Good morning. Fairly slow day yesterday with a tight range in the end, though the bulls did try and break that 7020 level, and have held that area overnight. With that bit of strength yesterday the daily EMAs have crossed to bull for the moment, though the tops of the Bianca channels are only at 7054 and 7063. As you can read int he Bloomberg article below its all on interest rates (and Greece again when their next payment is due). Also, for those of you not in the UK, the market is closed on Monday as it is a bank holiday here in the UK. The US is also closed for memorial day. The next European “issue” is Britain which will effect markets. Germany has opened the door to a grand bargain and possible treaty changes to prevent Britain pulling out of the European Union, a risk deemed calamitous for German interests and for the long-term stability of the EU. “We have a huge interest in the UK remaining a strong and engaged member,” said Wolfgang Schäuble, the German finance minister. Mr Schäuble said Berlin is determined to find some way to combine its own drive for deep reforms of the EU system with Britain’s particular demands.
US & Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index paring its weekly drop, after U.S. shares rose to records as mixed economic data fueled bets the Federal Reserve won’t rush to raise interest rates.
The MSCI Asia Pacific Index added 0.2 percent to 153.09 as of 9:01 a.m. in Tokyo, on course for a 0.1 percent retreat this week. The Standard & Poor’s 500 Index advanced 0.2 percent on Thursday after unemployment claims dropped while home purchases unexpectedly fell. The Bank of Japan is forecast to keep policy steady when it wraps up a two-day policy meeting today.
“We’re seeing very mixed data come out of the U.S.,” Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which manages $124 billion, told Bloomberg TV. “I expect a relatively dovish message from Janet Yellen. The impression may be that the first rate hike gets pushed out even further,” he said.
Purchases of previously owned U.S. homes unexpectedly retreated in April, a sign the industry’s recovery remains uneven. Jobless claims over the past four weeks dropped to a 15-year low. Minutes of the Fed’s April meeting released Wednesday indicated officials probably won’t raise rates in June, though the option of tightening this year remains open. Fed Chair Yellen delivers a speech on the U.S. economic outlook Friday.
Japan’s Topix index was little changed. Australia’s S&P/ASX 200 Index gained 0.2 percent and South Korea’s Kospi index advanced 0.4 percent. New Zealand’s NZX 50 Index rose 0.2 percent.
Futures on Hong Kong’s Hang Seng Index climbed 0.2 percent and contracts on the Hang Seng China Enterprises Index of mainland firms traded in the city advanced 0.4 percent.
E-mini futures on the Standard & Poor’s 500 Index were little changed. [Ref]
FTSE Outlook
Today pivot is quite close for initial support at 7012.6 and I have a feeling this will hold for a rise unto the top of the Bianca 10 day at 7054. The 20 day is only marginally higher at 7063 so this area, if seen, could be good for a short going into the long weekend, as we may well see a dip at the end as positions are closed. There is resistance also at 7033 where we have one of the rising PRT channel lines, but with the wider line at 7054 this looks a better place to try a short. Below the pivot the next support is 7000 where we have the 200ema on the 30min, followed by 6986 and 6977, the latter being the bottom of that rising channel on the 30min and if it where to get that low, a decent long entry. It was pretty slow yesterday (and Wednesday in fact) so with these small ranging markets it feels like we are on the edge of a move, and if the S&P plays ball with a rise to 2140ish, it could well be a turn down from the 7050/7100 area. Bear in mind its a Friday before a bank holiday so might be a little weird!