Good morning. Big day today as we have the UK budget, UK jobs news then the Fed later, which everyone is looking at for clues on when interest rate rises might happen in the US. Does make the analysis a little tricker doing it in advance. They will be looking to see if the word “patient”” is dropped from the statement, if so its a hint that rates will rise sooner rather than later. Bit of a funny session from the FTSE yesterday, Nearly got the 6852 resistance on the initial push but the 6840 resistance area held for a drop to 6800, helped by the Dax selling off. Bounced at 6800 as the Dax hit its 200ema on 30minute at 11930 which pulled the FTSE up to test that 6852, a level that its hovered around ever since. There is a pretty decent 30min channel in play with support at 6836, around the pivot at 6832, and the top at nearly 6900, where we have the top of the 20 day Bianca. The budget should be a little bit generous today as pre-election ones are want to be, so we may see a rise today then a dip tomorrow. Bulls need to break 6862 to push to 6885 and 6900.
US & Asia Overnight from Bloomberg
(Bloomberg) — Asia’s benchmark equities gauge was little changed before a Federal Reserve meeting at which officials will assess the economy and debate the timing of the first U.S. interest-rate increase since 2006.
The MSCI Asia Pacific Index declined less than 0.1 percent to 144.80 as of 9:00 a.m. in Tokyo, ahead of the Fed’s interest rate decision and policy statement due Wednesday. The Fed is likely to remove an assurance from the statement that it will be “patient” before beginning to raise interest rates, opening the door to an increase as early as June, said Shane Oliver, Sydney-based global strategist at AMP Capital Investors Ltd.
“Markets are a bit nervous ahead of the meeting,” Oliver said by phone. “It’s possible that the market will be left none-the-wiser about whether the first rate hike will come in June or September, but we are undoubtedly getting closer.”
Japan’s Topix index added 0.1 percent. Data showed the nation’s exports rose more than economists predicted in February compared with the previous year, while imports unexpectedly declined.
South Korea’s Kospi index advanced 0.1 percent and Australia’s S&P/ASX 200 Index slid 0.4 percent. New Zealand’s NZX 50 Index retreated 0.5 percent.
Almost 90 percent of economists surveyed by Bloomberg predict Fed officials will drop the “patient” pledge from their statement to be released Wednesday. Some 45 percent saw this as a step toward a June increase in rates, which have been held near zero since December 2008, according to the poll of 49 respondents conducted March 12 and 13. Thirty-seven percent saw rates rising in September.
Trader Predictions
Most traders predict an increase by year-end. The odds of a boost by September are 55 percent, futures contracts show, down from 59 on March 6, the date a jobs report showed employers added more workers than forecast to payrolls. There’s a 63 percent chance of a rate increase by October, down from 69 percent on March 6, the data show. [Ref]
FTSE Outlook and Analysis
The initial resistance is 6862 today, which is the overnight high, and a move above this is likely to try for 6870, 6885 and possibly 6900. 6870 and 6900 are the top of the two Bianca channels, whilst 6885 is the top of the 20 day Raff. I have plotted a bit of a bullish day with the bottom of the 30min channel and pivot area holding around the 6835 area. Below this then support is 6821 and 6810. I think a short at the 6885/6900 area could be good too. Its going to be pretty choppy, especially this afternoon when the Fed announcement is made. We also have the divi being applied to FTSE trades today, forecasted to be 9.5 points. I am going to keep it fairly simple I think with the one long and the one short and see how it goes.