Support 6120 6116 6102 6096
Resistance 6145 6156 6159 6169 6185 6193
Good morning.
Market Summary for Thursday 24th March 2016
The main driver for Thursday was the strengthening U.S. dollar after St Louis Fed President James Bullard said another U.S. interest rate hike “may not be far off.”
This knocked markets and drove down commodity and oil prices which tend to move in the opposite direction to the USD.
The mining sector dropped 1.9 percent and the oil and gas index dropped 2.1 percent as the prices of metals and oil weakened.
Additionally there was a rise in US crude stockpiles to another record so another downward pressure on the oil markets.
US & Asia Overnight from Bloomberg
- Yellen speech in focus after weak U.S. personal spending data
- Monday was slowest trading day on American exchanges this year
Asian stocks fell for the first time in three days as health-care companies led losses and more than two-thirds of the companies in Japan’s Topix index traded without the right to the next dividend.
The MSCI Asia Pacific Index slipped 0.4 percent to 127.55 as of 9:01 a.m. in Tokyo. The gauge is up 7.1 percent since the start of March, on course for the best month since October. The Topix slid 0.8 percent. Data Monday showed the Federal Reserve’s preferred measure of inflation slowed, clouding the outlook for higher interest rates in 2016. U.S. equity exchanges saw their slowest trading day of the year, while markets in Hong Kong and Australia reopen Tuesday.
“Much of Wall Street’s rebound, and indeed that of global markets, over the last five weeks has been driven by expectations for continued policy accommodation from the world’s central banks,” said Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $21 billion. “It is no surprise that the market rally is showing signs of fatigue. A weak recovery despite record stimulus remains a tough environment for risk markets.”
Clues on the trajectory of U.S. interest rates will come this week from reports due on employment, manufacturing, housing and consumer confidence. Fed Chair Janet Yellen is due to speak at an event hosted by the Economic Club of New York on Tuesday.
Spending Slows
A report Monday showed American personal spending barely increased in February and the prior month’s advance was revised down as consumers saved more of their incomes. A separate measure showed contracts to purchase previously owned homes rebounded more than forecast in February as sales picked up in most of the U.S. Data Friday showed the U.S. economy grew at a faster pace in the fourth quarter than previously estimated.
Some 1,505 of the 1931 companies in the Topix go ex-dividend on Tuesday, equating to a 13.2 point drag on the Japanese benchmark measure.
South Korea’s Kospi index rose 0.1 percent. Australia’s S&P/ASX 200 Index fell 0.7 percent, while New Zealand’s S&P/NZX 50 Index added 0.1 percent. Australia & New Zealand Banking Group Ltd. declined 2.1 percent, adding to a 5.2 percent slump on Thursday after its surprise warning of a blowout in bad-debt charges.
E-mini futures on the Standard & Poor’s 500 Index were little changed after the underlying gauge eked out a 0.1 percent gain on Monday, climbing for the first time in four days. About 5.2 billion shares changed hands on U.S. exchanges, the fewest since Dec. 30. [Bloomberg]
FTSE 100 Outlook and Prediction
Going to be a tough one to call in advance today after the long weekend, however, with the US open yesterday things remained relatively stable, and holding onto the rise on Thursday from that 6090 level. We have had a weak Australian session though and sometimes that can give a clue as to what the FTSE is going to do. In terms of levels, we have the daily pivot at 6145 and then support from the Bianca channels at 6116 and 6102 so the bulls will be keen to hold onto this area. We are still in this 6100/6200 range at the moment but the 30min chart looks a bit weak to start the day with a cluster of resistance levels around the 6150 area. Therefore I an thinking a short around this level for a run down to the 6116 Bianca level to start things off. We also have the 25ema on the daily at 6114 so whilst its not the first touch of that support level it could survive an initial test today. The S&P has still failed to break through the 2050 level, and if the bears start going for it they will need to break 2031 and 2020 for a test of 1990. Overall, I am feeling more bearish at the moment.