9th April 2019
German exports have suffered their biggest slump in a year in the latest sign that its ailing manufacturing sector is struggling to cope with mounting geopolitical uncertainty and slowing global demand. Exports slid 1.3pc month-on-month in February, well below economists’ expectations, while imports tumbled 1.6pc, the biggest contraction in six months. German factories have blamed worries over Brexit, car industry woes, China’s deceleration and the trade war for their sharp slowdown in recent months.
Last week German factory orders posted their biggest plunge in a decade, suffering a shock 8.4pc year-on-year drop, while industrial production has slipped for four consecutive months.
Wall Street started the new week on the back foot, ending the longest rally in US stocks since 2017. Boeing shares are weighing heavily on the Dow Jones, knocking New York’s blue-chip index back to a 0.5pc loss. Almost every major rich-world economy is slowing down in a fresh sign that the risk of a global recession is rising. The United States, Japan, the eurozone, UK, Canada and Russia are all losing momentum, according to leading indicators compiled by the OECD that seek to predict the path of growth over the next six to nine months. Its composite leading indicator points to the worst economic outlook since 2009, when the world faced the depths of the financial crisis.
Oil gushed back up past $70 a barrel to its highest level this year on Monday as fresh fighting in Libya reignited fears of civil war in the north African nation. Brent crude hit $70.80 a barrel on Monday morning as Libya’s eastern military leader, General Khalifa Haftar, ordered his forces to march into Tripoli.
US Markets
Asian stocks have edged higher at the open after U.S.shares clocked an eighth day of gains to trade within 1.2 percent of their September record. The S&P 500 rose 0.1 percent and the Nasdaq Composite added 0.2 percent. Bucking the trend, the Dow lost the most in two weeks. Shares of General Electric Co. plunged the most in the S&P 500 after a JPMorgan analyst recommended selling the company’s stock, damping enthusiasm for a nascent turnaround. The Stoxx Europe 600 fell 0.2 percent as German equities retreated for the first time in eight sessions amid losses in BMW AG, which fell after saying it’s likely to take a charge exceeding 1 billion euros ($1.1 billion).
No to No-Deal Brexit
The European Union is zeroing in on its offer to the U.K. on the length of a Brexit delay. After several days of talks between diplomats of the EU’s 27 remaining governments, a compromise between France, which is very skeptical about extending Britain’s membership beyond April 12, and governments that think the U.K. should be given an extra year is beginning to emerge, four officials familiar with the matter said. It is now likely that the offer to the U.K. on its Brexit delay will fall somewhere between June 30, 2019, and April 1, 2020, they said. This comes as Theresa May is set to hold “technical talks” with the opposition Labour Party in an attempt to find a new Brexit compromise.
FTSE 100 Trading Signals, Forecast and Prediction
That was a bit of a flat one yesterday and I think the FTSE 100 is in a holding pattern, waiting to see what is next in the Brexit saga. For today, we still have resistance at the 7460 level, though we now also have a 30min coral resistance going red at 7451. Coupled with the daily RSI still hovering around the 71 level, we may well see a bit of a pullback soon. If we do drop off a bit from this area then I am looking at a dip down to the 7412 area where we have the 200ema on the 30min chart. The 2 hour chart is also bearish still with 7460 resistance, so the bulls will be keen to break this area, and it is also the recent high. If they do move above this then I am looking at the 7483 to 7490 area as resistance, with the 7568 level above this. I think we may top out today at 7483 if seen.
On the support side, then we have S1 at 7423, but then also the 200ema as mentioned at 7412. The bulls will be keen to defend this area and keep the price above the 7400 level, as there is still the likelihood that we push up above 7500 soon.
If the bears were to break 7412 then I am thinking that we will get a drop down to the 7367 level, and would expect to see a bit of a bounce here. Below this then 7340 is next up with 7310 below that and a level that the bulls will definitely need to defend hard. If not then the bull run for 2019 starts to look a bit dicey.
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