Mario Draghi signalled that the European Central Bank expects to rely on long-term bank loans and tweaks to its negative interest-rate policy as a first defense if officials need to intensify their fight against the economic slowdown. The comments came as the ECB president warned that Euro-area growth has cooled further this year and could yet worsen. In a sign that hopes of a second-half rebound are fading, he said the weakness “will extend into the rest of the year.” The long-term loan plan — the third of its kind in the multi-year fight to reignite inflation — was announced five weeks ago and will start in September, but the central bank has yet to decide on the terms. Draghi said officials will also analise the side effects of negative interest rates to judge if they’re hurting the profitability of banks so much that they curb lending to companies and households. While Draghi said the ECB is ready to use all its instruments if needed, the flagship policies of the past look unlikely to figure for now. The Governing Council hasn’t discussed cutting rates again — the deposit rate was held at minus 0.4 percent — and there was no suggestion of restarting bond purchases. The ECB chief said it’s still “too early” to decide on negative rates or on the criteria for bank loans, and any decision would be taken at a “forthcoming meeting.” That suggests the next policy session in June, when the central bank will have new economic forecasts, could be the moment to act. The latest assessment of the economy in Draghi’s statement was gloomy, driven by global risks including Donald Trump’s trade threats, Italy’s precarious fiscal situation and uncertainty over when and how the U.K. will leave the European Union. Overnight it was announced that the UK will now leave the EU on October 31 after agreeing a further ‘’flexible solution’’. A day earlier, the IMF cut its forecasts for both the global and euro-area economies.
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 62 points yesterday and is now ahead by 352 points for 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
I have a YouTube Channel which contains recent interviews I have given. This can be viewed by clicking HERE Please subscribe to this for new interview notification
The S&P 500 rebounded from its first loss in nine days as unexpectedly soft inflation reading potentially boosted the Fed’s new wait-and-see approach to rate hikes. The bank’s March minutes showed that a majority of committee members saw risks warranting rates on hold through 2019. Tech shares paced the advance, boosting the Nasdaq indexes. Boeing continued its slide in the wake of the 737 Max fallout, helping to hold down the Dow Jones Industrial Average. The weaker-than-expected inflation data has heightened the focus on Fed policy, as investors try to figure out what it will take to budge the central bank out of its steady approach. The central bank’s minutes offered few clues. Elsewhere, Israeli stocks climbed as Benjamin Netanyahu looks set for a fifth term as prime minister after a bruising election campaign. The S&P 500 Index gained 0.4 percent to close at 2,888.21 while the Dow Jones Industrial Average was little changed.
The Nasdaq Composite Index rose 0.7 percent, while the Nasdaq 100 added 0.6 percent as both new highs for the year to date. Meanwhile in Europe the Stoxx Europe 600 Index rose 0.3 percent.
The US Dollar slid against the Euro after European Central Bank President Mario Draghi reiterated warnings that global risks continue to batter the region’s economy as the ECB signaled no rate hikes for the rest of 2019. The Pound advanced as the European Union leaders met in Brussels to hash out the terms of a Brexit delay which as we now know will be on October 31, 2019. This morning the Pound is unchanged at 1.3095 while the Euro closed 0.1% higher at 1.1273 where it sits this morning. Meanwhile the Japanese yen gained 0.2 percent to 110.95 per dollar.
Federal Reserve policy makers last month grappled with “significant uncertainties” and persistently low inflation as they scrapped forecasts for interest-rate hikes in 2019 even while voicing the need to maintain policy flexibility. The minutes show U.S. central bankers reacting to a fourth- quarter slowdown that appeared to be extending into the first three months of the year. They also cited several uncertainties, ranging from Brexit deliberations, to risks of persistent softness in domestic spending and deeper-than-expected slowdowns in Europe and China.
The Fed’s median estimate last month showed no hikes for the remainder of 2019, erasing their forecast from December for two increases this year. Central bankers left the target policy rate unchanged in a range of 2.25 percent to 2.5 percent. The net result was the yield on 10-year Treasuries fell three basis points to 2.47 percent. In Europe Germany’s 10-year yield fell two basis points to -0.03 percent after a dovish ECB and Britain’s 10-year yield dropped less than one basis point to 1.119 percent.
West Texas Intermediate crude increased 0.8 percent to $64.46 a barrel. Gold rose 0.3 percent $1,312.30 an ounce with both Gold and Oil opening lower in Europe this morning.
This morning on the Economic Front we already had the release of German PPI which came in as expected with a +0.4% print. At 1.30 pm we have US CPI and the Weekly Jobless Claims. Finally the Fed’s Clarida, Bullard and Bowman are speaking later today at 2.30 pm, 2.40 pm and 9.00 pm respectively.
June S&P 500
It took a while but finally overnight the S&P traded higher to m y 2899 sell level before selling off to my revised 2895 T/P level and I am now flat. Usually both the S&P and Dow move together but over the past two weeks these markets have gone in opposite direction due mainly to the understandable weakness in Boeing Shares. The S&P has just registered back-to-back days with a Daily Sentiment Index reading of 91% which is a worry for higher prices from here. With the S&P now trading over 570 Handles off its December 26 low of 2326 there is every reason to expect a correction. However with the Central Banks intent on doing everything in their power to prevent any major sell-off it is difficult to be short for any length of time. Today I will be a seller on any further rally to 2908/2918 with a 2926 stop. If I am taken short and subsequently stopped out of this position I will be a more aggressive seller from 2932/2945 with a higher 2654 stop. I will still be a small buyer on any dip lower to 2865/2873 with a 2858 stop.
Frustratingly the Euro just missed my 1.1210 buy level with a 1.1229 low print during the Dragi press conference before the Euro reversed to close at 1.1273 and I am still flat. Today I will raise my buy level to 1.1195/1.1235 with a 1.1155 higher stop. Remember a break and close below the 1.1175 key support is bearish for much lower prices.
June Dollar Index
No Change as I am still a seller on any rally higher to 97.10/97.50 with the same 97.85 stop.
I am still flat the DAX which continues to trade sideways/lower after the big move up over the past four weeks. As mentioned earlier in the week the DAX needs to break and close over the key resistance level at 12250/12400 for the market to test its all-time high at 13400. Today I will raise my buy level slightly to 11780/11840 with a 11725 stop.
With the EU giving Britain a shorter extension than expected to October 31 as Macron and the French Government resisted a longer time frame both Sterling and the FTSE are opening unchanged. I still believe the only way around this is to have a second referendum or else the impasse in Parliament will continue. Today I will leave my 7398/7448 sell level unchanged with the same 7475 stop.
Dow Rolling Contract
Frustratingly the Dow missed my 26070 buy level with a 26095 low print before rallying back above 26200 overnight and I am still flat. Today I will be a small seller from 26250/26350 with a tight 26425 stop. I will now lower my buy level to 25830/25980 with a 25740 wider stop.
With the NASDAQ rising 0.7% yesterday the market hit my 7630 sell level. Immediately I emailed my Platinum Members to exit any short position at 7618 and to go short again on any rally higher to 7650 which was filled overnight. As I want to continue to bank points when available especially on a slow month like we are having now, I covered this position at 7640 and I am now flat. With the DSI at such extreme levels and Apple shares looking tired at $200 having risen over $60 in the last two months I will again look to sell the market from 7680/7730 with a 7765 tight stop.
The Bund traded to a high of 166.00 on Dragi just missing my 166.05 sell level before trading lower and I am still flat. Today I will raise my sell level slightly to 166.15/166.55 with the same 166.75 stop.
Gold Rolling Contract
I am still flat the Gold market, surprised that it has rallied $30 over the past week. I do not have an edge in this market at the moment and I am going to stand aside preferring to concentrate on Silver.
Silver Rolling Contract
I am still flat Silver which again missed my 15.10 buy level with a 15.14 low print. Today I will leave my 14.80/15.10 buy range unchanged with the same 14.60 stop and 15.25 T/P level if executed.