Good morning. Well that turned out well with the rise int he morning, though it stalled a lot more at the first resistance level of 6974 for a dip down to the support at 6924, and completely failed to get the 6990 area to test the top of the Bianca channels News out yesterday wasn’t too bad, with UK manufacturing factory output rising to a seven month high. Employment levels rose for the 22nd consecutive month in February, as stronger confidence fuelled an increase in domestic orders. The Markit/CIPS Purchasing Managers’ Index rose to 54.1 in February, from 53.1 in January. This was well above the 50 level that signals growth, and beat analysts’ estimates for a more modest rise to 53.3.
US & Asia Overnight from Bloomberg
(Bloomberg) — Asian stocks rose after U.S. equities climbed to records as rising consumer spending signaled strength in the world’s largest economy. Japanese shares gained after the yen weakened.
The MSCI Asia Pacific Index advanced 0.1 percent to 146.31 as of 9:02 a.m. in Tokyo. The Topix index added 0.4 percent. Both the Standard & Poor’s 500 Index and the Dow Jones Industrial Average rallied to all-time highs as data showed U.S. consumer purchases rose 0.3 percent in January, adjusted for inflation, adding to signs the recovery is on a strong footing as the Federal Reserve assesses inflation and jobs data to gauge the timeline for raising interest rates.
“The broad trend in shares is likely to remain up,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which manages about $118 billion. “Valuations, particularly against bonds, are good, economic growth is continuing, and monetary policy is set to remain easy with further easing in Europe, Japan, China and Australia and only a gradual tightening in the U.S.”
Japan’s Nikkei 225 Stock Average climbed 0.4 percent as the yen held Monday’s 0.4 percent loss to trade at 120.17 per dollar.
Trading of Sharp Corp. shares was halted pending clarification of a report in the Nikkei newspaper that the company will seek investment from its lenders, including a 150 billion yen ($1.25 billion) debt-for-equity swap. The suspension was lifted at 9:04 a.m. in Tokyo after Sharp said it wasn’t the source of the report and no decision was made on its restructuring. Shares dropped 7.1 percent to 136 yen.
South Korea’s Kospi index added 0.2 percent. New Zealand’s NZX 50 Index was little changed.
Australian Rates
Australia’s S&P/ASX 200 Index gained 0.3 percent. Most economists surveyed by Bloomberg News say the central bank will cut interest rates to 2 percent on Tuesday and hold borrowing costs unchanged for at least a year.
China’s leaders gather this week for an annual session of the national legislature where the Communist leadership typically unveils its goals for the year. Markets in China and Hong Kong are yet to open.
Futures on the S&P 500 were little changed today. The underlying gauge climbed 0.6 percent on Monday in New York, and the Nasdaq Composite Index breached 5,000 for the first time in 15 years. [Ref]
FTSE Outlook
Well the lower support at 6924 held very well yesterday so that is still the line in the sand for the bears to break to push lower. The bottom of the 10 day Bianca is at a slightly nearer 6936 this morning and we are just below the pivot. However, we kind of had a bit of a bearish Monday with the dip from the 6974 resistance, so we could be on for the usual pattern with bull Tuesday to follow. Resistance today is initially at yesterday high, 6974, then the top of the 10 day Bianca 6979, with the 20 day above that at 6994 – probably worth shorting both of those levels in case we get another meandering range day. Support below the 6924 is 6902 bottom of the 20 day Bianca, then 6891 below that. The 10 ema on the daily was the 6924 support yesterday, and has rebuffed numerous tests to break it – thats showing support at 6928 for today, so the upward trend is still in tact, slow rise that it is. I have put in an initial rise towards the 6979 area, then a dip back down and am expecting a small initial dip tot he 6936 (possibly 6924) area first. The S&P held its lower supports well yesterday at 2103, rising to test the 2115 resistance, , gains it has held overnight so I don’t think we will be too bearish today. However, the Greek situation rumbles on. Greece is preparing to tap its final pension reserves at the country’s central bank if needed to avert a devastating default to the International Monetary Fund and keep the government going over the next two weeks. The Greeks must pay the IMF €1.5bn in a series of deadlines this month, starting with €300m as soon as Friday.