FTSE 100 live outlook prediction analysis for 8th March 2021
A bumper employment boost in Joe Biden’s first jobs report caused a spike in US government borrowing costs to their highest level in more than a year. Inflation jitters on bond markets were fuelled again by 379,000 jobs being added to the US economy in February, the strongest showing for four months.
Forecasters predicted the vaccine rollout and the president’s stimulus jolt will extend the jobs recovery in the coming months after an expectations-smashing report.
The labour market quickly regained momentum following the second wave setback with the jobs gain in the first full month under Mr Biden well above forecasts of below 200,000. Unemployment edged down 0.1 percentage points to 6.2pc but the headline rate is flattered by many American workers temporarily sitting out of the labour market.
Signs of the rapidly recovering jobs markets stoked volatility in US Treasuries, which are being closed watched by investors. Expectations of a strong economic recovery boosted the benchmark 10-year Treasury yield to above 1.60pc, the highest level in more than a year before later retreating. Bond yields have risen sharply this year on worries that a fast rebounding economy will spark higher inflation, potentially forcing central bankers to pare back stimulus.
Starting Strong
Asian stocks are set to start the week strong. The U.S. House is ready to approve a $1.9 trillion Covid-19 stimulus and China data pointed to strong global demand as economies recover from the pandemic. Currencies were steady. Futures pointed higher in Japan, Australia and Hong Kong. On Friday, U.S. stocks rebounded. Benchmark 10-year yields stabilized after hitting 1.6% as U.S. jobs data topped estimates, fueling anxiety the economy could run too hot and kick up inflation.
Oil Attack
In an escalation of attacks on oil, Saudi Arabia’s most protected oil facilitycame under fire on Sunday, sending oil prices above $70. But the missile and drone barrage didn’t cause “loss of life or property,” according to the Saudi Energy Ministry. Yemen’s Houthis claimed a series of attacks on Sunday, including the one on the Saudi Aramco facility at Ras Tanura, which is the world’s largest oil terminal, capable of exporting roughly 6.5 million barrels a day — nearly 7% of current oil demand. The Saudis have raised prices for its crude for shipment to Asia and the U.S. next month after OPEC+ extended oil supply constraints, pointing to a tightening physical market.[Bloomberg]
US & Asia Overnight from Bloomberg
Asian stocks fell Monday with U.S. equity futures as higher Treasury yields tempered optimism over President Joe Biden’s $1.9 trillion pandemic relief plan and the growth outlook. Crude oil jumped.
Tech stocks struggled as China and Hong Kong led the regional retreat. Nasdaq 100 futures underperformed while European contracts rose. Ten-year Treasury yields remain in focus, ticking up. U.S. stocks rebounded Friday and the 10-year yield touched 1.6% after jobs data beat estimates.
Oil surged after Saudi Arabia said the world’s largest crude terminal was attacked, though output seemed to be unaffected. Meanwhile, the U.S. spending plan moves to the House following Senate passage of the legislation. The bill’s progress and strong Chinese export data bolstered economic prospects.
Inflation risks and higher long-term borrowing costs are spurring questions about equity valuations, especially for high-growth tech stocks. Treasury yields are increasing on a stronger economic outlook, Federal Reserve officials said Friday, playing down the need for a monetary policy response.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
We had a really good rise on Friday and was good to have the support level at 6565 hold. The bulls will be keen to build on that strength today and we may well get a bit of a bull Monday, at least initially. There are some decent resistance levels looming into view though, especially the 6745 area on the FTSE100 and the 3852 to 3865 area on the S&P500.
For today we have initial support at 6655 to start with as we have the daily pivot and the fib support level here. If we do get an initial dip then it would be good to see this hold to act as a spring board for a push up to the 6745 resistance level.
If the bulls were to break above the 6750 level (and bear in mind R1 is at 6756) then we have the 10 day Raff above that at 6781 and then R2 at 6813. Can the bulls get it all way to 6800 today though? There is of course the real risk that Friday was the buy the rumour, sell the news pattern ahead of the $1.9tn stimulus bill being passed over the weekend. The S&P will need to defend the 3786 level today though if it were to start to slide.
If the FTSE bears are to have a say then below the 6655 level they will be looking for 6636 where we have the 200ema on the 30m chart, and then S1 at 6598 below that. With the round number also likely to see a reaction then we could see a slide to this defended by the bulls. Once again the daily chart has gone bullish with 25ema support at 6618, so the bulls will certainly be keen to hold this area. The 2h chart is also bullish as you would expect, with 6654 Hull moving average support and then the green coral at 6628.
Below the 6600 level then there is a fair bit of fresh air as S2 is at 6496. That said I am more inclined to go with a rise and dip playing out today and I am not expecting it to get that low.
So, thinking a bit of bull Monday initially but watching the 6745 resistance level closely, with 6810 above that. For support 6655 and then 6600. Good luck today.
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