Good morning. Well Friday was interesting, had 6616 and 6606 as supports, set the order for the lower one but it bounce strongly from the other one instead. Frustrating! Anyway, that now sets the line in the sand for support at 6615 for today, and prices have held since that rise. Todays pivot is 6642 so got a bit of support there initially. The daily trends are all pretty firmly down across the FTSE, Dax and S&P, even gold is pretty lacklustre. Fairly quiet on the financial news front over the weekend, after the news last week that interest rates will probably rise sooner rather than later both in the UK and US. Kicking off in the Middle East again with the UK joining he ISIS striking force too, though the big news was Europe winning the Ryder Cup! Pro-democracy protests in Hong Kong have left street deserted today as week long protests take place.
Asia Overnight from Bloomberg
Asian stocks dropped, led by losses in Hong Kong amid pro-democracy protests in the city. The dollar extended gains and Standard & Poor’s 500 Index futures retreated as U.S. economic data bolstered the outlook for higher interest rates.
The Hang Seng Index lost 1.9 percent by 1:41 p.m. in Tokyo, erasing its gain for the yearand dragging the MSCI Asia Pacific Index toward a 0.7 percent decline. The Hong Kong dollar and Chinese yuan weakened as the Bloomberg Dollar Spot Index added 0.1 percent, climbing a seventh day. New Zealand’s currency is poised for its biggest three-day drop in three years. Oil in New York slipped 0.6 percent. S&P 500 futures fell 0.3 percent. Asian bond risk rose to a one-month high.
Hong Kong’s benchmark index tumbled as much as 2.5 percent after police used tear gas to disperse protesters ahead of national holidays this week that will close the city’s markets on Oct. 1 and Oct. 2. The U.S. economy grew at the fastest pace since 2011 in the second quarter, fueling speculation over Federal Reserve rate increases. Pacific Investment Management Co., whose co-founder Bill Grossdeparted last week, said it sees slower growth in China and downside risks in Australia.
“It’s going to spook some investors who are worried that this could drag out, affecting the business climate in Hong Kong,” Vasu Menon, vice president of wealth management at Oversea-Chinese Banking Corp., said on Bloomberg TV from Singapore. “It’s happening at a time when the U.S. Federal Reserve is talking about tightening monetary policy, a time when China is slowing down.”
USA
S&P 500 futures are signaling the U.S. equity benchmark may start the week lower after its biggest weekly loss in almost two months. The guage reached a record Sept. 18. Nasdaq 100 Index fell 0.2 percent.
The Fed mustn’t “fall behind the curve” as it weighs when to start raising interest rates, Dallas Fed President Richard Fisher said, citing strengthening U.S. growth and building wage-price pressures.
FTSE Outlook
Todays pivot is 6642, not far below where we currently are so there is initial support here, though Fridays low at 6616 is the line in the sand for the bulls, a move below this will target 6580, the bottom of the 10 day Bianca, with 6560 below that. 6580 might be worth a risky long if it were to get that low. Resistance wise, we have the 200ema on the 30min at 6685 area [corrected figure from earlier email], so I think that we will see a rise to this today, continuing the strength from Friday, before stuttering there. Should that level break then 6710, 6724, 6747, 6773 are all resistance levels – 6710 being the strongest. I have put in an early rise, dip to the pivot then a rise towards that 6710 towards the end of the day. At the moment the 10minute chart also shows channel support at 6642.