Good morning. Well it got 6804 in the end but it took all day, so we were right to be bullish from that 6750 area. Having hit the 6804, the short order took but it hasn’t dropped much since – showing a bit of strength once again. 6821 is the main resistance for today and if the bulls break that then 6900 and higher beckons. Will they get that 7000 soon? The US also gained well but dropped back from its all time highs, and we have Independence day holiday on Friday, and usually get some bull around that period, though with NFP on Thursday it could be interesting!
Asia Overnight from Bloomberg
Asian stocks climbed, with the regional index at a six-year high, and credit risk in the region fell as expanding manufacturing in the largest economies buoys the global outlook.Australia’s dollar dropped after worse-than-estimated trade data, while platinum and copper slid.
The MSCI Asia Pacific Index rose 0.6 percent by 2:16 p.m. in Tokyo, trading at the highest level since June 10, 2008, as most major regional indexes gained. Standard & Poor’s 500 Index futures were little changed after the measure surged to a record. A gauge of Asian credit-default swaps prices fell 2 basis points, the most since June 19. The Aussie lost 0.4 percent. Platinum snapped a three-day rally, sliding 0.6 percent. Copper fell 0.5 percent after touching the highest price since March.
Data yesterday showed Chinese manufacturing grew at the fastest pace this year in June, factory output in the U.K. unexpectedly strengthened, and U.S. activity held near a five-month high, fueling speculation the economy can bear higher interest rates from next year. Australia’s trade deficit was A$1.91 billion ($1.81 billion), more than nine times wider than the A$200 million shortfall estimated by economists. Private figures on U.S. payrolls are due today, before the government’s monthly report tomorrow.
“Economic conditions continue to look reasonably favorable and the U.S. continues to recover,”Angus Gluskie, who helps oversee more than $550 million at White Funds Management in Sydney, said by phone. “People view the market broadly favorably.”
Global Record
MSCI’s All-Country World Index advanced 0.6 percent to a record 431.26 last session, and was 0.1 percent higher today. The measure added 1.7 percent in June for a fifth straight monthly gain.
The S&P 500 climbed 0.7 percent last session to a record 1,973.32, while the Dow added 0.8 percent, touching levels within two points of 17,000 during the day.
The Institute for Supply Management’s U.S. manufacturing index came in at 55.3 for last month, little changed from a five-month high of 55.4 reached in May. Readings greater than 50 indicate expansion.
Yields on 10-year U.S. Treasuries were little changed at 2.57 percent after rising for the second time in three trading days in New York, adding three basis points, or 0.03 percentage point.
U.S. Jobs
Yesterday’s decline extended the first monthly drop in the notes since March, amid speculation U.S. growth is resilient enough to withstand increases to the Federal Reserve’s main interest rates, currently near zero. BlackRock Inc., the world’s biggest money manager, forecast the first increase in borrowing costs for the second quarter of 2015.
Today’s ADP National Employment Report may offer investors more clues on the health of the world’s biggest economy. The group may say nonfarm payrolls in the U.S. rose by 205,000 in June, after gaining 179,000 in May, according to economists surveyed by Bloomberg. The official data is due tomorrow, with U.S. markets closed for the Independence Day holiday July 4.
FTSE Outlook
A great rise yesterday to the top of the daily channels at 6804ish, so think we can safely say that 6750 held as support! Didn’t quite dip to the long order level, instead bouncing from 6753. We haven’t had much of a dip off the 6804 level, only going as far at 6792 so the resistance levels today, while still close, might get broken. They are at 6806, 6815 and 6821. If they were to be broken then I feel we will be testing 6900 shortly. ADP jobs data later might scupper the bulls (for a while anyway!) and give us a clue for the Non Farm Payrolls tomorrow (US closed Friday).
The Bianca channel tops are still around the 6810 area, while the Raffs are 6820, so there are still some significant levels for the bulls to break just yet. Todays pivot is 6784, so we are likely to get some support there initially, if we do dip at the open. Below that 6750 is still the major support, if that were to break then it will seriously dampen the bulls chances of 6900+.
I’m not as bullish today as i think 6821 will hold as resistance if it gets that high, though I have plotted the arrows to only go as high as the 6810/15 area before some profit taking. There is a pretty decent 30 minute channel on the chart, with levels that tally with other resistance and support so I think we will remain within that today (famous last words maybe if it breaks out at 8:01…)