The US Equity markets reopened after been closed for two days due to the devastation caused by Hurricane Sandy. First estimates are that Sandy cost $30 – $50 billion but I reckon it will be nearer $100 billion before we are finished. Trading in New York ended broadly flat after falls in Europe which had been initially stronger on the back of stronger company results, in particular from Metro which is one of Europe’s largest retailers. However the FTSE was hit by a warning from BG Group, a large Oil and Gas
producer. In addition, news emerged that EU Ministers required more savings from Greece and this pushed Europe into a negative close for Equities. Euro-Zone CPI came in as expected at 2.5% while Chicago PMI came in weaker than expected at 49.9.
Today is a very busy one for Economic releases with PMI’s due for the Euro-Zone and the UK. In the US, the ADP Employment data which was due yesterday was delayed until today. These No’s, along with the Weekly Jobless No’s will be closely monitored ahead of Non Farm Payrolls tomorrow. This will the last employment data ahead of the Presidential Election on Tuesday. We also have ISM Manufacturing and Non Farm Productivity.
Dec S&P 500
I did not expect the S&P to sell off as much as it it did after the Chicage PMI No’s were released and I was stopped out of my 1410 long at 1404 and I am now flat. I still believe that once the election is out of the way that the market is going to rally. Even if the market breaks down it is well underpinned between 1356, which is the 200 Moving Average, and the Gap from 1362/1374 which will also support the market. Today I will look to buy the market from 1398/1402 with a 1394 stop. A break and close below 1394 will be bearish and will likely lead to a test of the lows mentioned above. I will be a seller on any rally to 1410/1414 with a stop above yesterdays high at 1418.
Dec BUND
The Bund worked well and I was able to take profit on my 141.70 short at 141.20 and I am now flat. Today I will be a seller from 141.80/142.00 with a 142.25 stop and I will also be a buyer on any dip to 141.10/141.30 with a 140.95 stop.
USD/JPY
The US Dollar has quietly traded higher against the YEN over the last week helped by the fact they are using more QE, having added an extra 11 Trillion Yen to its QE programme at it’s meeting last Tuesday. I still believe the weak Yen will be the story of 2013. I have bought USD/JPY this morning at 79.90 in small and I am going to leave my stop at 79.30 which is below the low made on Monday.
EURO/USD
The Euro dropped down to my 1.2960 Buy level and I was stopped out of this position overnight at 1.2930. I still like the Euro and I have bought the market again this morning at 1.2940. I will leave a 1.2910 stop as I look for the market to trade back to 1.2990/1.3010 where I will look to take profit.
Dec FTSE
The news from BG group stopped me out of my 5815 long at 5780 and I am now flat. I still like the FTSE and I will look to buy the market again if we dip down to the 5730/5750 area with a 5710 stop.
Gold – Rolling Contract
No change from yesterdays comments.
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