Good morning. Surprisingly bullish is how I would describe yesterday! My initial short didn’t work out, though the 6785 area we talked about in the trading room a lot, held as resistance, so was “scalpable” for a few bear points. Strange really as there was stil a lot of rhetoric regarding Crimea/Russia/Ukraine, we even had Obama talking about it during a press conference and sanctions are still being bandied about, though against individuals rather than Russia itself. I am watching 6595 for resistance today and if that breaks think we will get 6620 and possibly the top of the 20 day Bianca at 6699 (maybe not today though!). Support wise 6550 is the line in the sand, with the pivot slightly above at 6562.
Asia Overnight from Bloomberg
Asian stocks rebounded, with the the regional index rising from a five-week low, and nickel surged toward a bull market as investors weighed the impact of sanctions against Russia. Gold retreated a second day before the Federal Reserve begins discussing monetary policy today.
The MSCI Asia Pacific Index rose 0.5 percent by 3:17 p.m. in Tokyo, climbing from the lowest close since Feb. 7. Japan’s Topix index jumped 1 percent to snap a four-day rout. Standard & Poor’s 500 Index futures were little changed. Nickel climbed the most in two weeks as an export ban by Indonesia and the risk of further penalties for Russia’s actions in Ukraine raised supply concerns. Gold and silver slid at least 0.5 percent.
The U.S. and European Union imposed limited sanctions on some people linked to Russian efforts to annex Crimea, the Ukrainian territory that voted to join Russia in a disputed March 16 referendum. The Fed will press on with cuts to stimulus and switch to qualitative guidance for assessing rates, according to economists. Chinese property prices rose in 69 of 70 cities last month, data today showed amid reports a closely held real-estate developer collapsed with $567 million of debt.
“There will be some positive pass through into the Asian session from the gains in asset markets overnight,” said Mitul Kotecha, head of global markets research for Asia at Credit Agricole SA in Hong Kong, in an e-mailed note. “A degree of caution continues to be warranted given the still precarious situation in the Ukraine and ongoing tensions between Russia and the west. The reaction by the West in terms of sanctions was not seen to have a particularly detrimental impact on sentiment.”
Fed Survey
The Fed Open Market Committee will further scale back its stimulatory bond-buying program when its meeting concludes March 19, reducing purchases by $10 billion for the third time, according to 54 economists surveyed by Bloomberg March 14-17. Policy makers will scrap a 6.5 percent unemployment-rate target in favor of a range of economic indicators, 76 percent of the economists said.
Russia
EU foreign ministers meeting in Brussels agreed to freeze assets and put visa travel bans on 10 Russian politicians, three military leaders, including Black Sea Fleet Commander Aleksandr Viktorovich Vitko, and eight Crimean politicians.
The U.S. imposed measures on three members of Putin’s inner circle and four Russian parliament and senate committee leaders Leonid Slutsky, Andrei Klishas, and Yelena Mizulina, and upper house Speaker Valentina Matviyenko, according to a White House statement.
Putin responded by recognizing the breakaway Black Sea region as a sovereign state while Western leaders warned that Russia would face added sanctions, including possibly on energy assets, if it moved deeper into Ukraine.
“Further provocations will achieve nothing, except to further isolate Russia and diminish its place in the world,” U.S. President Barack Obama said yesterday at the White House. The U.S. can “calibrate our response” based on whether Russia chooses “to escalate or to de-escalate the situation.”
FTSE Outlook
Bit of a shame that we didn’t get the dip initially yesterday as there was good support at 6475, so would have made a good swing low entry. Still if it was easy and that predictable eh!
For today there is support at 6550 and if that holds initially this morning I am thinking a run up to 6590 is possible. We still have a degree of uncertainty over Russia which never really helps things as we are in a more fundamentals trading rather than technical trading period. If the bulls were able to break that 6593 area then 6620 looks possible, the only thing stopping me from getting too bullish is the fact that we are at the top of the 10 day Raff and 10 day Bianca channels. It will be interesting to see if 6550 holds as if it breaks then 6490 is very likely.