20th September 2019
Sterling leapt after the close of London trading, as Jean-Claude Juncker said he believed a Brexit deal could be reached by Oct 31. Sky News trailed an interview with the outgoing European Commission president, in which he said a no-deal Brexit would be “catastrophic”.
“I’m doing everything to have a deal, because I don’t like the idea of no deal,” Mr Juncker said. He refused to comment on whether he thought the chance of reaching a deal was above or below 50pc.
The pound jumped to a two-month record against the dollar following Mr Juncker’s comments, reaching its highest level since July 19 – shortly before Boris Johnson became Prime Minister. The currency has mounted a steady comeback over the past two weeks as Mr Johnson suffered a series of defeats over no deal in Parliament. It had reached a 34-year low at the start of September following six months of declines. Mr Juncker’s comments presented a dramatic end to a London trading session marked by solid gains.
The damage inflicted upon the FTSE 100 during the aftermath of drone attacks on two Saudi oil facilities was mostly patched during trading on Thursday. The blue-chip index advanced 42.37 points – or 0.58pc – to close at 7,356.42, as the Bank of England continued to hint it may take a dovish turn on rates.
Back at the Table
China and the U.S. are talking trade again. Negotiators have resumed face-to-face discussions in Washington, while the Trump administration says a Chinese delegation will visit American farmlands next week. The talks are expected to lay the ground-work for top-level negotiations between U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Vice Premier Liu He in October. The past two months have seen a ratcheting up of the trade war, after the last set of talks in late July. Since then, China’s trade performance is showing signs of a bad situation becoming worse, U.S. growth has decelerated and the OECD has forecast the slowest global expansion in a decade.
Market Open
Asian stocks saw modest gains on reduced volumes after a lackluster session for U.S. shares. The dollar sank and Treasuries rose amid a slew of fresh monetary-policy decisions. After getting a boost from positive comments on trade by White House economic adviser Larry Kudlow early in the day, equities took a leg down after a report about a U.S. official threatening steeper tariffs against China. In China, all eyes will be on the Loan Prime Rate — a new gauge of borrowing costs. In India, central bank chief Shaktikanta Das said there’s room for interest-rate cuts.
FTSE 100 Trading Signals, Forecast and Prediction
It’s quadruple witching today and this is when the quarterly expiration of futures and options on indexes and stocks occurs on the same day, surging volatility and trading can follow. This will be at 10:10 this morning so watch out for this.
The S&P dropped off again from the 3020 level but has held above the 3000 round number for the moment. With the 200ema at 3002 the bulls will be keen to defend this level for a push higher.
On the FTSE for today, the bears appeared just above the 7370 daily resistance level after the bulls had brought it steadily up during the day. The Brexit comments were their downfall as the pound rose which brought it back down. Now the bulls need to get it above 7373 to target the 7400 level, however there is a hurdle at 7386 in the way now. We have the key fib for today there, along with daily resistance so I am thinking that we may well see a stutter here. If the bulls were to push above this then the 7401 cam break out level is next, which then opens up 7444 after that.
For the bears, if 7290 breaks (there was a false break yesterday to suck in the bears before that rise stopped most of them out) then we have the bottom of the Raff channels at 7250 so may well see this area hold. The ASX200 had a rise and dip day (as per our pattern yesterday) so we may well see a repeat of that today.
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