Good morning. Well apologies for yesterday, got that a little bit wrong as to the direction of the trending day! Unfortunately, whilst the charts were showing a bounce due from the bottom of those daily channels, the Russia/Crimea/Ukraine issue took centre stage and caused havoc with index prices. As such the longs all got stopped out but fortunately stops prevented anything too major. Rather than try and trade it in this instances I tend to just stand aside and let the dust settle.
Asia Overnight from Bloomberg
Asian stocks fell, with a regional gauge set for the biggest weekly slump since May 2012, while regional bond risk climbed and copper dropped on concern China’s economy is faltering. Wheat headed for a second weekly gain before Crimea votes on leaving Ukraine.
The MSCI Asia Pacific Index sank 2 percent by 3:06 p.m. in Tokyo, set for its lowest close since Feb. 7. A gauge of Chinese firms (HSCEI) inHong Kong fell more than 20 percent from a Dec. 2 high while Tencent Holdings Ltd. tumbled 4.9 percent after a report China’s central bank halted some forms of electronic payment. The Nikkei 225 Stock Average slid 3.3 percent as the yen headed for its biggest weekly advance since Jan. 24. The cost of insuring Asia-Pacific bonds from default jumped 4 basis points. Copper headed for its biggest weekly slump since April.
About $1.2 trillion was wiped from global stocks this week through yesterday as Chinese economic data missed estimates, overshadowing signs of improvement in the U.S. economy. The Black Sea region of Crimea votes March 16 on becoming independent or rejoining Russia, with the U.S. and Germany threatening Moscow with sanctions over its support for the secession. The U.K. reports trade data today and Russia’s central bank decides on monetary policy.
“There is very little doubt that the Chinese economy is going through a structural slowdown,” said Matthew Sherwood, who helps manage about $25 billion as the Sydney-based head of investment markets research at Perpetual Ltd. “Investors are voting with their money and decreasing their risk exposure after a pretty good six-week rally. They are increasing their exposure to riskless government bonds.”
Treasuries Rally
Treasuries rallied by the most since September this week, sending the yield on benchmark 10-year notes down by 14 basis points since March 7 to 2.64 percent. The Standard & Poor’s 500 Index erased its gain for the year yesterday. Futures (SPA) on the U.S. equity benchmark were little changed.
Worst Performer
“The concerns are overdone,” Tim Radford, a strategist at Rivkin Securities in Sydney, said by phone. “Markets had a pretty good run and people are taking some risk off the table.”
Japan’s Topix index dropped 3.2 percent, as all 33 industry groups retreated more than 2.4 percent for the week. The Nikkei 225 is the developed world’s worst performing major index in the days since March 7.
The yen is posting the biggest gain among the 16 major currencies this week, rising 1.4 percent versus the greenback. Japan’s currency, regarded by some investors as a safe haven, climbed 0.2 percent to 101.68 per dollar today, after climbing 0.9 percent in the previous session.
John Kerry
U.S. Secretary of State John Kerry warned Russia that the U.S. and Europe could take “very serious” steps should there be no sign of a resolution with Ukraine. Kerry, who told a Senate panel in Washington that “nobody doubts” Crimea will vote to leave Ukraine, will meet face-to-face with Russian Foreign Minister Sergei Lavrov in London today. Germany’s Chancellor Angela Merkelsaid Russia is risking “massive” political and economic damage by refusing to back down on Crimea.
FTSE Outlook
Well got that wrong yesterday, however we have the bottom of the Bianca 10 day channel at 6510 today so may see a bounce there if the political warmongering isn’t at the forefront of everything today.As such I think I will try a long there and see how it goes and as its Friday with everything up in the air, just that one trade in the plan!
We have the daily pivot for today at 6579 so I expect that may be initial resistance if there are any rises. After that 6602 has a fib pivot line.