Good morning. Well not as many as wanted from the 6515 long yesterday and turned into a bit of a choppy day. FTSE certainly isn’t making it easy latter part of this week. There is still the potential for the 6560 level, though the Bianca channel has dropped a bit lower and both 10 and 20 day are today showing support at 6444. News flow was fairly upbeat yesterday, with most beating expectations.
Im watching 6560 for resistance initially, with support at 6536 (daily pivot initially).
Asia Overnight from Bloomberg
Asian stocks rose, with a regional index of shares outside Japan rebounding from the biggest loss yesterday since August.
The MSCI Asia Pacific excluding Japan Index advanced 0.7 percent to 452.10 as of 2 p.m. in Hong Kong, paring this week’s slide to 0.4 percent. The measure fell 1.7 percent yesterday, taking its loss this year to 4.1 percent as data from exports to industrial output showed signs of a slowdown in China and Federal Reserve Chair Janet Yellen indicated U.S. interest rates could rise as soon as six months after the end of the central bank’s bond-buying program. HSBC Holdings Plc and Markit Economics’ gauge of Chinese manufacturing is due March 24.
“The markets have a lot to digest with an unofficial U.S. rate rise potentially mid next year,” Tim Schroeders, a Melbourne-based money manager who helps oversee $1 billion in equities at Pengana Capital Ltd., said by phone. “You don’t want to stick your neck out too far. We’re not overly cautious, but respectful that the dynamics are changing. The focus is going to come back to China on Monday.”
China Manufacturing
The HSBC/Markit China manufacturing purchasing managers’ index will come in at 48.7 for this month from 48.5 in February, according to analysts surveyed by Bloomberg. Readings below 50 signal a contraction.
The China Beige Book survey, published by New York-based CBB International, signaled the nation’s economy slowed this quarter, with industries including retail and mining showing weaker revenue growth. Loans through non-traditional channels became more expensive, it said.
Yellen this week said the quantitative-easing program used to stimulate the U.S. economy would end this fall should the central bank continue to taper in measured steps. There will be “considerable time” between the end of the stimulus and the first rate increase, meaning “six months or that type of thing,” she said.
U.S. Futures
Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The U.S. equities gauge yesterday gained 0.6 percent, rebounding from its first decline in three days following Yellen’s comments.
Quarterly Fed forecasts showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1 percent by the end of 2015 and 2.25 percent a year later. Money market rates showed traders see a 62 percent chance of an rate increase by June 2015, up from 57 percent two days ago.
The Conference Board’s gauge of the U.S. economic outlook for the next three to six months climbed 0.5 percent in February, the biggest gain since November, data yesterday showed.
FTSE Outlook
Well that was quite a recovery in the afternoon on the FTSE yesterday, having dipped just below 6500. To be honest it looked like the bears were gaining the upper hand with that break of 6515 and we were going to see the 6465 area mentioned as a decent bounce point. Alas not, and it took off upwards. We are looking at opening around 6545 today, but have the daily pivot at 6536 so I expect initial support there.
Resistance wise, the bulls will need to break 6560 today, to then target the upper Bianca channel areas at 6594 and 6608. So, I am thinking an initial dip from around 6560 to 6536 then rise to 6600.