Good morning. Well that dropped at the open as expected, but then never stopped for the most of the day. Long off the pivot got scuppered too unfortunately, and it was the 6765 level that eventually saw some support come in and a bit of a climb back above 6800. All quite surprising as the S&P was relatively strong yesterday and is only just below 2000. Could have been a ruse to trap some bears (bear trap) and we now get a rise. We also have another YouGov poll out regarding the Scottish vote, FTSE rose as the No vote is int he lead this time, 52-48. Will that rise continue today?
Asia Overnight from Bloomberg
The dollar headed for its biggest weekly gain versus major peers since November and precious metals retreated as investors assessed the U.S.-rates outlook before the Federal Reserve meets next week. Asian stocks slipped after Chinese lending data as wheat dropped.
The Bloomberg Dollar Spot Index climbed less than 0.1 percent by 2:09 p.m. in Tokyo, with the yen at an almost six-year low versus the greenback. Gold retreated 0.6 percent, heading for its biggest weekly drop since May, and silver plunged 1 percent. The MSCI Asia Pacific Index (MXAP) lost 0.4 percent, set for its longest losing streak in four years. Standard & Poor’s 500 Index futures were little changed. Wheat was near its lowest price since 2010.
The U.S. currency has rallied the last four weeks as U.S. economic reports spurred speculation the Fed will raise interest rates sooner than previously estimated. China’s aggregate financing and money-supply growth missed estimates, while 702.5 billion yuan ($114.5 billion) of new loans were extended in August, close to the 700 billion estimate of economists. Reports on industrial production and retail sales are due tomorrow. Euro-area industrial output is also due, as the latest round of sanctions against Russia take effect.
“There has been quite a significant shift in terms of interest-rate expectations in the U.S.,” said Mitul Kotecha, the Singapore-based head of Asia-Pacific foreign-exchange strategy at Barclays Plc. “Higher U.S. yields combined with the relative outperformance of U.S. data is helping to propel the dollar forward. There’s a real contrast now between expectations of U.S. monetary policy and Europe and Japan.”
Hang Seng
The China data come after figures yesterday showed consumer-price growth slowed more than economists expected in August and producer prices dropped 1.2 percent, exceeding the 1.1 percent decrease predicted by analysts.
The Hang Seng Index (HSI) slid 0.4 percent and the Hang Seng China Enterprises Index of Chinese companies listed in hong Kong retreated 0.3 percent. Volume was about 13 percent less than the 30-day average for the time of day on Hong Kong’s benchmark index.
Gold slipped to $1,233.95 an ounce in a third day of declines. The metal has lost 2.7 percent this week and touched $1,232.33 today, its lowest intraday price since Jan. 23 on the spot market. Silver dropped to as low as $18.4675, the lowest intraday price since June 28, 2013, while platinum and palladium fell at least 0.4 percent today.
President Barack Obama has pledged more air strikes against the Islamic State extremists that have spread from Syria into Iraq, and said the U.S. would join the European Union in imposing more sanctions on Russia for its support of separatists in Ukraine. Oil rallied yesterday on the measures, helping the S&P 500 to erase a drop of as much as 0.5 percent.
FTSE Outlook
Todays pivot is 6807 so there may be initial support there, though the bottom of the Bianca channel js 6784 for today. There is initial resistance today at 6818, the bulls will need to break that to target 6830 and 6874 which are the 2 main resistance areas coming up; coupled with the top of the 30 minute channel at 6845ish. For today I can see an initial dip but then a rise again – the S&P looks like it wants to push on, and if that 1986 was the low then could well be on the way to 2020 or slightly more. Still have a buy the sdip stance at the moment, just yesterdays dip was overdone!
I have plotted the arrows dipping to the bottom of that 10 day Bianca channel but it might only get to the pivot at 6807 (also 25ema on daily at 6804) before climbing. 30 minute EMAs are currently weakly positive.