Nick Leeson on Brexit, Boeing and the Day Ahead

Nick Leeson on Brexit, Boeing and the Day Ahead

Brexit news provided the impetus for a bumpy ride for the European Indices and Sterling yesterday. A positive stance after news of concessions from the EU was quickly replaced by uncertainty and a swift move lower as legal opinion indicated that we were no nearer a path through the forest to a successful Brexit.

In the US, the DOW has been significantly underperforming the S+P500 beset with problems from Boeing. The effect of the Ethiopian airplane crash at the weekend led to announcements of planes being grounded around the globe.

The question for me is how long will it be until the US aviation authorities follow suit? They appear quite dogmatic and resolute in support of the air worthiness of the 737, Max 8 plane but I think they will follow popular opinion unless there is a quick report from the black box.

Either way I would trade the DOW from the short side.

Asian markets are lower, the Nikki by 250 points currently and the Hang Senv by 168 points.

Shayne Heffernan on the Trading Day Ahead

The Tory government lost a second crucial vote on Tuesday evening when a deal agreed with Brussels on how Britain would part ways with the European Union later this month was defeated. The EU agreed to slightly alter the deal compared to the previous version that was voted down in January, but it was still a far cry from what the British legislator would be willing to accept.

The option of a second referendum on Brexit has been repeatedly rejected by Prime Minister May, who argued that it would undermine democracy in the UK. She also opposed prolonging the current state of uncertainty. But the apparent impasse seems to be leaving no room for maneuver and has boiled down to ‘who blinks first.’

The People’s Bank of China increased its gold reserves for a third straight month in February, bringing total holdings to 1,874 tons, or 60.26 million ounces. The move is part of China’s strategy to shift away from the US dollar.

According to the central bank, it has added about 32 tons of the precious metal to its coffers in the last three months, purchasing some 10 tons in February.

The amount of gold added by global central banks in 2018 hit the second highest annual total on record, according to World Gold Council (WGC) estimates. Countries bought 651.5 metric tons of gold last year, and now hold nearly 34,000 tons. As a safe haven hedge, gold will become more attractive in 2019, due to greater market uncertainties and the expansion of protectionist economic policies, WGC forecasts.

The fallout from the second crash involving Boeing’s newest 737 passenger jet has reached Australian shores after it became the latest country to ground the aircraft.

The Australian civil aviation authority has followed similar moves announced by China, Indonesia, the Cayman Islands, Ethiopia, Mongolia and Morocco earlier this week.

On Tuesday, South Africa, Singapore and Vietnam also announced that they are grounding the troubled aircraft. India’s aviation regulator also tightened norms governing the operation the jet.

The measures come days after Boeing’s latest 737 flying from Ethiopia to Kenya crashed on Sunday, killing 157 people.

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Nick Leeson left school at the age of 18 and started work right in the heart of the City of London with Coutts and Company at 15 Lombard Street. Coutts were bankers to the Royal family as well as a host of other well known and financially successful clients. Shortly after Nick started work in the City, the banking world in the United Kingdom went through its biggest period of change ever with the start of the Big Bang era, a process of de-regulation of Financial Institutions. Awash with opportunity, as the City was in those days, Nick joined Morgan Stanley International, a premier America Investment Bank. Nick started to specialise in Japanese futures and options at this point, a particularly niche area at this time and was headhunted to Baring Securities to fulfil a similar role there. Travelling extensively throughout his time with Barings, notably Indonesia, Japan and Hong Kong, Nick settled in Singapore to activate the Banks seat on the Singapore International Monetary Exchange. His story from the trading floors of Singapore to the collapse is well chronicled but his experiences of that time prove invaluable in developing a day trading strategy that leaves no overnight positions. Nick Leeson's expertise is in looking for entry and exit points around changes in direction, a strategy based on a mixture of sentiment and technical analysis.

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