Good morning. I hope you had a good weekend. As per usual “bad” news on Friday with US durable goods orders coming in below expectations saw US indices push higher, with he S&P rising towards the next resistance level at 2123. The reason being that interest rates will probably stay longer for lower if data doesn’t support a rise. Greece continues to rumble on, with a variation of will they/won’t they default, leave etc. Another natural disaster, this time in Nepal with the earthquake, left thousands dead but the international community rallying round. That was the main news, bit of election bits and pieces thrown in, with it still looking like it could be anyones (or a mash up of a couple!). HSBC put their cards on the table about relocating the HQ from London to HK, which saw their share price up 5% in HK today.
US & Asia Overnight from Bloomberg
Asian stocks outside Japan advanced for a fifth day amid speculation that central banks from China to the U.S. will maintain support for economic growth. The Taiwan dollar jumped the most in 15 years, while corn retreated.
The MSCI Asia Pacific excluding Japan Index added 0.4 percent by 1:43 p.m. in Tokyo, as the the biggest jump by HSBC Holdings Plc since 2011 propelled the Hang Seng Index to a 1.3 percent gain. Futures on U.S. equity-indexes were little changed after records last week. Taiwan’s dollar surged 1.6 percent versus the greenback. The euro was steady after gaining Friday even as talks on aid for Greece ended in acrimony. Corn futures dropped 0.5 percent.
Investors are awaiting a Federal Reserve meeting this week for more clues as to the timing of interest-rate increases after a surprise drop in capital-goods orders. The Bank of Japan decides policy Thursday, while China’s interest-rate swaps fell to a 33-month low as investors bet the central bank will keep borrowing costs low. Apple Inc. reports earnings Monday after better-than-forecast results helped push U.S. stock indexes to records last week.
“Markets are going to move higher until we get some news that stops them,” Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “The reporting season in the U.S. so far looks OK. There’s not been any show stoppers yet. Greece has the potential to put things on hold.”
HSBC Jumps
Hong Kong’s benchmark stock gauge jumped as HSBC surged 5.2 percent after the Sunday Times reported Europe’s largest lender is considering the spinoff of its British retail bank and executives pledged to review the company’s domicile. HSBC’s two-day gain is the biggest since 2009 on a closing basis.
The Hang Seng China Enterprises Index of mainland companies listed in the city added 0.9 percent after its first weekly retreat since March. The Shanghai Composite Index climbed 1.9 percent after regulators said they would step up policing of market manipulation and insider dealing.
BHP Billiton Ltd. climbed 2.1 percent in Sydney, the biggest support to Australia’s benchmark index, after iron ore entered a bull market. The world’s biggest mining company is up 7.9 percent in three days.
Indonesia’s Jakarta Composite Index plunged 2.4 percent, the most since October, as all nine industry groups retreated. Agricultural stocks led declines, with PT Astra Agro Lestari plunging 8.9 percent after first-quarter earnings plummeted.
“Investors are adjusting to the reality that the economy is really slowing down,” Jeffrosenberg Tan, fund manager at Sinarmas Asset Management, said in an interview. “All these rallies to record highs were overdone.”
BOJ Speculation
Japan’s Nikkei 225 Stock Average slipped 0.3 percent after closing above the 20,000 level for the first time since 2000 last week. The yen was little changed at 119.04 per dollar.
Speculation that BOJ Governor Haruhiko Kuroda will seek more action has driven a rally in sovereign bonds that cut the two-year yield to minus 0.02 percent on April 24. At the same time net yen shorts, or bearish bets on the Japanese currency, decreased to 14,448 in the week to April 21, the least since October 2012, according to Commodity Futures Trading Commission data.
Taiwan’s currency strengthened to 30.570 per U.S. dollar, set for biggest advance since January 2000 on a closing basis. Global funds bought a net $1.5 billion in local equities on Friday, biggest one-day purchases since 2008, amid speculation the island will broaden access for Chinese investors.
Dollar Weakness
The Bloomberg Dollar Spot Index held near its lowest level in seven weeks. The greenback fell against most of its major peers last week as orders of durable goods, manufacturing, and new home sales all came in weaker-than-projected. Fed officials will decide on monetary policy the same day a report is projected to first-quarter economic growth slowed.
E-mini futures on the Standard & Poor’s 500 Index were little changed after the underlying measure gained 0.2 percent to a record on Friday. Nasdaq 100 Index contracts were little changed after earnings from Microsoft Corp., International Business Machines Corp. and Amazon.com Inc. helped the Nasdaq Composite Index power past a 15-year record.
“Friday’s U.S. durable goods orders report was sufficiently weak to power U.S. stock indices to new record highs, such was the ‘‘zero for longer’’ interpretation of the data,” Ray Attrill, global co-head of foreign-exchange strategy at National Australia Bank Ltd. in Sydney, wrote in a note Monday.
Apple will probably show on Monday that earnings jumped by more than 20 percent when it reports results for the second fiscal quarter, which ended in March. While Apple doesn’t break out shipments by country, the world’s biggest company may have sold 18 million to 20 million iPhones in greater China during the period. [Ref]
FTSE Outlook
Initially we have support at the daily pivot at 7071, and also the 25ema there not he 30minute chart. First thing Monday morning can be choppy, but if that area holds then we should be on for a bounce back up to the top of the 10 day Bianca at 7096, and also Fridays high at 7103. Resistance above this level is 7132 where we have the top of the 10 day Raff, and at the moment the charts still look bullish, albeit slightly weaker as they have levelled off around this 7100 area. Above 7132 and we start looking at 7161 (PRT resistance line) and 7192 (top of 50 day Bianca). Below the pivot we have support at 7055 today, then 7040, 7022 and then the bottom of both the 10 & 20 Bianca channels at 6994 – an area that should therefore be fairly decent support. 7055 is the 200ema on the 30minute and looks pretty decent support for any drops from the 7100 area.
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