29th May 2019
The UK has tumbled out of the world’s top 20 most competitive economies as Iceland, New Zealand and Malaysia all overtook Britain. Slowing economic growth, political instability, weak investment and an increasingly interventionist Government all dragged the country down the league table. It leaves Britain falling towards the middle of the table, which comprises 63 countries.
The 23rd place is Britain’s worst in the report’s 21-year history, though accounting for the rise in the number of countries taking part makes this the worst performance since the financial crisis.
Meanwhile, the FTSE 100 bulls failed to hold above the 7300 level yesterday, and we have dropped off further overnight, as the bond market in the US once again flashes some warning signs as sovereign yields have slumped again.
Trade Angst
Equity futures in Asia are trending lower broadly after trade angst reversed early gains in the U.S. to send U.S. stocks fell to a two-month low and pushed the Treasury yield curve deeper into inversion. The gap between 3-month and 10-year rates reached the widest since March, historically a signal that a recession is looming. “People are fighting to find yield,” Seaport Global Holdings’ managing director Tom di Galoma said. In the U.S., a growing chorus of companies is warning that Trump’s trade tariffs hurt more than they help.
China Avoids Currency Manipulator Label
The U.S. again refrained from labeling China a currency manipulator when the Treasury Department issued its semi-annual foreign-exchange report to Congress on Tuesday. That decision leaves one of President Donald Trump’s campaign promises unfulfilled but avoids further escalation in the U.S.-China trade war. Meanwhile, former White House strategist Steve Bannon is urging Trump to “go all the way” and intensify his trade battle with China by barring Chinese businesses from U.S. capital markets and technology. Bannon made the comments in the central Asian state of Kazakhstan, where he was attending a media forum.
FTSE 100 Trading Signals, Forecast and Prediction
For today I am looking at the 7210 area as support and think that if we drop down to that we may see a bit of a bounce. Below this then the daily chart has support at 7160 and then the bottom of the Raff channels at 7100. The bulls failure to break above the 7300 level yesterday doesn’t bode too well in the short term, and as such the 2 hour chart has now gone bearish again. Resistance is showing that 7262 on that, and of course we still have the 7300 level above that. Should the bulls appear though and press on the 7373 level is still showing as long term resistance.
The daily RSI is down at 42, coupled with the fear/greed sat at 25/100 (extreme fear) though with the trade spats, sovereign bond yields dropping to multi year lows and the chase for yield not catching much, we are still seeing a lot of nervousness around. That said, the FTSE hasn’t broken below its recent low of 7210 as yet, but if it were to do so, then 7160 and 7140 look possible. The latter was the level it bounced from on 14th May.
The ASX200 had a dip and rise session today, and didn’t sell off too hard, and I am inclined to think that we may see similar today, especially if 7210 gets tested – I am expecting that to hold at least the initial test.
The picture however does look weak but there are some decent levels to watch – 7210, 7160 for support. 7260, 7300, 7373 for resistance though I wouldn’t expect that latter level to be tested today.
Looking ahead to news items, highlights include French GDP, German Unemployment, BoC Rate Decision, ECB’s Weidmann, Mersch, Rehn & Visco, supply from Germany and the US. We also have the US GDP tomorrow which traders will be watching for.
Recommended Broker
IC Markets – offers market leading pricing and trading conditions by providing clients with True ECN Connectivity; this allows you to trade on institutional grade liquidity from the world’s leading investment banks, hedge funds and dark pool liquidity execution venues. Highly recommended!
Membership
If you would like more detailed analysis for FTSE 100, DAX, Gold and S&P, including the trades that I am looking to take myself, then please join my active members community.
What you get
- Daily Analysis pre market open (sent around 7am each day) for FTSE, DAX, Gold and S&P.
- Daily email pre market includes my trading plan for the day including ORDER levels, with stops and targets/limits
- Telegram live trading room and webinar group membership for discussion and realtime trade updates