Support 6105 6086 6084 6067
Resistance 6154 6155 6162 6164 6192
Good morning. Not sure what that rise to 6200 was all about yesterday, probably just a short squeeze or a stop hunt as since hitting that we have dropped off, with the bears helped by a weak Asia session overnight. The 9901 Dax short was a corker and if anyone is still holding that then well done! Despite some initial support at 6155 after that rise, the chart has started to look bearish again so we might well be on for sub 6100 today.
US & Asia Overnight from Bloomberg
- S&P 500 futures slip after index dropped from 2016 high
- Investors turn attention to central banks as RBA, RBI meet
Asian stocks slumped to a five-week low and emerging-market currencies weakened as investors reassessed last month’s rally in riskier assets. Oil declined for a third day, while the yen and Treasuries gained.
Energy producers led losses in the MSCI Asia Pacific Index and the yen’s three-day surge weighed on Japanese exporters. Chinese shares slipped in Hong Kong after a local holiday on Monday, with Standard & Poor’s 500 Index futures signaling a second day of losses in U.S. shares. South Korea’s won dropped 0.8 percent, while Australia’s dollar fell before a central bank policy meeting. U.S. crude slid for a third day ahead of government data forecast to show increasing stockpiles. Thirty-year Treasury yields declined to their lowest level since Feb. 25.
After adding more than $4.5 trillion to the value of global equities in March and sending developing-nation currencies to their best monthly gain since at least 1996, investors are waiting for fresh reasons to keep buying. Central banks, which helped fuel last month’s rally, will remain in focus this week as policy makers in Australia and India meet on Tuesday and the Federal Reserve releases minutes from its latest meeting on Wednesday.
“There is a bit of a risk-off theme at present with oil prices down and equities in negative territory in the U.S.,” said Khoon Goh, a senior foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. in Singapore.
Stocks
The MSCI Asia Pacific gauge lost 1.3 percent at 11:32 a.m. in Hong Kong, set for its lowest close since March 2. Japan’s Topix slumped 1.8 percent, while Australia’s S&P/ASX 200 Index dropped 1.4 percent and the Hang Seng China Enterprises Index slumped 1.6 percent. S&P 500 futures declined 0.3 percent after the U.S. benchmark dropped 0.3 percent on Monday.
“There’s a big divergence in opinion right now over whether this rally is a head fake or not,” Craig Sterling, head of U.S. equity research at Pioneer Investments in Boston, said by phone. “Stocks have gone up on not a lot of volume and we’re kind of at an inflection point right now.”
Currencies
The Bloomberg JPMorgan Asia Dollar Index dropped 0.1 percent, with Malaysia’s ringgit slipping 0.4 percent on lower oil prices and Indonesia’s rupiah dropping 0.3 percent.
Australia’s currency retreated 0.4 percent, with all 26 economists surveyed by Bloomberg predicting the nation’s cash rate will be kept at 2 percent Tuesday. The New Zealand dollar lost 0.3 percent, a third day of declines, after a gauge of business confidence in the first quarter dropped.
The yen, which typically moves at odds with Japanese equities, added 0.4 percent to 110.89 per dollar after gaining 0.3 percent last session.
“The yen has captured all the caution about the global economy that investors were building up earlier in the year,” said Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York.
India’s rupee was little changed. The Reserve Bank of India will probably lower the benchmark repurchase rate to 6.5 percent from 6.75 percent, according to 36 of 42 economists in a Bloomberg survey. Four see a reduction to 6.25 percent and two see no change.
Commodities
Oil retreated 0.4 percent to $35.57 a barrel in New York. Inventories probably rose by 2.85 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report due Wednesday.
Gold increased 0.8 percent in the spot market, while copper added 0.9 percent to pace gains among industrial metals.
Bonds
The yield on 30-year U.S. Treasuries declined 2 basis points to 2.58 percent, while the rate on benchmark 10-year notes dropped 2 basis points to 1.74 percent. The Fed won’t raise interest rates again until December, futures contracts indicate. BlackRock Inc., the world’s largest money manager, says policy makers are letting the economy “run hotter” before acting.
In Australia, 10-year yields fell 4 basis points to 2.43 percent. [Bloomberg]
FTSE 100 Outlook and Prediction
It looks bearish to me for today so shorting the rallies is the best plan in my opinion, especially after what is looking more like a stop hunt/short squeeze yesterday to 6200. We have the daily pivot at 6163, as well as some other resistance levels once again between 6150 and 6160 so I think if we get an early rise to this area then once again its worth a short from here. That looks the best trade for the FTSE so I have only put the one in the trade plan as my main trade. We have Draghi talking later this week (Thursday) so thats something to bear in mind, as we may see another pump and dump around that. The Bianca trends are both showing support at the 6085 area, not far off the recent lows, so if we get that low then there will be support there, and maybe worth a long if you’re feeling brave. Not too much more to say really, apart from I am remaining bearish for the moment and still expect us to see 6010 soon, with the failure once again to break 6200 yesterday.