6200 broken with good Chinese exports 6325 6390 resistance 6230 support

Support 6250 6241 6229 6198 6192
Resistance 6273 6290 6302 6324
Good morning. Well the bulls have finally managed to pull away from the 6200 area after that long tussle with the bears, helped in no part by a strong Asia overnight as Chinese Exports rebounded in March, boosting their growth outlook. we stalled a bit yesterday around the 6250 area but the most gutting part was having the long order stopped at 6175 – right on the low! Certainly drives you mad sometimes.

US & Asia Overnight from Bloomberg

• Steepest commodities rally since August boosts BHP Billiton
• Copper advances as oil trades near $42; ringgit strengthens

Asian stocks climbed to a three-month high as Chinese trade data added to signs of a pickup in the world’s second-largest economy, supporting a rebound in commodities. Haven assets including the yen and sovereign bonds retreated.

Raw-materials producers and energy companies spearheaded a rally in the MSCI Asia Pacific Index, while futures on U.S. and U.K. benchmark share indexes rose. Copper and zinc led gains among industrial metals, while iron ore jumped by the daily limit in China. U.S. crude retreated by about 1 percent, after surging 13 percent in three days on prospects for an output freeze by leading producers. Malaysia’s ringgit gained against all 31 major counterparts and the Japanese yen was the worst performer.

Crude rebounded from a 13-year low over the past two months on optimism a global glut will end as leading producers including Russia and Saudi Arabia prepare to discuss capping output at an April 17 meeting in Doha. Speculation the oil market will soon find some enduring stability is helping to prop up equities, even as investors brace for what’s projected to be the worst U.S. earnings season since the global financial crisis. China’s exports jumped by the most in a year in March and declines in imports narrowed, adding to evidence of stabilization in the world’s second-biggest economy.

“Higher oil prices are triggering a retreat in risk-off moves,” said Masaaki Yamaguchi, a Tokyo-based equity market strategist at Nomura Holdings Inc., said by phone. “Strength in the yen is also easing, and the currency market is tilted toward a risk-on direction. Chinese trade data released today was weak as commodity prices had fallen, but it’s improved from January and February and concern over the Chinese economy is retreating. These are all acting as positive factors for the market.”

Stocks
The MSCI Asia Pacific Index rose 1.7 percent as of 1:24 p.m. Tokyo time, climbing for a sixth day. Measures of energy and materials stocks climbed at least 2.6 percent with BHP Billiton Ltd. — the world’s biggest miner — surging 5.1 percent in Sydney. Benchmarks in Hong Kong, Shanghai and Tokyo all gained more than 2 percent.

China’s overseas sales in March increased 11.5 percent from a year earlier in dollar terms, rebounding from a 25 percent plunge in February, and declines in imports narrowed, a report showed Wednesday. The International Monetary Fund on Tuesday boosted its 2016 economic growth forecast for the nation to 6.5 percent from 6.3 percent, while trimming its projection for global expansion.

“Economic indicators are going in the right direction and there’s more evidence that Chinese stimulus measures are positively impacting the economy,” said Shane Oliver, head of investment strategy at Sydney-based AMP Capital Investors Ltd., which oversees about $122 billion. “The fundamental factors that were driving concerns earlier this year seem to have faded.”

Futures on the Standard & Poor’s 500 Index rose 0.2 percent before JPMorgan Chase & Co., the biggest U.S. bank by assets, reports first-quarter earnings on Wednesday. Contracts on the FTSE 100 Index added 0.6 percent ahead of results from U.K. supermarket company Tesco Plc.

Parliamentary elections take place in South Korea Wednesday, where financial markets are shut for a holiday. Bourses are also closed in Sri Lanka and Thailand.

Currencies
The yen weakened 0.3 percent versus the dollar, after slipping 0.6 percent last session to break a seven-day advance. The currency strengthened more than 4 percent in is recent winning streak as the Federal Reserve’s dovish monetary policy outlook skewered the greenback, and traders bet the Bank of Japan wouldn’t intervene in the foreign-exchange market.

The ringgit strengthened as much as 0.9 percent to an eight-month high as the recent gains in crude prices brightened prospects for Malaysia, Asia’s only major net oil exporter. Australia’s dollar rose toward its strongest level since June after a surge in prices of iron ore, the country’s top export.

“The fact that imports were not as bad as expected is actually a good sign for commodity exporters like Australia,” said Chester Liaw, a senior economist at Forecast Pte Ltd in Singapore. “China data has reflected stronger and steadier demand for commodities overt the past one or two months.”

Commodities
The Bloomberg Commodity Index was little changed, after a three-day jump of 4.4 percent that marked its steepest rally since August.
West Texas Intermediate crude retreated 1.1 percent to $41.72 a barrel, retreating from the highest close since November. U.S. oil inventories rose by 6.2 million barrels last week, the American Petroleum Institute was said to have reported late Tuesday. American government data Wednesday is forecast to show stockpiles climbed by 1 million barrels, keeping supplies near the highest level since 1930. There’s hope a deal to freeze output by major producers can be reached at the Doha meeting regardless of whether Iran participates, said Kremlin press secretary Dmitry Peskov.

Iron ore futures in Dalian, China rose by the local exchange’s daily limit for the second day in a row, climbing 3.7 percent to 424.5 yuan a metric ton in the morning trading session. The contracts have surged 13 percent in three days.

Zinc rallied after inventories in warehouses tracked by the London Metal Exchange declined the most in more than eight years, signaling a potential improvement in demand. It climbed 0.7 percent, after a 4.2 percent jump in the last session. Copper gained 1 percent and nickel rose 0.3 percent.

Soybeans in Chicago rose as much as 1.3 percent to $9.48 a bushel, the highest for a most-active contract since Aug. 12. The U.S. Department of Agriculture on Tuesday cut its domestic inventory forecast to 445 million bushels from 460 million bushels in March on a stronger U.S. export outlook.

Bonds
The yield on 10-year U.S. Treasuries climbed to a two-week high of 1.80 percent as investors favored riskier assets than government bonds. Australia’s yield jumped six basis points to 2.52 percent and New Zealand’s increased five basis points to 2.87 percent.

The cost of insuring Asian sovereign debt against default declined. The Markit iTraxx Asia index of credit-default swaps fell two basis points to 142, according to prices from Australia & New Zealand Banking Group Ltd. That’s the lowest since March 18, according to data provider CMA. [Bloomberg]

FTSE 100 Outlook and Prediction

Having finally pulled away from the 6200 level I would expect the bulls to attempt to push further north, if they can break and hold above 6272. This opens the way to 6325 and then 6375. That said, as we are just sitting on some resistance at that 6275 as I write this then we may well get a dip down to the pivot at 6230 before another push up, maybe driven by a bit of profit taking, and maybe by a bit of a gap closing attempt. That said, Australia’s session often gives good clues and that rose all day from the off, helped by a rise in commodities, so the bias for me is still bullish on the FTSE (somewhat stating the obvious but I can see further upside today). We are just testing the top of the 20 day Raff at this 6275 area which is why I think some will take profit here and we get the dip, and thats been a decent rise since 6175 earlier. Below the pivot we have support from the 200ema on the 30min at 6200 now, and a level that is likely to act as fairly solid support now its finally been broken, and we also have S1 at 6197 today. Additionally the 2 hour chart has gone bullish (obviously after that rise from 6175) and is showing support at 6229. So, for the moment its buy the dips – pivot at 6230 and 6200 being the likely entry points.