Quote from Nick on 1st April 2021, 9:22 am

FTSE 100 live outlook prediction analysis for 1st April 2021

A stronger pound helped to push London equities into the red on Wednesday to end the month on a subdued note, while sentiment dampened over the prospects of further lockdowns.

Fresh economic data showed Britain’s economy shrank by the most in more than three centuries in 2020, despite growing faster than previously thought in the final three months of last year. House prices, meanwhile, grew less than expected in March, according to lender Nationwide.

But investors looked past the figures and honed in on this month’s planned reopening of shops in England as lockdown restrictions gradually ease in England, sending the pound up 0.4pc against the US dollar to $1.379, and up 0.3pc against the euro.

Equities typically moved in the opposite direction, with the FTSE 100shedding a slight 58.49 points to 6,713.63 and the mid-cap FTSE 250sinking 55.73 points to 21,518.71.

Helping to drag markets was an increase in coronavirus cases across Europe, which is already lacking progress on its vaccination rollout, as well as expectations of further lockdowns – particularly in France.

Meanwhile all eyes were on Deliveroo’s highly anticipated float – the biggest in the decade – which slumped on opening and closed 26pc lower at 287.45p.

Bidenomics

U.S. President Joe Biden presented a $2.25 trillion U.S. infrastructure planon Wednesday, promising to “bring everybody along” at the unveiling in Pittsburgh. The “American Jobs Plan” lays out an eight-year program that includes $620 billion for transportation and $650 billion for initiatives such as cleaner water and high-speed broadband. Biden’s plan would also allocate $580 billion to American manufacturing. The plan is focused on addressing inequalities, but will face fierce opposition from Republicans, especially over its proposal to pay for the package with tax increases. Meanwhile, the U.S. Trade Representative raised concern about some of China's economic policy tools in its 2021 estimate report on foreign-trade barriers. “Made in China 2025,” a key 10-year plan released in 2015, includes a wide array of state intervention and support that restricts and discriminates against foreign enterprises, USTR said.

Firmer Stocks

Asia stocks are set for a firmer open after gains in U.S. equities as traders assessed Biden’s infrastructure plan. Futures climbed in Japan, Australia and Hong Kong. Ten-year Treasury yields resumed their rise, leading the Bloomberg Barclays index tracking U.S. government bonds to its worst quarter since 1980. Oil fell as talks ahead of a meeting of OPEC and its allies gave no signal of output plans. A slight pullback in the dollar left its best quarter in a year intact.[Bloomberg]

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US & Asia Overnight from Bloomberg

Stocks rose Thursday and U.S. equity futures were steady as the global recovery and President Joe Biden’s infrastructure plan helped traders look past escalating curbs from Covid-19 flareups. Bonds trimmed losses.

A gauge of Asia-Pacific shares was set for its first climb in three days, with Hong Kong leading gains, after data signaled regional manufacturing picked up. S&P 500 contracts were little changed while Nasdaq 100 and European futures edged up. The tech-heavy U.S. index rallied overnight, beating the S&P 500.

Ten-year Treasury yields dipped after sealing the worst quarterly performance since 1980 for the Bloomberg Barclays index tracking U.S. government bonds. Oil gained ahead of a high-stakes OPEC+ meeting that will debate whether to extend supply curbs. The dollar ticked higher.

Traders monitored halts in a number of Hong Kong-listed stocks, with some attributing the move to their failure to report earnings in time.

Biden’s $2.25 trillion infrastructure plan outlined Wednesday appeared to provide a more modest boost to sentiment than some expected. The goal of funding it with higher corporate taxes and the prospect of resistance to the overall initiative in Congress tempered the response. In Asia, manufacturing picked up after the volatile Lunar New Year period, reflecting a sustained revival in goods production.

FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis

Last day of the shortened week and also the start of the new month so we may well see an initial kick up first thing for the new month money. The S&P500 is tantalisingly close to the 4000 level so today may well see a push for that, and towards the fib level at 4004. The bulls will be quite gutted that they only managed 3995 yesterday!

If we do get an initial rise then the FTSE should well head for the 6779 R1 levels and we also have a key fib just above at 6787. Interestingly the 2 hour chart is bearish with resistance at the 6770 level also so we could well see a stutter in this area and a drop back towards the 8am open price, and probably the daily pivot at 6745.

If the bulls push past 6790 though then 6815 is the next level of note, and then R2 at 6823, though that feels a bit of a big ask to get that high ahead of a 4 day break. We will more than likely see some money being taken off the table later on today, so a rise and dip scenario similar to yesterday looks likely.

Initially we have support at this 6720 area where we have stayed overnight, and below this S1 is 6701. We also have the key fib at 6695 just below that so the bulls will likely be keen to defend that (and 3975 on the S&P). However if we were to see a break below 6690 then a slide further down towards 6668 and possibly even 6650 where have the bottom of the 10 day Raff channel may well happen. Worth shorting a break of 6690 just in case.

So, looking at a rise and dip to play out today. Have a great long weekend and good luck today.

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