Daily Alert – Tuesday 27th September 2022: UK Chancellor keeps markets waiting
The slow-motion car crash that was last Friday’s mini-budget in the UK continues to reverberate around the markets. UK Chancellor of the Exchequer Kwasi Kwarteng is finally going to tell us how everything is going to be OK in a “fiscal plan”, but not until the 23rd of November. It better be more than plugging a GDP number of 2.4 percent into a spreadsheet “to make all the numbers work”. Conjuring growth out of thin air has never been a government speciality.
This clown show looks to me like naive people getting all excited about how radical they are, then presenting it to the grown-ups at which point reality bites and bites hard.
I have been this naive myself, when I was in my 20s, but I wasn’t running the country at the time.
The GBP has stopped falling so precipitously, but the options market is suggesting a 50/50 chance of parity with the USD in the near term. UK yields are soaring. Mortgage products are being withdrawn.
Elsewhere, I have decided to change my bias on equities and oil from “long” to “neutral/short”. My rationale is in the video. In other words, I will continue to observe and may well be tempted short by a good set-up, at which time the bias will become “short”. I have updated the sentiment gauge spreadsheet to reflect this and you can download it from the members area, link below.
There’s not a lot on the calendar today. I am looking at EUR and JPY paired with the USD.
I’ll be back tomorrow.
VIP Club members can see today’s video, all brief trading videos, the Monthly and YTD Performance videos, the Trading Video Course and download the MTM Indicators software HERE