Trading in Global markets has been thin and subdued with America closed yesterday for the Martin Luther King holiday. European stocks made further gains after some positive noises from the German Bundesbank. The German Central banks latest report said that a recovery was already underway, predicting GDP growth of 0.4% for this year and 1.9% for next year with markets finishing up between 0.3 and 0.6%. Meanwhile overnight the Bank of Japan at its monthly meeting caved in to intense political pressure and agreed to adopt a 2% inflation target in place of the pre-existing 1% inflation goal. The public justification for the 2% target is that the bank recognizes that an inflation rate consistent with price stability on a sustainable basis will rise, as efforts are made by a wide range of entities towards strengthening competitiveness and growth potential of Japans economy. The USD/JPY fell 1 Yen on this news as this was already priced in. This morning we have the ZEW Survey from Germany and in the UK we have the CBI Trends Total Orders. Later in the US we have the Chicago Fed National Activity Index, Existing Home Sales and the Richmond Fed Manufacturing Index. Meanwhile the EU Finance Ministers’ Meeting continues in relation to the latest ESM Funding.
March S&P 500
No change from yesterday as I still look to buy a dip to 1470/1474 with a 1467 stop. I will also look to sell any rally to 1490/1495 with a 1497 stop.
March FTSE
I am still long from 6130. I will raise my stop to 6110 as I look to take profit on any rally to 6170/6200.
March BUND
The Bund dropped down to my 142.90 buy level yesterday and I was able to take a small profit at 143.10 and I am now flat. The Bund is back down to my buy level this morning and I have gone long again here in small at 142.80. I will leave a tight 142.60 stop on this position and if I am stopped out I will be a very aggressive buyer on any dip to 142.00/142.30 with a 141.90 stop.
Euro/USD
The Euro traded up to my 1.3370 sell level overnight. I have gone short in small at this level and I will leave a 1.3415 stop on this position. I will look to take profit in front of 1.3320.
USD/JPY
We have had some profit this morning after the BOJ announcement to increase its inflation target and asset purchases. If USD/JPY continues to fall I will look to buy the market on any dip to 88.10/88.40 with a 87.80 stop.
GBP/USD
Unfortunately I was stopped out of my 1.5880 long position at 1.5835 and I am now flat. I am going to stand aside today and observe before taking my next trade in this currency pair.
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