Good morning. Well the bulls were out in force with the first support at 6820 holding in the end, and not managing to reach that 6803 level unfortunately. The bulls then ran things right up to 6900, with a close just below, fuelled by hope that Greece will resolve its impasse with creditors. As I mentioned yesterday I am sure they will. Meanwhile, UK inflation dropped to a record low. Prices, as measured by the consumer prices index (CPI), rose by just 0.3pc in the year to January, from 0.5pc in December, according to the Office for National Statistics (ONS). The FTSE now stands just 32 points from its closing record of 6,930.2, which was reached on the final trading day of 1999 at the height of the dotcom bubble. It is also nearing the intraday record of 6,950.6 touched in that same trading session more than 15 years ago. When everyone is greedy be fearful………
US & Asia Overnight from Bloomberg
(Bloomberg) — Japanese stocks climbed, extending the benchmark index’s more than seven-year high, while Asian bonds fell amid speculation Greece will resolve its impasse with creditors. Crude oil retreated and copper futures rose.
The Topix index gained 1.2 percent by 9:18 a.m. in Tokyo, rising a third day to fuel a 0.4 percent increase in the MSCI Asia Pacific Index. Standard & Poor’s 500 Index futures were little changed following the U.S. gauge’s advance to a record. Yields on Australian, New Zealand and Japanese 10-year debt climbed at least one basis point as gold held losses. Oil halted a three-day rally with data Thursday forecast to show U.S. crude stockpiles rose a sixth week. Copper futures added 0.2 percent after a rout in base metals, while platinum rallied.
The Bank of Japan reports on monetary policy Wednesday, and minutes of the Federal Reserve’s January meeting are due, with Asian markets from mainland China to South Korea closed for Lunar New Year holidays. Greek Prime Minister Alexis Tsipras’ government was said to be working on a request to extend the nation’s loan agreement by six months, after talks earlier this week with euro-area finance chiefs failed. Stocks in Shanghai went into the week-long holiday capping a seven-day surge.
“Most market participants assume that, unlike last time, even in the worst case scenario the problems in Greece won’t lead to a breakdown in the European financial system,” Hiroichi Nishi, an equities manager at SMBC Nikko Securities Inc. in Tokyo, said by phone. “These assumptions are already being priced into the market.” [Ref]
FTSE Outlook
Looking at the Bianca channels we are currently around the top of the 10 day, having nudged above it yesterday, at 6907, with the top of the 20 day not far away at 6937 – a level that is probably worth a short from. The bottom of the 10 day is at 6818 and the 20 day at 6805, so there isn’t a massive range currently with those channels, so I expect we will see a break out one way or the other soon to widen them up again. I wouldn’t be surprised if we see a bit of a dip soon, as we are probably experiencing a bit of buy the rumour, sell the news taking place. Initial support today is at the pivot at 6880, with 6870 below that. If the bulls can break 6915 then I expect we will get the top of that 20 day at 6937. Above that is 6973 – top of the 20 day Raff, with the 10 day at 6944.