Good morning, I hope you had a good weekend. Well Friday was rather bullish in the end with the S&P making a new high and the dow crossing, and holding above 18000. Sunday night has seen a slip back below that though. Monday sees the US closed for Presidents day so we could be on for a fairly slow day range wise. The top of the 10 day Bianca at 6901 is worth a short if seen I reckon. News of the Ukraine cease fire is good, but another lone wolf attack, this time in Copenhagen, isn’t. Meanwhile, a meeting of eurozone finance ministers will take place in Brussels on Monday to discuss how to proceed with Greece’s bailout, though Grexit now looks inevitable according to Ken Clarke. Greece has more than €320bn (£237bn) in debt outstanding, about 175pc of GDP, mostly in the form of bailout loans from the euro area and the IMF.
US & Asia Overnight from Bloomberg
(Bloomberg) — The yen held gains after data showed Japan’s economy grew at a slower pace than analysts projected, while U.S. index futures retreated. New Zealand’s dollar rose on an unexpected increase in retail sales growth and Brent crude oil extended its advance above $60 a barrel.
Japan’s currency was steady at 118.60 per dollar by 8:55 a.m. in Tokyo, after gaining more than 1 percent over the two previous trading days. The kiwi added 0.3 percent after retail sales grew a more-than-estimated 1.7 percent. Standard & Poor’s 500 Index futures dropped 0.2 percent following the U.S. gauge’s climb to a record Friday. The NZX 50 Index fell 0.6 percent and Australia’s S&P/ASX 200 Index lost 0.2 percent. Brent oil rose a third day, climbing to $62.03 a barrel.
While central banks from Japan to the U.S. update markets this week and Greece holds talks with euro-area finance chiefs, trading will be interrupted by holidays, including Monday’s Presidents’ Day in the U.S. and multi-day New Year breaks from China to Vietnam. The Bank of Japan is set to meet from Tuesday, while minutes of the Federal Reserve’s January meeting are due Wednesday. Ukraine’s truce came into force early Sunday.
“It’s in nobody’s interest to actually see Greece out of the euro zone at this point, so my sense is they’ll muddle through to an agreement,” Chris Green, director of economics and strategy in Auckland at First NZ Capital Ltd., said by phone Monday. “But there’s always a real risk of a policy mistake or policy misstep.”
The yen climbed 0.3 percent versus the greenback last week, with the BOJ said to view further monetary easing as counterproductive for now. More stimulus could trigger losses in the currency that damage confidence, people familiar with the central bank’s discussions said last week. [ref]
FTSE Outlook
Could be a fairly flat day with the US closed, but any Greece news that may or may not leak might scupper that sentiment. We have the top of the 10 day Bianca at 6901 initially, which will act as resistance, with 6920 above that. Looking at the 30 minute chart, we have support initially at the daily pivot at 6863, and also support from a PRT 30min channel at 6868; below that then the next support is 6855 – a break below that sees 6839 and 6793, the bottom of the 10 day Bianca channel. If the pivot and/or the 6855 area holds then a push to 6901 looks likely. Above this then I am expecting stronger resistance at the 6935 level which has long been a resistance level of note, and an area that is worth a short. Generally all looks pretty bullish still, but just need a few “is now the time to buy shares?” headlines in the papers to stop it in its tracks.