Support 6404 6390 6385 6367
Resistance 6441 6493 6505 6519
Good morning. Just when the bears thought they were making some headway with that dip yesterday morning from 6393 the bulls come back at them and take it to 6430! As such the general trend is still up with any dips being bought, a pattern quite possibly continuing today as we have the ECB rate decision at 12:45 then Draghi is holding a press conference at 13:30 – will he mention more silver bullets for the future? We also have US jobs data out at 13:30 so likely to get some movement in prices around then.
US & Asia Overnight from Bloomberg
- Euro steady before ECB policy meeting as Aussie strengthens
- Oil buoyed by declines in U.S. output as silver climbs
Asian stocks rose to a four-month high as oil recovered to levels last seen in November and Chinese steel prices surged more than 5 percent.
All 10 industry groups advanced on the MSCI Asia Pacific Index. Brent crude traded near $46 a barrel after a report showed U.S. production slipped to the lowest since October 2014 and Iraq said talks to freeze output may occur next month. Steel reinforcement bars jumped to a 19-month high in Shanghai, buoyed by a strengtheningChinese property market. The euro was little changed before a European Central Bank policy meeting, after almost wiping out this week’s advance in the last session. Australia’s dollar rose toward a 10-month high.
Global shares have surged 16 percent since sinking to a three-year low in February, buoyed by oil’s recovery from below $30, signs of stabilization in China’s economy and upbeat U.S. corporate earnings. The rally also got a lift as Federal Reserve officials last month cut their forecasts for interest-rate increases in 2016 to two from four, saying global economic and financial developments continue to pose risks.
“Recovering fundamentals and the fact that the Fed is going to hold rates for a while is certainly helping sentiment,” Kirk Hartman, who helps oversee about $351 billion as Los Angeles-based chief investment officer of Wells Capital Management, said on Bloomberg TV. “People are becoming much more positive on China. People are realizing that China isn’t going to have a hard landing.”
General Motors Co., Microsoft Corp. and Visa Inc. are among U.S. companies announcing quarterly earnings on Thursday. Of 83 members of the S&P 500 Index to have reported so far, 78 percent beat analysts’ estimates. In Asia, results are due from China Unicom (Hong Kong) Ltd. and Posco, South Korea’s biggest steelmaker. The ECB is expected to refrain from easing policy at a review on Thursday, after announcing unprecedented monetary stimulus in March. Indonesia’s central bank is also forecast to leave its benchmark interest rate unchanged, after cuts in each of the last three months.
Stocks
Japan’s Topix index rose 1.8 percent as of 1:32 p.m. Tokyo time, set for its highest close in more than two months, as the yen held near a two-week low amid speculation that the Bank of Japan will expand stimulus at a monetary policy review next week. The authority is likely to increase asset purchases, Goldman Sachs Group Inc. analysts wrote in a report published Wednesday. Mitsubishi Motors Corp., which tumbled 15 percent on Wednesday, has yet to start trading owing to a dearth of buyers after the automaker said it manipulated fuel-economy tests.
Benchmarks rallied across the region, with gauges in Hong Kong, Singapore and South Korea climbing to their highest levels of the year. The Shanghai Composite Index rose 0.4 percent from its lowest close this month, even after billionaire investor George Soros said Wednesday that China’s debt-fueled growth resembles the U.S. in 2007-08, before credit markets seized up and spurred a global recession.
China Mobile Ltd. rose 2.8 percent in Hong Kong after the world’s largest wireless carrier said profit grew in the first quarter as it added 64.2 million 4G customers. BHP Billiton Ltd., the world’s biggest mining company, jumped 3.3 percent in Sydney. Both stocks are the highest they’ve been since November.
Futures on the Standard & Poor’s 500 Index gained 0.2 percent, after the measure posted its highest close since Dec. 1. Contracts on the U.K.’s FTSE 100 Index added 0.1 percent.
Commodities
Brent crude, the global benchmark, was little changed at $45.79 a barrel following a 6.7 percent jump over the previous two sessions. It surged 4 percent on Wednesday as the Energy Information Administration reported that last week’s U.S. output was the lowest since October 2014. OPEC nations and some other major producers will meet in Russia, possibly in May, in an effort to agree on an output freeze, Iraq’s Deputy Oil Minister Fayyad Al-Nima said.
Steel rebar futures jumped for the fourth straight day on Shanghai Futures Exchange, advancing as much as 6.3 percent to 2,755 yuan ($425) a metric ton. The product that’s used to strengthen concrete is up 53 percent in 2016. Iron ore futures in Dalian rose to the highest since March 2015.
“You’ve got a tight market, you’ve got momentum, and you’ve got this fundamental driver for steel in the government boosting the infrastructure and housing side of things,” said Chris Weston, chief market strategist at IG Ltd. in Melbourne. “The rebar price is really leading the iron ore price at the moment.”
Silver rallied 1.9 percent, climbing for a third day after entering a bull market on Tuesday. Gold rose 0.3 percent and copper gained 0.1 percent.
Currencies
The euro was little changed at $1.1293, after sliding 0.5 percent on Wednesday, and Australia’s dollar advanced 0.2 percent. The yen strengthened 0.1 percent to 109.76 per dollar, after weakening 1 percent over the last three days.
“Since the beginning of this week, with the recovery in global sentiment, the yen has tended to depreciate to nearly 110,” said Hirofumi Suzuki, an economist at the treasury department of Sumitomo Mitsui Banking Corp. in Singapore. “Today’s move is just a slight correction. The trend to depreciate is still there.”
Indonesia’s rupiah fell 0.3 percent versus the greenback. All but three of 26 analysts surveyed by Bloomberg predict the nation’s central bank will refrain from cutting its benchmark interest rate at a Thursday review.
Bonds
The yield on 10-year U.S. Treasuries was little changed at 1.845 percent, after increasing nine basis points in the last three sessions. Inflows into inflation-indexed exchange-traded bond funds this year have already exceeded flows for all of 2015, suggesting investors are growing more bullish that inflation will climb toward the Federal Reserve’s 2 percent target.
The yield on Australian sovereign bonds due in a decade increased eight basis points to 2.61 percent, the highest level in a month. [Bloomberg]
FTSE 100 Outlook and Prediction
Most of todays action will be geared around the ECB and what is said at the press conference later. That said there is a fairly strong bit of resistance at the 6440 area where we have a major PRT line and also R1. Above this the 20 day Bianca at 6493 looks worth a go at shorting for a counter trend trade, though the bears haven’t really been able to do much this week since recovering from the 6270 area first thing Monday. As such, its still buy the dips really and the 30min chart remains bullish. We also have a rising 10min channel in play, with resistance at 6450 and support at 6410, along with rising daily channels. As I said its looking like the 6440 is fairly key, so worth an initial short here on any early rise, but I am also ready to switch to long if that looks like breaking and we are in buy the rumour mode for a rise towards 6500.