tones to European bond markets, coming from declining European stock markets, the Eurostoxx 600 index down 0.7% and the FTSE off 1.28%. German Bund yields barely budged (down in yield by less than a basis point), Italian yields down 1.7bps. UK 10 year Gilts rose 3.2 bps. Base metals were little changed, while oil eased further, WTI and Brent both down 1.4%, WTI to $53.85 and Brent to $62.60, both re-testing cycle lows.
This morning on the Economic Front we have German and Euro-Zone Manufacturing PMI at 8.30 am and 9.00 am respectively. At 12.00 pm ECB Vice-President Luis de Guindos speaks in Madrid. Next we have Canadian Retail Sales and CPI at 1.30 pm. Finally at 2.45 pm we have US Manufacturing PMI
December S&P 500
With the US Markets closed yesterday for the Thanksgiving Holiday and only open for a half-day’s trading with the Futures Market closing at 6.15 pm London time this evening, liquidity will be a problem today given the lack of traders at their desks. This could lead to a volatile few hours trading. I am still flat the S&P and I will continue to be a buyer on any dip lower to 2605/2618 with the same 2596 stop. I will still be an aggressive buyer on any plunge lower to 2560/2585 with a 2545 wider stop. My only interest in selling the market is still on a rally higher to 2678/2692 with a 2702 stop. There is no doubt we are getting near at least a tradeable bottom with the Daily Sentiment Index closing at just 8% bulls last Monday and Tuesday.
EUR/USD
I am still flat the Euro and today I will leave my 1.1310/1.1350 buy range unchanged with the same 1.1265 stop.
December Dollar Index
I am still flat the Dollar and today I will be a small seller on any further rally to 96.75/97.15 with a 97.45 stop.
December DAX
The DAX just missed my buy level yesterday before rallying and I am still flat. So far the key 11000 key support level is holding the market. Today I will continue to be a buyer on any dip lower to 10980/11040 with a 10925 stop. I still do not want to be short the DAX at this time.
December FTSE
My FTSE plan worked well yesterday with the market trading lower to my 6965 buy level before rallying to my 6995 T/P level and I am now flat. The FTSE closed on its lows yesterday not helped by the worsening political situation. Given how oversold the FTSE is trading I would not chase this market lower and today I will be a buyer on any dip to 6870/6915 with a 6830 stop.
Dow Rolling Contract
No change as I am still an aggressive buyer on any move lower to 23900/24100 with the same 23750 wider stop. My only interest in selling this market is still on a rally higher to 24750/24950 with a 25120 stop.
December NASDAQ
No change as I am still a strong buyer on any dip lower to 6400/6470 with a 6345 stop.
December BUND
There is nothing going on in this market which has traded sideways for most of 2018. I am still flat and my only interest in selling this market is still on a rally higher to 161.05.161.45 with a 161.75 stop.
Gold Rolling Contract
Gold is finding it hard to break and close above 1230. I am still flat and as I am back long Silver I will now lower my Gold buy level to 1200/1210 with a 1192 stop.
Silver Rolling Contract
Surprisingly Silver fell 1.3% overnight with the market trading lower to my 14.30 buy level. I will leave my stop unchanged on this position at 13.75 with a now lower T/P level of 14.50. If any of the above levels are hit I will be back with a new update for my Platinum Members.
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