The U.K.’s deadlocked Parliament failed to agree on a new blueprint for Brexit, rejecting all the options that were put forward to replace Theresa May’s unpopular deal. Last night the House of Commons voted on four different policies but none of them won a majority, pushing Britain’s messy divorce from the European Union deeper into crisis. The pound fell. With just 11 days left until the U.K. is due to exit the bloc of 28 nations, the stalemate leaves the prime minister with a crucial decision over what to do next. Her own deal has been rejected three times in parliamentary votes but she is considering trying again. PM May will convene a meeting of her Cabinet this morning, likely to last five hours, to hash out a plan. If May can’t get her withdrawal agreement through Parliament before a summit of EU leaders on April 10, she will face a perilous set of options. She could seek a long delay to Brexit, which would enrage many euro-skeptics and could provoke resignations; she could call for a general election or even a new referendum and let voters decide; or she could try to force the U.K. out of the EU with no deal, although Parliament would try to stop this.
To mark my 1800th 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@tradernoblecom for details
For anyone following my Platinum Service it made 50 points yesterday on the first trading session of April, having made 1027 points in March, 1013 points in February, 1671 points in January, 2803 points in December, 1541 points in November and 2094 points in October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Walk Out
In a dramatic sign of how high tensions are running, one of the authors of a motion that was rejected resigned from the Conservative Party in the chamber. “I have given everything to an attempt to find a compromise that can take this country out of the European Union while maintaining our economic strength and our political cohesion,” Conservative Nick Boles told the Commons after the results were read out. “I accept I have failed. I have failed chiefly because my party refuses to compromise.” Members of Parliament will have another chance to take over the Brexit agenda on Wednesday. But the path ahead is unclear. Brexit Secretary Steve Barclay indicated the government could bring May’s deal back for another vote this week to try to avoid a long extension of EU membership.
“This House has continuously rejected leaving without a deal just as it has rejected not leaving at all,” Barclay said. “Therefore the only option is to find a way through which allows the U.K. to leave with a deal.” The minister said if Parliament were to back an agreement later this week, it would be possible to avoid European Parliament elections next month, which many pro-Brexit Tories would regard as a betrayal of the 2016 referendum result.
“The House has voted in favor of nothing. As a result in 11 days time, the U.K. will leave the EU without an agreement unless the prime minister acts,” said Labour member of Parliament Hilary Benn.
Members of the U.K. House of Commons voted on four proposals. These are the results:
- Customs union: 273 vs 276
- Single market plus customs union: 261 vs 282
- Referendum on a deal: 280 vs 292
- Emergency brake on no-deal: 191 vs 292
Equities
Stocks strengthened worldwide as strong manufacturing data out of the world’s second largest economy helped allay investor concern about a slowdown in global growth. Yields on Treasuries rose the most since January after as a gauge of U.S. factories topped estimates in March.
The S&P 500 closed at the highest level since October, while the Dow gained the most since Feb. 15. Shares of Lyft dropped below its IPO price as analysts noted there is limited visibility into the company’s path to growth and profitability. The Stoxx Europe 600 climbed on the heels of its best quarter in four years after key China manufacturing PMIs for March beat the highest estimate in Bloomberg surveys of economists. That’s despite manufacturing data for Europe coming in at the lowest since 2013.
In Asia, Chinese shares surged to the highest since May, while Hong Kong stocks entered a bull market. Global equities are building on their strongest quarter since 2010 amid bets that dovish tilts by major central banks will help prop up earnings. The Chinese data went some way toward easing worries about a slowdown prior to the release of American monthly jobs numbers at the end of the week. U.S.-China trade talks will resume when Vice Premier Liu He leads a delegation to Washington later this week, potentially offering more positive developments for investors.
Currencies
The Japanese Yen declined, while the Turkish lira fluctuated as preliminary results from the weekend’s municipal elections showed the popularity of President Recep Tayyip Erdogan is being tested. The Euro was little changed at 1.1212 as the market eyes key long-term support at 1.1175 while the Pound was higher at 1.3125 ahead of the latest Parliamentary vote before falling to close unchanged at 1.3060. Meanwhile the Bloomberg Dollar Spot Index eased less than 0.1 percent, the first drop in five trading sessions.
Bonds
The yield on 10-year Treasuries jumped nine basis points to 2.49 percent, the biggest one-day increase since January, as equity markets made news highs for the year. In Europe, Germany’s 10-year yield climbed four basis points to negative 0.03 percent, and Britain’s 10-year yield rose five basis points to 1.05 percent.
Commodities
West Texas Intermediate rose 1.5 percent to $61.64 a barrel, while Gold fell 0.3 percent to $1,289 an ounce. Meanwhile the Bloomberg Commodity Index rose 0.7 percent, the first increase in four sessions.
This morning on the Economic Front we have UK Markit Construction PMI at 9.30 am and this is followed at 10.00 am by Euro-Zone PPI. At 1.30 pm we have US Durable Goods Orders. Finally at 2.45 pm we have the ISM New York Business Conditions Index.
June S&P 500
The S&P closed at new highs for the year with a 30 Handle rally as market liked the Chinese PMI data coupled with the fact that the market is now building in two rate cuts this year. The S&P has an ‘’Open Gap’’ from October 9th at 2884 which may well be filled before we see a more meaningful correction. Late yesterday the S&P traded higher to my 2869 initial sell-level before having a small move lower. As I did not want to have a short position overnight I covered this position at my revised 2867 T/P level and I am now flat. Yesterday’s move higher has left a large ‘’open Gap’’ from Friday’s close at 2839 to the Chicago low of 2852 and today I will now raise my buy level to 2835/2847 with a 2828 stop. My only interest in selling the S&P is on a further move higher to 2883/2893 with a 2901 stop.
EUR/USD
Finally the Euro traded lower to my 1.1205 buy level. I am still long and I will now lower my T/P level on this position to 1.1215. If my 1.1215 T/P level is not filled I will add to this position on any further move lower to 1.1165 with a lower 1.1135 stop. If my second buy level is filled I will then lower my T/P level to 1.1193. Given how close we are to key support at 1.1175 I still do not want to be short the Euro at this time.
June Dollar Index
No Change as I am still a seller on any rally higher to 97.20/97.60 with the same 97.95 stop.
June DAX
I have had the correct view in not being short the DAX over the past two months but unfortunately the market has not given me the chance to get long and I am still flat. Today I will again raise my buy level slightly to 11520/11590 with a 11475 stop.
June FTSE
I am still flat the FTSE as the market continues to rise on the weaker Pound. However I believe that the Pound is undervalued and that sooner or later Parliament will pass a key vote leading to a big move higher in Cable. On this basis I am reluctant to chase the FTSE higher and I will leave my 7115/7165 buy level unchanged with the same 7075 stop.
Dow Rolling Contract
The Dow finally followed the S&P higher by closing above its February 25, high of 26241. This is bullish as the 26000/26200 area that has capped all rallies over the past six weeks has finally been broken. Today I will move my buy level higher to 26940/26080 with a 26820 stop. My initial objective for the Dow is 26750 ahead of a potential move higher to long-term resistance at 28300/29000. On Friday we saw the IPO of LYFT shares which came to the market at $72 per share. This share is essentially a cab ride that you can book via a phone app. The above IPO price valued the company at 21 times what they lost in 2018. Having surged to a high of $87 after the IPO the stock fell 12% yesterday to close at $69. Going public with no profits shatters the dream that surrounds many of these ‘’hot stocks’’ because now these companies must publicly report each quarter how much money they have made.
June NASDAQ
Thankfully after I posted yesterday morning the NASDAQ was trading higher than my 7478 sell level before the market fell to my 7448 T/P level after the US Markets opened before having a strong rally into the close and I am still flat. Today I will be a small buyer on any dip lower to 7380/7430 with a 7345 tight stop. Given the late rally in the market I no longer want to be short the NASDAQ at this time.
June BUND
The BUND just missed my sell level yesterday before having a 80 point sell-off before the market subsequently reversed some of these losses into the 9.00 pm close. I am still flat and today I will lower my sell level to 166.20/166.60 with a 166.95 stop.
Gold Rolling Contract
No Change as I am still a small buyer on any further dip to 1267/1275 with a 1259 lower stop.
Silver Rolling Contract
Frustrating Silver just missed my 15.30 T/P level and I am still long at 15.20 with the same 14.55 stop. I will now lower my T/P level to 15.25. I will also still look to add to this position at 14.82 and if this price is hit I will then lower my T/P level to 15.07. Again if any of the above levels are hit I will be back with a new update for my Platinum Members.
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