Daily Alert: For Friday 26th February 2016

Mark Nugent2016 H1, Daily Alert, February 2016


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Fundamentals and Sentiment – New Information (Economic Calendar)

We remain risk-on today, Thursday, despite huge losses in Chinese stocks.

Thursday – UK GDP comes in on target at 0.5% for Q4 2015 over Q3. US Core Durable Goods outperformed expectations significantly coming in at 1.8% vs target of 0.2%.

Fundamentals and Sentiment – Market Reaction

The Vix is around 21. Oil and other commodities remain within their consolidation zones at multi-year lows. Stock markets in China are down significantly. In stark contrast to January and early February the global financial markets barely notice! All the European stock markets and the S&P500 as well as the Nikkei are up. The JPY index shows weakness today, CAD is strong and there is little movement with AUD and NZD.

Fundamentals and Sentiment – Financial Media

Again, the media are broadly free of economic apocalypse stories.

  1. EURUSD short is slightly up on the day but still in the money. EURAUD may be an interesting short if we move significantly into risk-on (Vix well below 20).
  2. GBP weakness – my FTSE100 trade is taken out at breakeven. I will re-enter short at the same price.
  3. USDJPY rises on JPY weakness. I will enter long at the resistance zone around 113.29.

US Preliminary GDP will be the focus.

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