Support 6143 6140 6138 6074 6064
Resistance 6173 6177 6190 6210 6220 6241
Good morning. The most frustrating thing yesterday was the short order was set at 6206 and the highest sell price was 6204 before it then dropped steadily for most of the day. Drives you mad sometimes! The low at 6107 has held well since, with a fairly decent overnight rise, helped by an upbeat FED panel discussion yesterday, with Yellen reiterating that they do look at the global situation before taking action. Meanwhile, in the UK, the general feeling is that interest rate rises will not happen before 2020.
US & Asia Overnight from Bloomberg
- Japan’s Fast Retailing plunges after cutting profit outlook
- Yen takes a step back after five-day surge; ringgit declines
Asian stocks erased declines as the yen’s first drop in six days buoyed Japanese equities. The Australian dollar and the South African rand led gains among commodity currencies as oil and industrial metals rose.
The Topix index swung to a 1.4 percent advance in Tokyo as the yen pulled back from its strongest level in 1 1/2 years, while U.S. equity-index futures signaled a rebound from Thursday’s drop. Crude oil jumped, heading for its seventh weekly advance in eight weeks, as U.S. output continues to decrease before a meeting between suppliers to discuss freezing production. Nickel added 0.7 percent to lead base metals higher, while the Aussie and the rand strengthened at least 0.4 percent.
Investors are pausing for breath at the end of a wild week that saw equities whipsawed as volatility in the $5.3 trillion-a-day foreign-exchange market climbed toward a 2011 high. The top forecaster for the yen is bracing for it to surge past 105 versus the dollar as demand for havens sidelines efforts by the government to stem the currency’s rally.
“The yen has taken over from China as the antagonist,” said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand in Auckland. “The only certainty is uncertainty reigns.”
Fed Impact
Minutes from the Federal Reserve’s March meeting this week noted concern over the global outlook and International Monetary Fund chief Christine Lagarde signaled the organization is likely to lower its forecast for world growth. Alan Greenspan, reflecting in a Thursday panel discussion on international woes he confronted as Fed chairman in the 1990s, said global developments must inevitably be taken into account by U.S. policy makers. Current Chair Janet Yellen, who was also on the panel, said she and her colleagues carefully consider the impact of their actions on the rest of the world.
China is due to publish a raft of economic indicators next week including March inflation and exports, with reports on European consumer prices and U.S. retail sales also scheduled.
Stocks
The MSCI Asia Pacific Index added 0.1 percent as of 1:51 p.m. Tokyo time, reversing a loss of as much as 1.4 percent. The Topix’s gain pared its weekly decline to 0.8 percent. Fast Retailing Co. plunged 12 percent after Asia’s biggest retailer cut its profit forecast.
Hong Kong’s Hang Seng Index retreated 0.7 percent. Technology shares drove Australia’s S&P/ASX 200 Index down 0.4 percent. The Kospi index in Seoul dropped 0.3 percent, while New Zealand’s S&P/NZX 50 Index was down 0.4 percent to pare its eighth straight weekly advance.
Futures on the S&P 500 added 0.2 percent Friday, after the U.S. benchmark slid 1.2 percent last session, when declines in Goldman Sachs Group Inc. and JPMorgan Chase & Co. led the Dow Jones Industrial Average down by more than 170 points.
Currencies
The yen snapped a five-day climb, weakening 0.6 percent to 108.88 per dollar after surging to 107.67 last session, its strongest level since October 2014. Despite Friday’s pullback, the currency is still up more than 2.5 percent this week as the Fed’s dovish approach to U.S. interest-rate policy weighs on the greenback and as traders speculate that officials are reluctant to intervene in the market.
Japan’s Finance Minister Taro Aso said Friday that rapid yen movements — whether strengthening or weakening — are undesirable, especially if they’re abrupt. Recent movements have been one-sided and the government will act appropriately if necessary, he said.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was little changed. The Aussie gained 0.6 percent to 75.39 U.S. cents, while the rand strengthened 0.8 percent.
Bonds
While benchmark Treasuries unwound some of last session’s gains, Australian bonds led an advance in Asia. Yields on Australian government debt due in a decade fell five basis points, or 0.05 percentage point, to 2.40 percent. Rates on similar maturity Treasuries were up two basis points to 1.71 percent after falling seven basis points on Thursday.
U.S. debt has advanced along with other haven assets such as the yen and gold amid renewed concern that easy monetary policies haven’t boosted global growth.
“We are seeing central bank fatigue,” Niv Dagan, executive director at Peak Asset Management LLC in Melbourne, said by phone. “We’re definitely moving to a risk-off scenario and there’s been a strong flight to safety. Investors are cautious and are extremely nervous that global central bank intervention won’t actually stimulate growth in the economy.”
China’s 10-year sovereign bonds are heading for the biggest weekly drop since May, with yields up eight basis points to 2.92 percent, before a report next week that’s expected to show inflation accelerated in March.
Commodities
West Texas Intermediate crude rallied 2.3 percent to $38.11 a barrel, after falling 1.3 percent last session. Futures are on track for a 3.6 percent weekly advance. Brent was up 1.8 percent to $40.14 on Friday.
Speculation has returned that Russia and OPEC members can reach a deal on freezing oil output when they meet in Doha on April 17. Saudi Arabia has said it will only agree if it’s joined by other suppliers including Iran, while Kuwait said a deal can be done without Iran’s support. An unexpected drop in U.S. crude inventories in data out this week also helped crude’s recovery.
Copper for three-month delivery added 0.3 percent, with nickel and tin also climbing. Copper slumped the most in three months last session, wiping out its gains for 2016, as miners and investors gathering at an industry conference in Chile expressed concern over demand for the metal. Nickel rallied 0.8 percent after sliding 2.3 percent Thursday. [Bloomberg]
FTSE 100 Outlook and Prediction
Today has a feeling of buying the dips as a good plan, with that 6140 area showing as decent support on the 30min chart so a good point to enter. The live charts pivot is 6153, whilst the IG one is 6142, as well as a cluster of supports around 6138. We have the top of the Bianca 10 day at 6210 today, and yesterday the bulls yet again failed to break and hold 6200. One time they might well manage it and if they do then we should see a rise to 6300 fairly quickly. At the moment we are stuck in the 6100 to 6200 range still. Not too much to say really as fairly simple plan which is the long at 6140. There is a bit of news out at 09:30 but market impact is low to medium, as it revolves around manufacturing and industrial production. If the 6140 is broken by the bears then I think we will be on for a trip towards 6075 again which is the recent low and the bottom of the 20 day Bianca channel (so worth shorting a break of 6140). As its Friday stay cautious as they can be funny days to trade.