Support 6150 6126 6117 6074
Resistance 6163 6185 6211 6254
Good morning. The FTSE can be annoying sometimes can’t it! Short got stopped then it dropped, long got stopped then it bounced. Stops are a pain sometimes…. however the Dax trade worked well so some decent points there instead. Annoying really as it did play out as per the arrows, just overshot my levels a bit. That’s trading! We have dropped off again overnight from the 6168 level which hit yesterday evening and again in the small hours and holding around the 6150 pivot area as I write this. That said, with the climb yesterday and the slow reaction at the 6166 early in the day, it feel like we might push up a bit higher to test the 6211 area, possibly 6254.
US & Asia Overnight from Bloomberg
Shares of Asian raw-materials producers rallied for a second day, extending their rebound from a one-month low as metals prices climbed and the greenback weakened. Crude oil fell toward $44 a barrel and New Zealand’s dollar led gains among major currencies.
More stocks rose than fell on the MSCI Asia Pacific Index, which snapped a six-day losing streak on Tuesday. Australia’s benchmark climbed to a nine-month high as BHP Billiton Ltd. gained more than 3 percent. S&P 500 futures declined following the gauge’s strongest rally in two months. Crude retreated in New York ahead of American inventories data, while copper advanced with gold. The Kiwi rose from near its weakest level since March as a central bank report damped speculation interest rates will be cut. The yen strengthened following its biggest two-day drop since January.
Global equities show signs of stabilizing after a selloff last week that erased more than $1 trillion of value. This month’s data out of the world’s biggest economies suggest global growth is subdued, pushing out expectations for the Federal Reserve’s next interest-rate increase. Chinese inflation figures gave a modest lift to investor sentiment on Tuesday, showing that declines in factory-gate prices moderated in April.
“We’re seeing follow-through buying given the bounce in commodities and rally in U.S. shares,” said Chris Green, director of economics and strategy at First NZ Capital Group Ltd. in Auckland. “Prospects of a delay in the Fed raising interest rates and firmer inflation data out of China are supportive of equities in the near term.”
Asian companies including Toyota Motor Corp., Bridgestone Corp. and Hong Kong Exchanges & Clearing Ltd. report earnings Wednesday. Thailand will review interest rates, with all 21 analysts in a Bloomberg survey predicting no change, and the U.K. has industrial output figures due.
Stocks
Seven out 10 industry groups on the MSCI Asia Pacific Index advanced as of 12:38 p.m. Tokyo time, with telecoms and raw-materials producers leading the way. Australia’s S&P/ASX 200 Index was up 0.6 percent, rallying with benchmarks in Shanghai and Tokyo. Hong Kong’s Hang Seng Index sank to a two-month low.
BHP Billiton, the world’s biggest mining company, climbed by the most in three weeks. Toyota gained for a fourth day before it reports on full-year earnings and Sumitomo Heavy Industries Ltd. jumped as much as 14 percent after posting profit that beat estimates. A Tokyo-listed exchange-trade fund that tracks Brazilian shares climbed more than 4 percent before the Latin American country’s Senate votes Wednesday on whether to impeach President Dilma Rousseff.
Futures on the S&P 500 Index fell 0.1 percent, after the benchmark rose 1.3 percent on Tuesday.
Currencies
The Kiwi strengthened 0.6 percent to 68.02 U.S. cents after the Reserve Bank of New Zealand said it was only at the assessment stage in considering further macro-prudential controls to help curb the nation’s booming housing market. The lack of progress in introducing measures targeted at home prices damped speculation interest rates will be cut, according to Sam Tuck, a currency strategist at ANZ Bank New Zealand in Auckland.
The yen climbed 0.4 percent to 108.84 per dollar, after sliding more than 2 percent over the last two days. The currency has gained more than 10 percent this year, making it harder for the Bank of Japan to achieve its inflation goal, and Finance Minister Taro Aso reiterated Tuesday that the government can intervene to stabilize the exchange rate if necessary.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, fell for a second day. The gauge had its strongest rally in almost a year in the five days through Monday.
Commodities
West Texas Intermediate crude fell 0.5 percent, after climbing 2.8 percent in the last session. Concern over supply disruptions in Nigeria and Libya, holders of Africa’s largest oil reserves, drove Tuesday’s gains, though this was countered by expectations that U.S. data on Wednesday will show American stockpiles expanded from the highest level since 1929.
Copper, Aluminum and nickel rose by about 0.7 percent in London. The London Metal Exchange’s LMEX Index of six industrial metals closed at a one-month low on Tuesday. Gold rose 0.3 percent, buoyed by the dollar’s retreat.
Soybeans rose 0.5 percent, building on the last session’s 5.6 percent surge. The U.S. Department of Agriculture forecast on Tuesday that world soybean inventories will fall 8.1 percent by September 2017, and Brazil — the top exporter — cut its outlook for the country’s current crop after drought conditions hurt production.
Bonds
U.S. Treasuries due in a decade yielded 1.75 percent, near a one-month low. Odds on the Fed raising key rates at its next meeting in June have dropped to 4 percent, from 17 percent a week ago, before weaker-than-projected U.S. payrolls data undermined perceptions of the economy’s strength. A report on retail sales is due Friday, along with an update on producer prices.
The New Zealand central bank’s lack of initiatives for the housing market dealt a blow to the country’s government bonds, with 10-year yields rising three basis points to 2.65 percent.
In Japan, 10-year yields were little changed at minus 0.1 percent. A year after the so-called German bund tantrum, which erased more than $750 million in value from the global government debt market, Goldman Sachs Group Inc. is predicting Japan will be a potential source for the next international bond selloff.
“A convincingly large and effective fiscal expansion in Japan accommodated by further BOJ easing could be enough to turn market dynamics around, and have international ramifications,” Francesco Garzarelli, co-head of global macro and markets research at Goldman Sachs in London. “Global bonds would sell off in sympathy.” [Bloomberg]
FTSE 100 Outlook and Prediction
The two main levels I am looking at today at support at the 6120 area and resistance at the 6210 area. We have a 7 point dividend today as well, so that will effect open positions at the bell (4:30 on IG, 9pm on others, only on the daily bets though). 7 points might be enough to see some divi hunters come in buying at 4pm’ish for a rise towards the bell so it can be worth a speculative long around then. Looking at the 30minute chart I am expecting a dip initially, as we are also below the pivot at 6150 which is acting as resistance to start things off today. A dip down to S1 and the green coral line on the 2hr at 6117 looks possible. If that holds then the bulls might start some buying there for a push back to 6185, and maybe even the 6211 area. We are at the top of the 10 day Bianca and Raff channels at 6165/75 area which is why the FTSE is struggling a bit to push past these levels over the past 24 hours. Likewise, the Dax is just at the top of the 10 day Raff and Bianca so it will be interesting to see if the bulls can hold 10000 and push past 10080. So, dip and rise is what I am thinking today.