US Equities finished softer yesterday despite some early support from the January US Retail Sales data which showed a 0.2% increase versus 0.1% expected, but the Dow was dragged lower by losses at McDonalds, Merck and Coca Cola. European Equities had a better session after Euro-Zone Industrial Production rose 0.7% in December and both Heineken and Peugeot reported better than expected earnings. In currency markets most of majors are little changed with the clear exception being the under-performance of Sterling following the BOE Quarterly Inflation Report. The BOE forecast CPI Inflation at 2.3% at the two year horizon and not falling below 2% until 2016. GDP growth forecasts were nudged slightly lower at around 1% for 2013 and 1.9% for 2014. I don’t believe the troublesome UK Inflation outlook will elicit any tightening response from the BOE. Indeed the Bank effectively signaled that it’s focus remains on rejuvenating the economy. UK Gilt Yields rose 10bps in response to the higher inflation predictions and GBP/USD slumped from 1.5660 to 1.5500.
This morning on the economic front we have German and Euro-Zone GDP which will be closely watched after the better than expected Economic No’s this week. Later in the US we have the Weekly Jobless No’s followed by Bullard from the Fed who is due to speak on the economy in Mississippi.
March S&P 500
Another extremely quiet day but at least the market dropped down to my 1514 buy level with a 1513.25 low. I will leave a 1510 stop on this position and I will look to take profit on any rally to 1520/1523. I still want to go short from 1527/1532 with a 1535 stop. With volatility so low we have to aim for smaller profit targets.
Euro/USD
I was lucky here as shortly after I posted yesterday the Euro traded down to my 1.3460 buy level and I took a nice gain at 1.3500 before the Euro fell 100 points to where we are at 1.3400 this morning. I have bought the Euro here in small at 1.3380 and I will only risk 1.3350 on this position. If I am stopped out I will look to reset my long position in front of 1.3300 with a 1.3270 stop on any subsequent long position. With the G20 meeting due to start in Moscow tomorrow I do not want to be short the Euro.
March FTSE
The FTSE also worked really well as after I posted yesterday we traded down to my 6290 buy level. I went long here and I took a nice gain at 6345 on this position and I am now flat. This morning I will look to reset my long position on any dip to 6300/6325 with a 6285 stop.
GBP/USD (Cable)
Unfortunately I was not as lucky in the Cable and after the BOE released it’s Inflation report I went long at 1.5590 and I was stopped out at 1.5550 literally a few minutes later and I am now flat. Even though Cable is extremely oversold on a daily and weekly basis I am going to stand aside and observe ahead of the G20 Meeting.
March DAX
The Dax just missed my buy level yesterday before having a strong rally. I like the Dax primarily because it has under-performed the other Equity Indices and has a lot of catching up to do. I have bought the Dax this morning at 7710 and I will leave a 7680 stop on this position which is just below the low made earlier today.
March Nasdaq 100 Rolling Contract
No change from yesterday as I still want to short on any rally to 2800/2820 with a 2840 stop.
Recent Comments