Good morning I hope you had a good weekend. Well NFP Friday was rather wild wasn’t it – I really wasn’t expecting nearly 200 points off the 6055 level otherwise I wouldn’t have moved the stop to breakeven quite so quickly! well done those that emailed me and held for 6100 and higher. Following the poor jobs data the chances of rates rises this year diminished (as I have said all along, will be 2016 at the earliest) hence the rally in pretty much everything. For the moment the bulls are in charge.
US & Asia Overnight from Bloomberg
Asian shares rose, with the regional benchmark index heading for its longest winning streak in almost three months, after a weaker-than-expected U.S. jobs report reduced the case for the Federal Reserve to raise interest rates.
The MSCI Asia Pacific Index climbed 0.4 percent to 126.92 as of 9:01 a.m. in Tokyo, advancing for a fourth day. U.S. employers added 142,000 jobs in September, less than the lowest estimate of 96 economists surveyed by Bloomberg, figures from the Labor Department showed Friday. The report increased the likelihood that near-zero interest rates will persist into next year, keeping in place the stimulus that has underpinned the world’s biggest economy.
“Throughout this year we’ve had moments when stocks rose on an increased probability of rate increases in the U.S., but at the end of last week the market saw the probable delay as a positive,” said Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo.
E-mini futures on the Standard & Poor’s 500 Index slipped 0.2 percent. The underlying measure jumped 1.4 percent on Friday, wiping out an earlier drop of as much as 1.6 percent in its biggest intraday rebound since October 2011.
Japan’s Topix index rose 0.9 percent, and South Korea’s Kospi index increased 0.7 percent. Australia’s S&P/ASX 200 Index jumped 1.8 percent as commodity shares led gains. New Zealand’s NZX 50 Index added 0.6 percent. Hong Kong’s equity market is yet to open, while those in mainland China remain closed for a holiday.
Participation Rate
The U.S. jobless rate held at 5.1 percent, and wage growth was little changed from the prior month. Joblessness remained low as people left the workforce, pushing the participation rate down to 62.4 percent, the lowest since October 1977.
The probability the Fed will move by its Dec. 15-16 meeting fell to 33 percent from 46 percent before the jobs data, according to futures data compiled by Bloomberg. The odds for the January meeting slid below 50 percent.
The MSCI Asia Pacific Index added 1.1 percent last week. The measure slumped 15 percent in the third quarter amid concern about China’s economic slowdown and confusion over the timing of the first U.S. interest-rate increase since 2006. [Bloomberg]
FTSE Outlook
For the moment the trends are pretty firmly up, and there is a chance the Dow will be testing 16600 soon – decent resistance level here if so. I have gone for an initial dip down to the 25ema line on the 30min chart where we have some decent support and also the bottom of the channel. At the moment everything looks pretty hopeful for a rise towards 6300. I have gone for an initial dip as we have some PRT resistance at the 6246 level on the daily charts and its also the overnight high. We have broken out above the Bianca channels (10 day top is 6207 so may get a back test of that level today) and are nearly at the top of the 20 day Raff at 6268 so look around here for resistance as well. All fairly simple in terms of the plan today – go long on any initial dip to 6220.