Good morning. Nice rise to the 6798 and then the drop off yesterday that all played out well (finally!). The bulls managed to keep it fairly buoyant really, with 6770 holding overnight. Friday 13th today will bring out the superstitious lot so bear that in mind, though statistically I don’t think it has much bearing. The rise yesterday was once again due to interest rates, this time the case for not raising them sooner as retail sales came in below expectations. Still looks relatively bullish, so I am still expecting a test of the 6845 area where we have the 25ema on the daily and the top of the 10 day Bianca channel.
US & Asia Overnight from Bloomberg
(Bloomberg) — Asian stocks rose, following a rebound in U.S. shares, after an unexpected drop in American retail sales strengthened the case for keeping interest rates lower for longer in the world’s largest economy.
The MSCI Asia Pacific Index advanced 0.1 percent to 144 as of 9:01 a.m. in Tokyo, paring this week’s decline to 1 percent. Rate bets were tempered Thursday after retail sales slipped for a third straight month. The Standard & Poor’s 500 Index jumped 1.3 percent after faltering earlier this week as a better-than-forecast U.S. jobs report raised concern the Federal Reserve will increase rates sooner than some expected.
U.S. retail sales data “provide the Fed with a well-rounded view of the prospects for the U.S. economy and may prompt a desire to wait until fresh data is released which is not impacted by distortions,” said Matthew Sherwood, the Sydney-based head of investment markets research at Perpetual Ltd., which manages about $21 billion. “There’s better value and opportunity in other parts of the global share market.”
Japan’s Topix index added 0.3 percent. South Korea’s Kospi index advanced 0.9 percent and Australia’s S&P/ASX 200 Index slid 0.3 percent. New Zealand’s NZX 50 Index gained 0.3 percent.
Futures on the Standard & Poor’s 500 Index added 0.1 percent. U.S. retail sales dropped 0.6 percent in February from the previous month. Economists surveyed by Bloomberg had expected a 0.3 percent gain.
Fed funds futures put the odds of a U.S. rate increase in September at 53 percent on Thursday, down from 56 percent on Wednesday, though still above the 49 percent priced in March 5, the day before the February payrolls report.
Futures contracts on Hong Kong’s Hang Seng Index rose 0.3 percent, while contracts on the Hang Seng China Enterprises Index of mainland firms listed in the city advanced 0.5 percent. Singapore-traded futures on the FTSE China A50 Index climbed 0.6 percent. [Ref]
FTSE Outlook
Friday 13th so could be all over the shop! Daily pivot is 6761 so we have initial support there and I am still looking at the 6840 area for a swing short position. 6840 is the top of the 10 day Bianca channel, and also 6844 is the 25ema on the daily, so would be the first touch of that moving average line after the cross to bear. If beget that high today then worth a short here. I have plotted a fairly bullish day in the end as I think the bears would have driven it lower off 6798 yesterday if they were still going for it, as such, if the pivot holds then we should retest 6800. Below the pivot sees some support at yesterday low of 6750, with 6712 the next support below that and maybe worth a long here if seen. Below this then 6670 and 6625 come into play. Though I have plotted a bullish play for today I am still favouring a bearish stance, mainly as the daily Raffs and Bianca channels are heading down and we have bearish EMAs on the daily. Still expect a dip to 6500.
Resistance today is at 6790 (200ema on 30min) then 6800, with the 6840/6844 above that. If it were to break that (don’t think it will) then 6900 and 6961 are the levels higher up.