Good morning. I hope you had a good weekend. Fairly bearish on Friday with that little bit of a rally after the bell but nothing really to write home about. It will be an interesting open today to see if the daily pivot at 6968 holds for any initial bullishness, the open could set the tone for the week and how we close out the month and also the end of Q1. The FTSE certainly feels a bit nervous at the moment, which could be a result of the looming election.I remain slightly optimistic for the moment and expecting a bit of a bounce, maybe from the bottom of the 20 day Raff at 6820 though (also the 10 day Bianca at 6822). Fairly quiet on the news front over the weekend, the repercussions from the plane crash, a bit about Greece and an earthquake off the coast of Papua New Guinea.
US & Asia Overnight from Bloomberg
(Bloomberg) — Asian stocks fell for a third day, trimming the biggest quarterly advance for the regional benchmark index since 2013, as energy and material shares led declines.
The MSCI Asia Pacific Index lost 0.3 percent to 146.2 as of 9:05 a.m. in Tokyo, paring its climb since Dec. 31 to 6 percent. Gains in global equities pushed valuations last week to the highest in five years, with markets in China, Japan and Europe poised for rallies of more than 10 percent in the first quarter.
“We are moving to the sidelines,” said Stewart Richardson, chief investment officer at RMG Wealth Management LLP in London. “We will be looking to buy into a reasonable correction. The main equity indexes are looking tired.”
Japan’s Topix index slipped 0.1 percent. South Korea’s Kospi index added 0.3 percent, and New Zealand’s NZX 50 Index fell 0.3 percent.
Australia’s S&P/ASX 200 Index slid 1.2 percent. Caltex Australia Ltd. led declines, slumping 9.7 percent after Chevron Corp. sold a 50 percent stake in the nation’s largest fuel supplier.
Futures on the FTSE China A50 Index lost 0.4 percent in Singapore. Markets in mainland China and Hong Kong are yet to open.
People’s Bank of China Governor Zhou Xiaochuan said in remarks at the Boao Forum for Asia that the nation’s growth rate has fallen “a bit” too much and that policy makers have scope to respond, underscoring forecasts for further monetary easing in the world’s second-largest economy.
A gauge of China manufacturing slid to an 11-month low in March, a private report showed last week. Economists surveyed by Bloomberg News expect the PBOC will lower both benchmark lending rates and banks’ required reserve ratios, adding to cuts made in recent months.
U.S. Futures
E-mini futures on the Standard & Poor’s 500 Index lost less than 0.1 percent. The underlying U.S. equity gauge capped a 2.2 percent weekly slide on Friday amid concern the stronger dollar will curb corporate profits for overseas earners.
Federal Reserve Chair Janet Yellen said Friday that she expects rates to be raised this year and that subsequent increases will be gradual without following a predictable path. [Ref]
FTSE Outlook
Looking at the 30minute chart for today we have had a cross over on the EMAs to a bullish mode, with the bounce from the 6840 low area on Friday. There is/was a bit of resistance at 6880 and the bulls will need to break this to push up to the 6910 area where there is the next resistance as the top of the falling 30minute channel (and also slightly past at 6917), followed by 6936 where we have the 200ema on the 30 minute. Above this sees 6960, with a move holding above 6950 good for the bulls and further rises. The daily EMAs haven’t actually crossed to bear as yet, though the S&P has, and has resistance at 2077, which would drag the FTSE down with it if it fell back from there.
The daily pivot today is 6868 so if this holds first thing then I expect we could be on for a bullish morning. We also have the 30 minute coral at 6860 to act as support. Below this then the next support is 6838 and then the 10 day Bianca at 6822,and the 20 day Raff at 6820 – a level thats worth a long. I’d panic if it broke 6795 though as if that goes we could be heading a lot lower, so we may find some support from the bulls here if all the others levels break.