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Hi Casey, I'm not referring to the ESMA-related margin increases. This is actually funding costs I'm talking about.

 

Changes to overnight funding rates

From 4 February, we’re changing the way we calculate overnight funding on shares and indices. Whereas the interest rate used to be based on the currency of the trade, it will now be based on the currency of the underlying instrument.

This could affect you positively or negatively – see below for reference.

Example: Wall Street

If you trade on Wall Street in GBP, you’d previously pay overnight funding based on the GBP interest rate. From 4 February, you’ll pay funding based on the USD rate instead.

So if you bought £2 per point at 24,000, giving you a notional value of £48,000, this is how your funding charges would change:
 

  Interbank rate1 IG rate2 Daily cost
GBP 0.73% 3.23% £4.31
USD 2.52% 5.02% £6.69
Difference: £-2.38


If you sold £2 per point at 24,000, giving you a notional value of £48,000, this is how your funding charges would change:
 

  Interbank rate1 IG rate2 Daily cost
GBP 0.73% 1.77% £2.36
USD 2.52% -0.02% -£0.03
Difference: £2.39




1 ‘Rate’ refers to the 1-month interbank funding rate (eg LIBOR for the UK). Rates correct as of 14 January 2019.

2 ‘IG rate’ refers our total funding charge, which is 2.5% on top of the interbank rate. We debit your account for a long position, and credit your account for a short position (if the interbank funding rate is greater than 2.5%, or greater than 3% on mini/micro CFD contracts). Find out more here.

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4 Hour charts and looking for Dow continuation of the uptrend with a test of the H4 resistance 25156 and then on to the daily chart resistance 25439. Ftse in a similar situation, UK GDP and manu prod data at 9:30.

Dax and Nikkei with similar looking charts, Dax suffering a stream of poor data releases last week while Nikkei pulled into the Asian slump. Japan public holiday today. 

Not much on the Euro calendar this week, if Dow can make progress will be looking for Dax to follow.

image.thumb.png.ccc443de3925c3ad78281a4d7ef39e88.png

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Dow stalled yesterday after initially pushing up though 25156 from yesterday's post. Nikkei had a strong push up overnight and Dax has worked it's way into clear space while Ftse has moved up to resistance.

Today will be looking again for Dow to push up through H4 resistance currently at 25244 and for Dax and Ftse to follow.

As ever though, a failure at resistance usually initiates a test of support.

H1 charts;

image.thumb.png.3b48624c5e0fac6d9b88a19777844f03.png

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IG 'Trade of the Week' Dow moves up through the daily chart resistance level  25439 mentioned in Monday's post, may see a retest of that today. The others following on with Ftse back up through the weekly resistance level for a second attempt on 7188. Dax making hard work of it and still has a lot of ground to make up to reach resistance at 11387. Nikkei finally breaks up through 20967.

Daily charts;

image.thumb.png.b55aa3ed6969ad86b504642b07e2cb60.png

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Dow after a second retest of support at 25439 now looking for resistance, the most recent level to test is at 25626. The other indices look poised to follow.

H1 charts;

image.thumb.png.bd95c18dd3944dd5d2f9f57a9ec4dcb8.png

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Dax caught out this morning. Slightly better than expected German GDP figures on the Euro open sent Dax racing higher but Dow found sellers at the H4 resistance level and reversed hauling Dax down with it.

H1 charts;

image.thumb.png.671186105eac6c3f7c0ee40afbfe7fa1.png

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Dow currently retesting the recent low after the disappointing retail sales yesterday so waiting for either a break below or a reversal to retest the recent high. Not much on the calendar today. 

image.thumb.png.ee037ee80c5517a0bbbfa70e3fe7a11b.png

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On the weekly charts Dow and Dax have raced up to their respective weekly resistance levels while Ftse and Nikkei have broken through theirs.

US public holiday today, and no major calendar events so could be a bit directionless and consolidative today but would like to see Dow take on 26000 then 26069 and Dax attack 11387. 

Weekly charts;

image.thumb.png.06906e173f2639fd8ae964102d50e169.png

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