Good morning. Nice to finally get some support levels holding, though it was the lowest one that really came good and get a couple of long trades make some points. 6712 held for a bit but the 6695 long was the better one. 6726 got stopped for -6. I ended up closing most of the long last night at 6725. Yellen confirmed the end of QE in October, leaving the path open for interest rates to be the main tool to control the economy.
Asia Overnight from Bloomberg
Asian stocks outside Japan rebounded from losses as China’s trade expanded, while the U.S. oil benchmark-contract slipped toward a record losing streak amid rising supplies. Indonesian stocks and the rupiah jumped after a presidential election.
The MSCI Asia Pacific excluding Japan Index, which dropped the most since April 25 yesterday, added 0.4 percent by 12:37 p.m. inTokyo. The Hang Seng Index added 0.3 percent after a 1.6 percent plunge yesterday. West Texas Intermediate crude for August delivery lost 0.5 percent, a 10th decline that’s the longest slump since trading began in 1983. Standard & Poor’s 500 Index futuresfell 0.1 percent. The rupiah climbed and stocks in Jakarta hit the highest in a year as unofficial counts showed the city’s Governor Joko Widodo won the presidency.
Chinese exports rose a less-than-forecast 7.2 percent in June, while the trade surplus came in more than $5 billion below economists’ estimate of $36.95 billion, which would have been the highest since January 2009. U.S. data showed crude supplies rose last week, while demand for gasoline ebbed, exacerbating declines in oil fueled by waning concern over the Iraq conflict and signs Libya will boost shipments. The Bank of Englanddecides rates before a U.S. jobless claims report.
“Extreme cautiousness towards China’s economy has receded overall, with the government showing signs it will step in to support growth when needed,” said Mari Oshidari, a Hong Kong-based strategist at Okasan Securities Group Inc.
China Data
China’s overseas shipments fell short of the 10.4 percent expansion that was the median of 47 economists’ estimates compiled by Bloomberg. Imports grew by 5.5 percent in June, also falling short of the 6 percent increase projected. The trade surplus fell to $31.6 billion for June, from $35.92 in May. Data yesterday showed producer prices fell last month at the slowest pace in more than two years.
Economic growth is still too weak in China to halt intervention in the yuan and capital flows aren’t steady enough to warrant changes to the way the currency is managed, Lou Jiwei, the country’s finance minister, told reporters yesterday in Beijing amid economic talks with the U.S. Treasury Secretary Jacob J. Lew said moving to a market-determined yuan exchange rate will be a “crucial step” in helping drive China’s growth.
USA
In the U.S. yesterday, minutes of the Federal Reserve’s June 17-18 meeting showed policy makers were concerned investors were becoming too complacent over the economic outlook and risk taking.
While policy makers agreed their asset-purchase program would end with a final cut of $15 billion at their October meeting should the economy progress as expected, they noted that “monetary policy needed to continue to promote the favorable financial conditions required to support the economic expansion.”
The S&P 500 (SPX) rose for the first day this week, closing at 1,972.83, while yields on two-year Treasury notes dropped three basis points, or 0.03 percentage point, to a one-week low of 0.48 percent in New York.
FTSE Outlook
After dipping to the bottom support at 6696 we did manage a bit of a bounce – the first time this week support has seen some action! Been a very frustrating week this one, with trending days galore! The FTSE needs to rise above 6747 for any sort of further upside. Prior to that we have resistance at 6724 and 6732.If 6747 isn’t broken today then I think we are pretty much on a path to 6610 over the next few sessions, IF 6691 breaks. Worth a short at 6747 today if it gets there with a tight stop in case it doesn’t break and we do get another leg down.
On a more bullish note, if 6747 does break then we should be on for a rise to 6777 and 6800. Can the bulls pull the rabbit out the hat today and break that resistance? The Bianca channel bottoms haven’t moved too much lower since yesterdays levels, sitting at 6693 and 6699 today. 6690 also has both Raff channels at that level. We are also just above the daily pivot at 6717 as I write this, technically a weak bull sign, along with a very lacklustre EMA cross on the 30minute chart