Good morning. After that initial rise yesterday morning that failed to dip quite low enough to trigger my ideal entry at 7046, we spent the rest of the day hovering around the 7100 area. Coiled spring anyone? Even the ECB press conference failed to get prices moving much, and you know its a quiet day when the main thing everyone talks about is a protestor leaping the stage during it! There has been a slew of not so good data recently and the markets have held up pretty well despite it, so pretty resilient and further upside to come? The European Central Bank said it remained committed to its full asset-buying programme to revive the euro zone economy.
US & Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark rebounding to it highest since May 2008, as materials companies and energy producers led gains.
The MSCI Asia Pacific Index added 0.7 percent to 153.70 as of 11:08 a.m. in Tokyo. The 14-day Relative Strength Index on the Asian regional index was at 75.8 today, trading for a seventh day above 70, a level some traders take as a signal stocks are poised to drop.
“A lot of funds having been underweight and hence will have to pay catch-up” with the recent gains in regional benchmarks, said Andrew Sullivan, head of sales trading at Haitong International Securities Group in Hong Kong. “Some people have been so bearish that they can’t believe things can turn positive.”
Hong Kong’s Hang Seng Index, among the world’s biggest advancers this month, added 0.2 percent. China’s Shanghai Composite Index rose 0.8 percent, taking its 12-month surge to 96 percent. Japan’s Topix index slid 0.1 percent.
New Zealand’s NZX 50 Index climbed 0.2 percent, and Australia’s S&P/ASX 200 Index rose 0.6 percent. South Korea’s Kospi index gained 0.4 percent,
The MSCI Asia Pacific Index halted a nine-day advance on Wednesday, its longest winning steak since December 2013, after data showed China’s economy posted the slowest economic growth in six years.
E-mini futures on the Standard & Poor’s 500 Index were little changed. The underlying gauge rose 0.5 percent on Wednesday in New York, to within 0.5 percent of its record, as Intel Corp. climbed and energy companies rallied with oil reaching a 2015 high.
U.S. Data
U.S. industrial output slipped more than economists had projected in March, with the Federal Reserve examining data to determine the best time to raise benchmark borrowing costs.
The central bank won’t move to raise rates until December, according to a Morgan Stanley index. A month ago, traders were pricing in an increase in September, the gauge showed.
Fed Chair Janet Yellen has said that while rates will probably rise this year, any decision depends on economic data, with recent releases missing projections by the most in six years. [Ref]
FTSE Outlook
The FTSE continues to hold up pretty well all things considered and that will probably be the case today. We have the bottom of the 10 day Bianca and the daily pivot at 7088/7087 respectively, so there is potentially pretty good support here, and a break of this would lead to the 200ema on the 30min at 7067 – which would be a good point for a bounce (or just above). Below this there is the bottom of the rising 30minute channel with support at 7055. If these support areas hold then I think we will break through this 7100 ceiling area on the next push and test the 7130 and the top of the 30 minute channel. The momentum is with the bulls at the moment, and the bottom of the daily 10 Raff (7076) and Bianca channels is likely to hold, generally speaking. If they break then a dip down to 6980 is going to be plan B.
Resistance wise, 7113 initially, being yesterdays high, then the 7130 area where we have the top of the 30 minute channel as mentioned. Above this 7160 and 7195 where we have the top of the 20 day Bianca channel. 7231 if it went bonkers for the top of the 10 day Bianca.