Good morning, hope you had a good weekend. Fridays trade worked exceptionally well with the long from 6585, and well done if anyone held over the weekend – gained a few more since i closed (at 6614 as per email). Its looking fairly upbeat first thing this morning as I write this, however, that has created quite a few gaps which might well close first thing this morning. Key level initially for the FTSE is 6632 where we have resistance and in fact have dropped back from a bit overnight. Continuing the war theme after the Ukraine, North Korea has been live test firing missiles, though the Russia situation has calmed down a bit. News out of Japan showed an unexpected slow down in industrial production. Yellen is speaking later today, and traders will be awaiting payroll data later this month. As we are nearing the UK tax year there are some who will be putting money into ISAs so as I mentioned the other day I expect share prices to remain attractive for the S&S ISA money, for the moment. No sharp sell offs just yet.
Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index heading for its fourth straight daily gain, as consumer shares led advances.
The MSCI Asia Pacific Index climbed 0.5 percent to 137.40 as of 12:36 p.m. in Tokyo with about five shares rising for every three that fell. The gauge lost 0.8 percent this month and 3.3 percent this year through last week as investors weighed the crisis in Ukraine, with stocks in Japan and Hong Kong declining the most among developed markets. Federal Reserve Chair Janet Yellen speaks in Chicago today as investors await payrolls data due later in the week to assess the outlook for U.S. interest rates.
“Shares have rebounded a bit recently after falling too much due to the Ukraine situation,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which manages about 11 trillion yen ($107 billion) in assets. “Things haven’t deteriorated further, giving a sense of relief to the market.”
Regional Gauges
Japan’s Topix (TPX) index added 0.6 percent as the yen held last week’s losses versus the dollar with Mazda advancing 4.1 percent to 457 yen. Data showed Japanese industrial production unexpectedly fell 2.3 percent in February from January. A three percentage-point sales-tax increase takes effect in the country tomorrow.
South Korea’s Kospi index fell 0.3 percent. North Korea said it may conduct a “new form” of nuclear test if the U.S. challenges its efforts to enhance deterrence through military drills. Australia’s S&P/ASX 200 Index rose 0.8 percent and New Zealand’s NZX 50 Index slid 0.1 percent. Taiwan’s Taiex index rose 0.1 percent andSingapore’s Straits Times Index added 0.6 percent.
Hong Kong’s Hang Seng Index and the Hang Seng China Enterprises Index of mainland shares traded in the city both rose 0.1 percent, while the Shanghai Composite Index was little changed.
US Futures
Futures on the Standard & Poor’s 500 Index rose 0.3 percent today. The measure gained 0.5 percent on March 28 as consumer shares rebounded amid data showing household purchases, which account for almost 70 percent of the U.S. economy, rose in February by the most in three months.
China Manufacturing
An official purchasing managers’ index of Chinese manufacturing due tomorrow is estimated to drop to 50.1 for March from 50.2 in February, a Bloomberg survey of economists shows. Levels above 50 indicate expansion. HSBC Holdings Plc and Markit Economics Ltd. also release the final reading on their China manufacturing PMI for March tomorrow, after preliminary numbers signaled a third month of contraction in the sector.
China is expected to roll out specific growth-supportive policies, analysts led by Lu Ting at Bank of America Corp. wrote in a note dated March 28, after Premier Li Keqiang said the nation can’t ignore “difficulties and risks” from increasing downward pressure. The official expansion target for this year is 7.5 percent, although investment banks including Goldman Sachs Group Inc. and UBS AG have projected lower growth.
FTSE Outlook
The bullish run that we rode on Friday from the 6685 area has continued without any major upsets news wise over the weekend, however we are testing the resistance at 6632 now. With some gaps formed since Fridays close i expect that we may get an initial dip from this area, to around the bottom of the 30 minute channel and the pivot area at 6606. However, if that level breaks then 6685 and 6563 are the next supports, the 85 one more than likely to get hit. That is the level that held on Friday so would set ups 2 day double bottom. As I mentioned above, there is likely to be some ISA money coming in this week before the tax tar ends on Saturday. However, we do have Yellen speaking later today, last time causing the market to drop – so if we have risen tot he resistance area at 6648 but that time then it might be worth a short then.