Equity markets ended the week mostly higher. US Payrolls rose 146k in November easily exceeding the 85k consensus expectation as the US Labor Dept said Hurricane Sandy did not substantially impact the data. The Unemployment Rate fell to 7.7% – the lowest level since December 2008 – helped by a fall in the participation rate from 63.8% to 63.6%. The markets would have finished higher but were not helped by the US Consumer Confidence No’s which fell to 74.5 in December from 82.7 the previous month. European markets were weighed down by a big fall in German Industrial Production whilst the Bundesbank slashed its 2013 German GDP forecast to 0.4% from 1.4% in June. Over the weekend Chinese data showed further signs of recovery with better than expected outcomes for Industrial Production and Retail Sales. The Euro and European Equity markets are lower this morning on the unexpected resignation of Italian Prime Minister, Mario Monti, and it will be interesting to see how Italian Bond Yields react to this news with elections now likely to occur in February.
Today is very quiet on the economic front with German Current Account and French Industrial Production due this morning. The main event this week is the last FOMC meeting for the year on Wednesday and is expected to introduce another Asset Purchase scheme as it’s Operation Twist rolls off.
Dec S&P 500
The S&P rallied after the better than expected Payroll No’s and just missed my 1424 sell level. This morning the market is lower on the Monti news and I will be a small buyer if we dip further to 1407/1410 with a 1404 stop. As we have the FOMC meeting on Wednesday I would expect the market to rally ahead of this meeting. December is the seasonally strong time of the year and this why I am loathe to go short. I will leave my sell level the same at 1424/1428 with a 1431 stop.
Nasdaq 100 Rolling Contract
The Nasdaq has hit my buy zone this morning and I am now long at 2627. I will leave my stop the same at 2605 and I will look to take profit on any rally back to the 2650/2660 resistance zone.
Dec FTSE
The FTSE also hit my sell level on Friday and I am short at 5625. The FTSE is still very overbought on a daily basis and the Williams Index has started to turn down. I am going to give the FTSE a chance to break down and I will leave a 5640 stop on this position as I look for the market to test the 5860 support level where I will look to cover my short.
Euro/USD
Late Friday the Euro rallied and just missed my 1.2960 sell level. The 1.2875 is major support and a break of this level will be very bearish and there is a risk that a break of this support could lead to a move to 1.2630. This morning I am a small buyer from 1.2870/1.2890 with a 1.2850 stop and I will also be a seller on any rally to 1.2960/1.2990 with a 1.3010 stop.
Gold Rolling Contract
Gold just missed my 1680 buy level on Friday before trading back above 1700. Today I will raise my buy level to 1675/1685 with a 1668 stop.
March Bund
The Bund has had a nice rally since the Contract rolled from December to March and I will be a seller on any further rally to 146.40/146.60 with a 146.80 stop.
Recent Comments