Yesterday was a relatively settled risk on day with Equities ending the day higher, helped by the US House voting to suspend the Debt Ceiling until May 19th and the IMF only marginally cutting its Global forecasts. In their latest World Economic Outlook forecast update, the IMF has shaved its forecast from last October of 3.6% for the Global Economy this year to now expect 3.5%.They are less worried about some of the financial risks that could tip the Euro-Zone right over but are still worried about economic stagnation in Europe where they expect another year of contraction. Chief Economist, Blanchard though did say that financial market optimism had gotten ahead of the real economy but he is not sure by how much. Meanwhile the economic data released yesterday was inconsequential. France released a softer than expected business survey for January, the BOE Minutes showed a 8-1 vote to leave their QE unchanged whilst UK Unemployment figures were not as bad as in November. After the close last night Apple released their earnings and it showed their weakest sales in 14 Quarters and this is weighing on the markets this morning.
This morning we have PMI Services and PMI Manufacturing released for both Germany and the Euro-Zone. In the UK we have CBI Reported Sales, followed at 1.30 in the US by the Weekly Jobless Nos, Leading Indicators and the Kansas City Fed Manufacturing Activity.
March S&P 500
The S&P is taking the poor results from Apple reasonably well this morning. The market traded in a very narrow range yesterday and did not hit any of my levels. I still believe we will test the 1500 level before we run into trouble and today I am a small buyer from 1480/1484 with a 1478 stop. I will still look to sell the market on any rally to 1497/1502 with a 1505 stop.
Euro/USD
The Euro worked really well shortly after I posted yesterday morning we traded up to my 1.3350 sell level before the market collapsed. I took profit at 1.3290 on my 1.3350 short position and I am now flat. The Euro is stuck in this 1.3260/1.3400 range. This morning I am a seller on any rally to 1.3360/1.3390 with a 1.3410 stop and I will also look to buy the market on any dip to 1.3270/1.3290 with a 1.3240 stop.
March BUND
Finally a decent profit in the Bund as the market traded down to 143.08 after I posted yesterday. I went long at 143.20 and I took a nice gain this morning at 143.90 and I am now flat. Today I still like the Bund and I am a buyer on any dip to 143.50/143.75 with a 143.35 stop.
March FTSE
No change from yesterday as I am still a buyer from 6120/6135 with a 6105 stop. I will also like to sell on any rally to 6180/6205 with a 6220 stop.
March DAX
The Dax continues to trade heavy and under perform the other major Equity markets this year. It should be well supported at the 7620/7640 area and I will be a buyer here with a 7595 stop. If it rallies from here I will be a small seller from 7730/7750 with a 7770 stop.
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