(MENAFN- ProactiveInvestors) FTSE100 Index called to open -30pts at 6920 having traded sideways overnight into the apex of a narrowing triangle pattern which normally serves as consolidation before a continuation of the prior trend. The 100-day moving average continues to hold at 6910 with Bulls still eyeing a return to the highs and the Bears a drop back to a more bargain-like level. Note many Euro bourses closed or likely to trade thinly due to Ascension day holiday. Watch levels: Bullish 6960 Bearish 6880.
The negative opening call comes as the UK’s benchmark index pulled back in futures trading overnight following an impressive rally on Wednesday as FTSE100 corrected upwards gaining 0.2% supported by Mondi and shares the latter having been volatile of late in the run-up to its trading statement on 20 May and positive macro data in the form of the lowest Q1 unemployment rate since 2008 and a rebound in wage growth. Shares in footed the index with their biggest losses in 10-months.
US bourses lacked direction for much of Wednesday. Disappointing US macro data led to a considerable pullback in the Dollar Basket and several financial institutions revised down their Q2 GDP estimates for the world’s #1 economy. Euro-worries took the form of ECB concerns surrounding the relationship between Greece’s government and its central bank where comments have been noted that appear to be challenging its independence under EU law. Greece fell back into recession in Q1.
Asian stocks in the red after a choppy/breakeven US session with the global bond slump continuing (prices down yields up) in response to pending monetary policy normalisation. Asian equities hindered by regional FX strength as the USD index dropped to near 3-month lows on weaker than forecast US data (retail sales import prices business inventories) which compounded recent US data misses raising concerns about the US economic outlook and further pushing back rate-rise expectations.
Japan’s Nikkei underperforming on a strong JPY/weaker USD as well as a raft of soft corporate earnings reports. Australia’s ASX bucking a 2-day rally as healthcare names send it lower while Hong Kong’s Hang Seng is underwater as Chinese markets trade mixed on poor lending data on the heels of yesterday’s Retail Sales and Industrial Production disappointments even if both justify recent stimulus intervention.
In Focus today we have US Jobless and Continuing Claims indications showing a rise in the number of people out of work. US PPI looking largely flat adding to worries from recent weak data that Q2 may not be as strong as many were anticipating and the US might not be ready for interest rate rises just yet.
Brent Crude ($65) may be settling into a sideways channel as it continues to trade just short of 2015 highs. A similar story for US Light ($60). Potential for yesterday’s breakouts from triangle patterns to lead to continuation of uptrends for both benchmarks while a multitude of drivers in the form of recent data indicating a fall in US stockpiles for the second straight week while the global market remains oversupplied. Meanwhile US Shale producers are ready to bring their rigs back online amid a supposed oil price recovery. Such mixed sentiment is creating volatile trading conditions with US reserves still about 90mn barrels higher than they were at this time last year while the second biggest US oil producing state North Dakota surprised to the upside with its output report.
Gold is back trading around recent $1215 highs thanks to USD weakness (metal cheaper to non-US buyers) driven by poor US data which accentuated questions over the strength of the US economic recovery. Concerns still abound regarding Greece with the ECB questioning Greek central bank independence given the pressure from Athens and German Finance Minister supporting the idea of a Greek referendum. Support $1200 Resistance $1225.
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