Support 6142 6120 6112 6057 6018 5998
Resistance 6179 6181 6201 6210
Market Summary for 3rd March
It was a day mainly of consolidation with the FT100 finishing little changed. The short from 6172 worked well, and did in fact run to the 6110 target in the end too, though it looked like it wasn’t going to drop for a while when the order first took!
The range was roughly 6110-6175 which is relatively small compared with previous sessions.
One of the underperforming sectors was healthcare after credit rating agency Moody’s cut its outlook on the global pharmaceuticals industry.
The housebuider sector was also weak along with some consumer shares.
US & Asia Overnight from Bloomberg
- Gold retreats after entering bull market; Copper gains
- Yuan strengthens before annual meeting of legislature
Asian stocks and oil both rose to eight-week highs and emerging-market currencies strengthened ahead of key U.S. jobs data and the start of the Chinese national legislature’s annual gathering.
The MSCI Asia Pacific Index of shares and crude were both headed for weekly gains of more than 5 percent. A Bloomberg gauge of developing nation’s currencies climbed for a fifth day as Indonesia’s rupiah advanced to a nine-month high. China’s yuan strengthened the most in two weeks after the central bank raised its daily fixing. Gold fell 0.2 percent, after entering a bull market on Thursday, and copper rose to the highest level since November.
Global equities have recouped more than half of this year’s losses since sinking to a 2 1/2-year low on Feb. 11 amid improving U.S. data and monetary stimulus in China. Friday’s report on U.S. nonfarm payrolls will give investors further insight into the health of the world’s biggest economy and the likelihood of further interest-rate hikes by the Federal Reserve, while China will announce its plans to revive growth when an annual meeting of the National People’s Congress gets under way on Saturday.
“U.S. data continues to shine, oil continues to firm and risk appetite is coming back into all aspects of the markets,” said Angus Nicholson, market analyst at IG Ltd. in Melbourne. “Expectations will be quite high for an announcement of significant further fiscal spending from China’s National Party Congress.”
The American jobs data is forecast to show hiring picked up in February while wage gains slowed from the fastest pace in a year. Fed funds futures are pricing in a less than one-in-10 chance of a rate increase at the end of the Fed’s next meeting on March 16, the probability of a boost by June is 35 percent, up from 24 percent a week ago.
Chinese Premier Li Keqiang is likely to confirm this weekend a shift in the monetary policy stance from “prudent” to “prudent with a slight easing bias,” says Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing. A fiscal deficit target for the year will also be set and Vice Finance Minister Zhu Guangyao has said it will be higher than the 2.3 percent goal announced for 2015.
Stocks
The MSCI Asia Pacific Index rose 0.3 percent as of 1:55 p.m. Tokyo time, headed for the highest close since Jan. 6. Japan’s Topix added 0.1 percent, poised for a weekly gain of 4.6 percent, and Hong Kong’s Hang Seng Index rallied 0.6 percent. The Shanghai Composite Index fell 0.5 percent.
BHP Billiton Ltd., the world’s biggest miner, rose 2.8 percent to a two-month high in Sydney, supported by rising raw-materials prices. Cnooc Ltd., China’s biggest offshore oil & gas company, climbed 2.1 percent to a three-month high in Hong Kong.
Futures on the Standard & Poor’s 500 Index were little changed, while contracts on the U.K.’s FTSE 100 Index climbed 0.6 percent. Brazil’s benchmark moved into a bull market last session, closing more than 20 percent up from its most recent low, amid speculation President Dilma Rousseff will be impeached.
Commodities
West Texas Intermediate crude rose 0.7 percent to $34.81 a barrel, extending this week’s advance to 6.2 percent. Key OPEC members intend to meet with other producers in Russia on March 20 to renew talks on an agreement to freeze output and there will be a “dramatic price movement” when that takes place, Nigerian Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu said Thursday.
Gold fell 0.2 percent on the spot market, after jumping 2 percent last session to its highest close in a month. Copper rallied 0.6 percent in London.
Currencies
The Bloomberg JPMorgan Asia Dollar Index, which tracks the region’s 10 most-used currencies excluding the yen, was set for its highest close in three weeks. South Korea’s won rose 0.7 percent versus the greenback, buoyed by about $1 billion of overseas money that flowed into the nation’s stocks this week. The rupiah strengthened as much as 0.8 percent. The dollar fell this week against all 31 major peers, including a 3.2 percent slide against Australia’s currency.
“There’s been a retracement in the dollar generally,” said Patrick Bennett, a strategist at Canadian Imperial Bank of Commerce in Hong Kong. “We’ve seen also that some portfolio flows have returned to Korea.”
The yuan strengthened 0.3 percent, climbing for a fourth day after the central bank boosted its reference rate by 0.2 percent. The nation’s currency and monetary policies will remain stable, People’s Bank of China Deputy Governor Yi Gang said in Beijing on Friday.
Bonds
Negative yields on Japanese bonds with maturities of up to a decade spurred demand for longer-term securities. The 20-year yield fell by as much as 4.5 basis points to a record 0.42 percent.
Bank of Japan Governor Haruhiko Kuroda said Friday that he’s not considering lowering the central bank’s benchmark interest rates deeper into negative territory at this time. The authority in January began charging commercial lenders on a share of the cash they park at the central bank.
Ten-year U.S. Treasuries yielded 1.83 percent, seven basis points more than at the end of last week. They were little changed on Friday. [Bloomberg]
FTSE 100 Outlook and Prediction
Its a big day in terms of news today with the NFP news out at 13:30 and the US unemployment rate at the same time, forecasts are 195k and 4.9% respectively. As such its likely to get a little lively around that time so bear that in mind. Being a Friday I tend to dial it down a bit as well so smaller stakes on the trades below in the plan. The video was well received so I will do that regularly and send it out via separate email. The FTSE 100 has stayed within the 6100 and 6200 levels pretty well, it did look like we were going to get some downside momentum going yesterday and break 6100 but it didn’t and its fought back again. Initial support today is at the pivot at 6142 (the live charts one is just below at 6137), so I think we may get an initial bounce from this area, probably up to R1 at 6180. There are a couple of other resistance levels here – a major PRT one, 100 Hull MA on 2 hour again, and a rising 30min channel top, so I think if we do hit this area then a short should play out well. Tight stops on all as per usual. If the bulls manage to break the 6180 area then it would be pretty likely we will see 6201 and this area is worth a short. Above this then the 10 day Bianca channel at 6283 is a possible upside target though I doubt we will see that today. Either way, it will need to break out of the 6100/6200 range soon, and I am favouring down to 6000 rather than up to 6250+