IIFT Daily Note with Peter Brown

No growth in Europe.

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Releases this morning for German and French GDP are very poor. The Euro area is close to returning to recession. The Euro is lower but stock markets are not. This is a result of the cash dynamic we have discussed all year. People are reluctant to sell equity markets because of the excees of cash available in the global market. Yesterday we saw another high in the S&P 1650.

The market is very relaxed about this data. And is hoping for a return to growth in the second half of the year.

We may see a small sell off this morning but not a major reaction to these figures as we would normally expect. The pattern has been for Europe to be negative and the US to bounce.

So we are still on the buy on dips strategy. Worked great yesterday.

Levels today are S&P 1633  1650  Euro 1.2940/50 is now a top 1.2900 support 1.2750 is the target.

Gold may find support at 1400/1410  USD/JPY looks a bit toppish at 102.50

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