Support 6102 6074 6055 6049 6045
Resistance 6120 6132 6143 6198
Good morning. The lower support areas held well yesterday and we have regained 6100 overnight though it certainly started to look more bearish yesterday, with the drop in the morning. I thought the bull might have been able to retest the 6155 area before the bears took over but we sold off from the start. The long off the daily channels worked out well, though only managed 6100 before falling back. Gold fell back from its 1237 high but only by 10, while the bigger timeframe FTSE charts are still looking like more potential downside. We have a 9.46 dividend today so bear that in mind later, and we may also see some divi hunters come in for that before the bell this afternoon.
US & Asia Overnight from Bloomberg
- Asian Stocks Fluctuate as Crude Rebound Buoys Energy Producers
- Japan’s Topix erases slide; U.S. equity index futures advance
- Crude gains as Kuwait says freeze possible without Iran
Oil rebounded amid optimism a deal will be struck to freeze output, spurring gains in Asian energy shares. The yen held near a 1 1/2-year high, while U.S. index futures rose and Treasuries retreated.
U.S. crude climbed a second day, jumping more than 2 percent after Kuwait indicated producers could reach an agreement to arrest output even if Iran doesn’t join in. A gauge of Asian energy producers rose for the first time this month, while the the Malaysian ringgit led a rebound in emerging-market currencies. Copper advanced along with tin.
Investors remain cautious in the wake of last month’s optimism, with International Monetary Fund chief Christine Lagarde highlighting risks to the global economy. More detail on the Federal Reserve’s dovish stance could be forthcoming Wednesday, with minutes of their March gathering due. U.S. political uncertainty was heightened as Texas Senator Ted Cruz beat Donald Trump in Wisconsin’s Republican presidential primary on Tuesday, and Bernie Sanders claimed a victory over Hillary Clinton in the Democratic contest. Pfizer Inc. decided to scrap a planned $160 billion merger with Allergan Plc, according to a person with knowledge of the matter.
“It’s been a bit volatile the last few days, but emerging markets are quite resilient, ” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd. in Tokyo. “At the start of the year, the argument wasn’t that Japan itself was bad. Rather, because emerging markets are bad, Japan and the U.S. will be dragged down too. That type of thinking was quite prevalent then, but as emerging markets are proving to be resilient, that kind of logic is breaking down.”
Stocks
The MSCI Asia Pacific Index was up 0.1 percent as of 11:56 a.m. Tokyo time as the energy sub-gauge rose 0.9 percent, its first gain since March 31. The Topix recovered from a 1 percent slump to be up 0.2 percent. Australia’s S&P/ASX 200 Index advanced 0.6 percent and the Kospi index in Seoul added 0.4 percent.
The Shanghai Composite index was little changed along with the Hang Seng Index in Hong Kong. Taiwanese equities slid 1.7 percent as markets in Taipei opened after two days of public holidays.
Futures on the Standard & Poor’s 500 Index were up 0.5 percent following a 1 percent drop in the U.S. benchmark last session. The index capped its biggest two-day slump since Feb. 9. The S&P 500 hadn’t moved more than 1 percent in either direction over the previous 15 sessions, a trend not seen since March 2015.
Commodities
Oil continues to exert influence over global financial markets, with Kuwait claiming a deal on output can be reached without Iran when major suppliers meet April 17. Saudi Arabia spurred a selloff in oil earlier this week by questioning its own involvement in the freeze should Iran not take part.
“Oil is going to be very volatile in the lead up to the meeting,” Angus Nicholson, a market analyst at IG Ltd. in Melbourne, said by phone, referring to the mid-April talks on the freeze. “It’s so uncertain as to whether a deal is going to be reached.”
West Texas Intermediate crude for May delivery jumped 2.5 percent in New York to $36.78 a barrel, while Brent crude for June delivery rose 1.6 percent to $38.47 a barrel.
Gold retreated 0.1 percent in the spot market, while copper added 0.3 percent, climbing for a second day. Tin rose 0.6 percent.
Currencies
The yen was down 0.1 percent at 110.47 per dollar, after climbing as high as 109.95 on Tuesday, its strongest level since October 2014. Australia’s dollar rose 0.3 percent, gaining for the first time this week, and the Canadian currency strengthened 0.1 percent.
A gauge of Asian currencies advanced, snapping three days of declines, with the Malaysian ringgit rising 0.4 percent and the Thai baht appreciating 0.3 percent.
Bonds
Treasuries retreated, with the 10-year yield increasing two basis points to 1.74 percent. Japanese similar-maturity notes were little changed at minus 0.07 percent. South Korean bonds were yielding 1.79 percent after reaching a record-low 1.77 percent on Monday. [Bloomberg]
FTSE 100 Outlook and Prediction
We have had a bit of a bounce overnight from yesterdays low and with oil rising we may well see a bit more upside towards the 200ema on the 30min at 6132. The daily moving averages are both around this level and whilst not bearish, are close to crossing to a bearish set up. Once again we are still within the range that we have seen for a while now, 6070 – 6200, though with yesterday pushing more to the downside we may still see 6010. Today is also the start of the new tax year so we may see some new ISA money etc coming in to help an early rise as funds etc get bought. As mentioned above there is a 9.4 divi later so may see some buyers come in around 16:10 – can be worth going long at this time and closing before the bell (if the divi is applied at 16:30 on your platform). Generally I am still feeling bearish and expect us to see 6000 before too long, the failure again to break 6200 makes me think that the 6350 level is unlikely to be seen in the near term, but you never know. For today that 6132 level looks worth an initial short, though if it breaks though that then flip to a long for a run at 6198, where we have the top of the 10 day Bianca.