Asia Overnight from Bloomberg

Asia’s benchmark stock index is poised for a second weekly advance after Japan’s Topix Index rebounded near a 2008 high as leasing companies rallied on a report Prime Minister Shinzo Abe will encourage the practice to revive capital spending.  The MSCI Asia Pacific Index was little changed at 142.99 as of 1:44 p.m. Tokyo time, with four shares rising for every three that fell. The gauge increased 11 percent this year through yesterday as the Bank of Japan took steps to counter deflation and policy makers in the U.S. and Europe remained on standby to buoy growth. The measure is heading for a 0.8 percent advance this week, extending gains from last week.

“The market is trading in a tight range as profit-taking takes place while investors buy on dips,” said Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co., which oversees the equivalent of $33 billion.

Shares on the MSCI Asia Pacific Index traded at 14.3 times estimated earnings yesterday, compared with 21 for the Nikkei 225, 15 for the Standard & Poor’s 500 Index and 13.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Asia RSI

The 14-day relative strength index, a measure of trading momentum, has held above 70 for both the Nikkei 225 (NKY)Stock and the Topix for the past six days. That’s a level some traders say signals a sell-off.  “In the short-term, the Japanese market looks overbought, but in the long-term it’s not.” Robert Aspin, Singapore-based head of equity investment strategy for wealth management at Standard Chartered Plc., said in an interview. “We’re looking for the market to come off a little bit and go through a period of consolidation.”

US Futures

Futures on the Standard & Poor’s 500 Index added 0.2 percent today. The index fell 0.5 percent in New York yesterday after jobless claims jumped by 32,000 to 360,000 last week, the most since the end of March. Housing starts slumped 16.5 percent in April, the most since February 2011, the Commerce Department reported.

Outlook

ftse 100 prediction

Today’s pivot is 6693, and I have resistance at 6695. I feel that a short at 6695 with a stop above 6710 (say 6712) should pay off today though watch option expiry at 10:15ish. If the FTSE does drop and break S1 at 6670 then we could well see 6657 as the bears get their teeth into it. If however we break 6700 to the upside then its possible that we will exceed yesterday’s high. However, I’m inclined to think that we see a little dip currently with possibly some profit taking ahead of the weekend. Therefore I have a short bias for today, with a possible short entry around 6695, however, the 30min and 10min charts are both flashing sell signals as I write this with the price at 6687. Bears will want to break 6682 ASAP to continue some downward pressure. The 4 hour chart appears to be levelling off a bit with a  drop in the flux signal that we have. Also on the daily charts, the price has dipped below the middle of the Raff channels now, whilst on Bianca, we are back below the top of the 50 day at 6715, but as we are near the top of that channel still, I think we may see a bit of a dip.

So overall today I am feeling more bearish, with a possible entry at 6695, however I think the short term trend is down so am looking at shorting any rallies today. With a declining coral  at 6688, its possible that we might not get 6695, but the bears need to break 6682 to gain some downward pressure. If we do dip, then the bottom of the 30min channel at 6667 will offer support and it will be interesting to see if this is breached and we dip to 6650.

Asia Overnight from Bloomberg

Most Asian stocks fell as a decline in Japanese banks after forecasting lower earnings offset a report that Japan’s economy expanded faster than analysts estimated in the first quarter. The MSCI Asia Pacific Index slid 0.3 percent to 142.78 as of 12:22 p.m. Tokyo time, erasing gains of as much as 0.5 percent. About four shares fell for every three that rose on the measure. The gauge increased 11 percent this year through yesterday as the Bank of Japan took steps to counter deflation and policy makers in the U.S. and Europe remained on standby to buoy growth.

“The market, particularly in Japan, looks overbought and needs a pullback,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $126 billion, said by phone. “We’re not going to see a full reversal at this stage. The effects of aggressive monetary stimulus in Japan is just starting to gain traction.”

Selling Signal

Japan’s Nikkei 255 Stock Average dropped 1.1 percent, retreating from the highest close since January 2008. The broader Topix Index fell 1.5 percent, after earlier rising as much as 0.5 percent. The 14-day relative strength index, a measure of trading momentum, has held above 70 for both gauges, a level some traders say signals a sell-off.

The Nikkei 225 and the Topix both climbed about 45 percent this year through yesterday as the Bank of Japan introduced unprecedented monetary easing and the U.S. economy showed recovery signs.

US Futures

Futures on the Standard & Poor’s 500 Index were little changed today. The index rose 0.5 percent to a fresh record in New York yesterday after data showing weakness in manufacturing fuelled bets the Federal Reserve will be in no hurry to scale back stimulus. Industrial production declined in April by the most in eight months.

Outlook

ftse 100 prediction

Today’s pivot is 6688, pretty much where we are as I type this, the pattern this week has been drop to the pivot, bounce then hold steady at the highs. However, as you can see above Japan RSI is over 70, as is the FTSE – not a signal in itself but a sign that things are a bit overbought. I think we may see a bit of a pull back from these levels and am looking for 1640 on the S&P today, which will obviously take the FTSE down a bit with it. I have plotted today’s arrows assuming that the pivot at 6688 holds pre market, but it must be said that the graph does look bearish with negative EMAs on the 30 min and the 10 min is also tracking down, though is at a point where is could turn bullish for a bit if the pivot holds. If the pivot does hold we have R1 at 6707 and R2 at 6720, and also that major ProTrend line has been plotted at 6724 so there would be a few hurdles to jump. If 6724 is seen then that’s a definite shorting area for me. We are still pushing the top of the Bianca 50 day channel at 6692 for today, whilst remaining mid channel on the daily Raffs, again just tracking upwards.

If we do head up to 6720 then the shorting areas at 6707 and 6720/24 should come good with a dip later this afternoon once the US comes online, I will probably short at 6720 area rather than try and pick an exact figure.

Asia Overnight from Bloomberg

Asian stocks rose as Japan’s Nikkei 225 Stock Average climbed above 15,000 for the first time since January 2008 after the yen touched a 4 1/2-year low against the dollar, boosting the earnings outlook for exporters.  The MSCI Asia Pacific Index gained 0.8 percent to 143.16 as of 12:22 p.m. in Tokyo, with almost two shares rising for each that fell. The gauge increased 9.8 percent this year through yesterday as the Bank of Japan took steps to counter deflation and policy makers in the U.S. and Europe remained on standby to buoy growth.

“Every time the yen falls below a key level, the Nikkei passes another milestone because it boosts corporate profits, especially for manufacturers,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees the equivalent of $100 billion. “Stocks should rise further as investors acknowledge the impact of government policy. Given that, I don’t think stocks are that expensive.”

Australian Budget

Australia’s S&P/ASX 200 Index dropped 0.9 percent after Treasurer Wayne Swan announced yesterday the government will record a A$19.4 billion ($19.2 billion) deficit this fiscal year and the budget will only return to balance in the 12 months through June 2016. The Australian dollar dropped to an 11-month low after the release. New Zealand’s NZX 50 Index swung between gains and losses.

US Futures

Futures on the S&P 500 Index slid 0.1 percent today. The index rose 1 percent yesterday in New York to its eighth record high in the past nine sessions. Germany’s DAX Index advanced 0.7 percent to 8,339.11, a record high.

Outlook

ftse 100 prediction

Interesting out of hours action last night, on the Dow close, the FTSE jumped 30 in fairly short order, while the Dow remained fairly static. Stop hunt maybe to close out some bears?  Germany data just out while writing, their economy grew only 0.1% in Q1 versus 0.3% expected. Yesterday’s rise has largely been attributed to the re-grade of Greece – good news, at least till Spain is next on the ropes being pummelled anyway! Still, seemed a bit of a bullish over reaction to it if you ask me, especially as the issues are far from solved throughout Europe. Today’s pivot is 6663, and we have the bottom of the 10 day Bianca channel at 6669, so if anyone shorted off the round number 6700 then that would be a good profit taking place. We are still tracking the mid points on the daily Raff channels so not reaching the edges of those channels yet. There is a longer term chance of 6770 on the FTSE looking at the daily chart (I don’t think we will see that today though).

We have dipped off the back of that German data, but I think the bulls will be desperate to regain 6700 in hours, however, we might see some bears come in at the double top with the out of hours high for the dip to the pivot area. There is a more major ProTrend resistance at 6725 which I think we will see today, and that level coincides with the top of the 10 day Bianca channel. Looking at the S&P for today, there is strong resistance at 1658 – only 10 points above where it currently is. Back to the FTSE and the 30min EMAs are still bullish and we broke through the channel that had been in play Monday and Tuesday, and using the ProTrend lines, its more the horizontal lines that are in play today – 6710 and 6724. The 10 minute chart has just flashed a weak bear signal at 6690, however, I think an initial rise to 6710 is more likely early doors.

Asia Overnight from Bloomberg

Asian shares rose for a second day as gains in Japanese utilities countered a slide in Chinese stocks. Gold climbed after a three-day loss lured buyers while Japan’s yen rallied from the lowest level in more than four years.

The MSCI Asia Pacific Index added 0.2 percent at 12:54 p.m. in Tokyo, while South Korea’s Kospi Index increased 0.8 percent. Standard & Poor’s 500 Index futures were up 0.1 percent. The Shanghai Composite Index fell 1.6 percent. The yen gained 0.2 percent versus the dollar while Australia’s currency snapped a six-day drop. The Dollar Index, a gauge of the U.S. currency against six major peers, slid 0.3 percent.

Australia will focus on jobs and growth, Treasurer Wayne Swan said today before his government delivers its budget. Bank Indonesia will probably keep its benchmark interest rate at a record-low for a 15th meeting today, while data is forecast to show German investor confidence rose this month. JPMorgan Chase & Co. cut its growth outlook for China’s economy.

“The rally, particularly in Japan, may continue as earnings recover,” said Daphne Roth, the Singapore-based head of Asia equity research at ABN Amro Private Bank, which oversees about $207 billion. “Central banks are still pursuing quantitative easing and that’s going to support further gains.”

About 52 percent of the companies in the MSCI Asia Pacific Index have reported earnings that beat analyst estimates in the most recent quarter, according to data compiled by Bloomberg.

Outlook

ftse 100 prediction

Today’s pivot is 6622 which will act as a support area should the market start to drop. We have bullish Tuesday but also some significant resistance at 6660 and 6670, indeed even R3 is only 6672 and S3 at 6581 so we are getting quite bunched up at this level. There is a bigger picture target of potentially 6770 though, though I am watching the S&P to see if it can break 1642ish – I think it might struggle there and as mentioned above it does feel like we are pausing a bit around these levels. I think the article published last Friday after hours on the Wall Street Journal about QE being phased out – quickly passed off as a “joke” – spooked a few bulls.

The 30 minute EMAs are bullish still, but while I have been writing this the 10 minute has gone a bit bearish, so I think 6660 and possibly 6670 might be decent short areas today initially, but the US will drag things up later. That said, the lack of buying enthusiasm yesterday, especially with the better than expected retail news, could be suggesting a pause in the bull run….

As mentioned Tuesdays are usually bullish, and it will be interesting to see what the FTSE does, if it does get bullish, at the 6660 and 6670 areas. There is resistance on the S&P at 1636 as well, which could tally with that 6670 area, hence I have put a down arrow from that area, despite it being bullish Tuesday. We are still within the 30 minute channel that we had yesterday with the top looking like it will be in play today. I have also put a 4 hour chart below which also has a channel top at….. 6670. Definitely going to be worth a short at that area if seen.

Asia Overnight from Bloomberg

Japanese stocks climbed, bonds fell and the yen touched the weakest level since October 2008 as Group of Seven officials indicated they will tolerate a decline in the currency. Most Asian shares slid with gold and oil. While signalling acceptance of the yen’s decline, G-7 policy makers said they examined Japan’s strategy and that they will monitor its impact on currencies. Data on Chinese industrial production and Indian consumer prices are due today, as well as debt sales by Italy and France.

“Markets are prepared to back Japanese authorities’ attempt to reflate in terms of a weaker yen and expanding monetary base,” said Tim Schroeders, a portfolio manager who helps manage $1 billion in equities at Pengana Capital Ltd. In Melbourne. “The export sector from Japan will be an obvious beneficiary of that.”

G-7 policy makers reaffirmed a February commitment to “not target exchange rates,” U.K. Chancellor of the Exchequer George Osborne told reporters May 11. Bonds fell, sending U.S. Treasury 10-year yields to 1.94 percent, the highest level since March 26.

“The statistics from China are still looking soft and if there is not enough growth momentum from China, that’s going to affect Chinese-related markets like Hong Kong,” said Tim Leung, a portfolio manager who helps oversee about $1.5 billion at IG Investment Ltd. in Hong Kong.

Outlook

ftse 100 prediction

Today’s pivot level is 6618, pretty much where we are as I write this, so that could well act as support initially. I think the open is going to be fairly cautious today as people assess the next move. Friday was fairly bullish, testing highs around 6640 – a level that I think we will see again today. We have a fairly narrow channel on the 30 minute based on the ProTrend lines automatically plotted, with the top around 6650 and the bottom 6613 – there is a slight bearish bias at the moment (07:06) testing the bottom of that channel. On Friday any slight dips in the Dow and S&P were quickly recovered – market still being pumped up with QE and fear of missing any further climbs. As I mentioned above the current price is above the Bianca 50 day channel, and it usually drops back within that. it was above the channel on Friday as well. However the 20 and 10 day channels are still nearer the 6700 area. On the Raff chart, we have a cluster of resistance currently around 6750, as well as a horizontal ProTrend at 6725 – will we get that high this week? We are tracking the midpoint of the 10 and 20 day Raffs pretty well at the moment though, pretty much since the beginning of May.

For today, if the bottom of the channel holds then I expect a retest of Fridays highs at 6640, possibly the channel top at 6650. R1 is 6644 for today, and with the EMAs clustered together on the 30 minute chart its hard to pin point the initial direction, though I am inclined to think that the channel will hold at 6612. S1 is 6598 for today so a stop below that for longs should be fine. Generally the 30 minute chart is bullish overall, despite some pre market jitters this morning and I think we will see that 6640 again.

Asia Overnight from Bloomberg

Most Asian stocks rose, with Japan’s Topix Index headed for a 4 1/2 year high as the yen weakened beyond 100 per dollar, boosting the earnings outlook for exporters.  The MSCI Asia Pacific Index slipped 0.1 percent to 142.41 as of 1:49 p.m. in Tokyo, with about three stocks rising for every two that fell. The gauge is headed for a 1.7 percent advance this week. Japan’s Topix rose 2.4 percent, heading for the highest closing level since September 2008.

“If you have a supportive export environment with the U.S. getting better, Europe has stopped getting worse, it actually augurs well for Japan for the medium term,” Simon Flood, chief investment officer at Lion Global Investors Ltd. in Singapore, where he helps oversee $25.5 billion, told Bloomberg TV. “There are a lot of great companies there, quality is high. If this Japanese story is more substance than form, you’re going to see a lot of international investors focusing their attention and looking for opportunities there.”

Australia’s S&P/ASX 200 Index rose 0.4 percent and New Zealand’s NZX 50 Index climbed 0.2 percent. South Korea’s Kospi index slid 1.3 percent, the most in four weeks, as exporters retreated after the won climbed to its highest level against the yen in more than four years. Taiwan’s Taiex Index declined 0.2 percent, Hong Kong’s Hang Seng Index retreated 0.2 percent and China’s Shanghai Composite gained less than 0.1 percent.

US Futures

Futures on the Standard & Poor’s 500 Index rose 0.2 percent. The measure fell 0.4 percent yesterday, following five consecutive days of record closes, as Federal Reserve Bank of Philadelphia President Charles Plosser said he favours scaling back the central bank’s pace of stimulus.

Outlook

ftse 100 prediction

Today’s pivot is 6587 and for the bears to gain any traction over the next few sessions we will need to dip below that and ultimately below 6540(bottom of the 10 day channel). I don’t think we will see that much bearishness today, but as it’s a Friday, after a good week who knows. There is likely to be some profit banked while we are at the 6620 level. We have just risen 8 points since 7am so I think we can be fairly sure that 6620 will be seen today, that also coincides with the top of the channel you can see on the 30minute chart below. The Support and Resistance levels for today aren’t that far apart really, with R3 at 6628, so I feel a short at 6620, with a stop at 6632 say should be ok, though you may want to go wider above the 10 day Bianca at 6645. That said, there will be a cluster of short orders around these levels and the market will probably want to stop them out asap before any notable drops. So the short there will be risky, low leverage and see if it turns into a runner. We can’t argue with the fact that the trends are up on the longer time frame, however, looking at the Bianca trends we don’t usually stay above the 50 day channel for that long, currently top on that at 6598. With the 10 day at 6641 and a ProTrend on the daily at 6660 we could be nearing a profit taking area.  If the US stays bullish I am looking at 1640 S&P and 15250 Dow as resistance areas.

Anyway, its Friday, stay nimble as Fridays can be odd, watch for action at 6620, possibly 6640 for the 10 day Bianca, and let’s see if there’s some profit taking or a few bears sticking their heads above the parapet, fuelled by Plosser’s comments

Asia Overnight from Bloomberg

Asian stocks outside Japan climbed as the Bank of Korea cut interest rates and News Corp. (NWSA) reported earnings that beat estimates. Japan’s Topix Index (TPX) erased gains as the yen strengthened. The MSCI Asia Pacific Excluding Japan Index advanced 0.2 percent to 489.62 as of 1:27 p.m. in Tokyo, gaining for a fifth day. The MSCI Asia Pacific Index, which includes Japan, lost 0.1 percent, reversing gains of as much as 0.4 percent.

“The shift of money into equities is going to be an ongoing theme for a very long time,” said Peter Esho, Sydney-based investment adviser at Wilson HTM Investment Group, which manages $11.8 billion. “Investors want a stable base of earnings and that has been good so far. Central bank money printing is not changing any time soon. It makes equity markets look very attractive.”

The MSCI Asia Pacific Index increased 11 percent this year through yesterday amid speculation the Bank of Japan will deploy more measures to beat deflation as policy makers in the U.S. and Europe remain on standby to buoy growth.

Australia Jobs

Australia’s S&P/ASX 200 Index swung between gains and losses after a report showed the nation’s unemployment rate fell in April as companies hired more workers than analysts estimated. New Zealand’s NZX 50 Index lost 0.1 percent.

US Futures

Futures on the Standard & Poor’s 500 Index were little changed today. The gauge yesterday climbed 0.4 percent, a fifth day of gains, as earnings forecasts from Whole Foods Market Inc. and Electronic Arts Inc. beat estimates.

Outlook

ftse 100 prediction

Today’s pivot level is 6572 and I expect a dip to that area initially before another assault on 6600, and possibly getting to the 6610/20 area. The top of the 10 day Bianca channel for today is 6612 which I expect we will see, especially off the back of the US later. We are going through another current phase of “all news is good news” which will probably end soon, and then we will see a dip during the latter part of May, as the news flow turns to worse news. News out later include the UK rate decision (expected to remain at 0.5%) and QE (also expected to remain at 375bn). The 200ema on the 30min chart is likely to be around 6555 if the price drops to the pivot area so a stop below that would make sense. The trends are still firmly up on both Raff and Bianca, with the Raff channel tops around 6700. If we do break through the 6620 area then I expect that we will see 6725 where there are 2 ProTrend lines on the daily chart – vertical and horizontal resistance. we are in a very narrow channel on the 30 minute chart at the moment with the top at, funnily enough, 6620 for today. We could keep tracking that channel higher though I think the bears might pop in at 6620. With the channel being so narrow we may well see a break of it today, and if 6620 does indeed act as resistance then that could be to the downside and making May get all bearish.

Asia Overnight from Bloomberg

Asian stocks advanced for a third day, with the regional benchmark index rising to a five-year high, as China’s exports topped estimates and companies including HSBC Holdings (5) Plc posted earnings that cheered investors. The MSCI Asia Pacific Index climbed 0.8 percent to 143.21 as of 2:01 p.m. in Tokyo, with all 10 industry groups rising. The measure increased 9.8 percent this year through yesterday amid speculation the Bank of Japan will deploy more measures to beat deflation as policy makers in the U.S. and Europe remain on standby to buoy growth.

“Markets are being driven by heightened stimulus,” said Matthew Sherwood, Sydney-based head of investment market research at Perpetual Ltd., which manages about $25 billion. “Economic data remains in the Goldilocks range — weak enough to warrant continued stimulus, but strong enough to keep earnings expectations positive.”

China’s exports rose 14.7 percent in April, topping the 9.2 percent increase estimated by analysts surveyed by Bloomberg. Imports climbed 16.8 percent in April, beating the 13 percent forecast.

Outlook

ftse 100 prediction

With yesterday’s slow grind up, it feels like the bulls are wary of going long at these lofty heights in any great quantity, whilst the bears are keeping their powder dry and awaiting a confirmed sell signal. I’d still wager that we will see 6600/6620 in the very near future. However, with the price nearing the top of the 10 day and the 50 day Bianca channels, then I suspect that this last bit of bull is to stop out those that went short at the start of May adopting the “sell in May”. There isn’t anything particular at the moment to be bearish, so it will probably be something sudden and unexpected. The trends are still pretty firmly up as you can see from the Raff channels on the daily view. Zooming into the 30 minute chart we have a nice ProTrend channel in play with the top at 6575 and the bottom at 6535. With today’s pivot sitting at 6547 and the general trend being bullish, I expect that the 6540 area will hold, however, if not then a drop to the 200ema at 6520 looks likely. R1 for today is also at 6573 so I do expect a bit of bear action there, though whether we will get the full drop to 6540 remains to be seen – will be a case of going short there and then getting stops to breakeven asap, and then trail them. The EMAs are currently bullish on the 30 minute but weak; it’s the same situation on the 10 minute chart. Are bulls getting exhausted or just catching their breath for a final push?

Asia Overnight from Bloomberg

Asian stocks rose for a second day and Japan’s Topix Index erased losses from the 2008 collapse of Lehman Brothers Holdings Inc. as the Reserve Bank of Australia cut its benchmark interest rate and the European Central Bank said it’s ready to lower borrowing costs further. The MSCI Asia Pacific Index climbed 1.1 percent to 141.87 as of 1:42 p.m. in Tokyo, with about two shares rising for each that fell. The gauge climbed 8.5 percent this year through yesterday amid optimism the Bank of Japan will deploy more measures to beat deflation and that policy makers in the U.S. and Europe remain on standby to buoy growth.

“Investors like to be reassured from central banks that we are on the straight and narrow,” said James Lindsay, an Auckland-based fund manager at Tyndall Investment Management Ltd., which oversees about $23 billion. “Until economies really start to fire, I can’t see any pull-back of stimulus.”

Japan’s Nikkei 255 Stock Average (NKY) climbed 3.2 percent, trading above 14,000 for the first times since June 2008. The broader Topix Index jumped 2.8 percent to a level not seen since before Lehman filed for bankruptcy protection on Sept. 15, 2008. Japanese markets were closed yesterday for a holiday.

US Futures

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The gauge gained 0.2 percent yesterday to a record, led by financial shares, after data last week showed American employers added more workers than forecast in April.

Outlook

ftse 100 prediction

After a bank holiday its usually a good idea to let things settle a little, and we are looking at opening at Fridays closing level of 6521, so not much for the gap traders to go for initially. The bulls will be desperate to push through the 6530 resistance area that you can see with the thick red ProTrend line again, and also Fridays high at 6543 in order to push for the 6600 level. Whilst other markets are making their new highs, the FTSE is lagging and still off its 1999 high, at 6950. I don’t see why the bulls cannot charge for the 6600 area though there is support at 6504, so an initial dip could bottom there.  The daily trends are certainly still up at the moment looking at the Raff and Bianca charts. 6504 is today’s pivot, and roughly the 25ema area on the 4 hour chart. Looking to the 30 minute chart now the EMAs are currently bearish, but look to be gearing up for a cross to bullish, whilst the faster moving 10minute chart is bullish since approximately 06:30 this morning. Whilst the bulls will be pushing, there are a few hurdles to jump first with a cluster of resistance levels between 6520 and 6548, as you can see on the 30min chart below. We may see some stalling (assuming that the bulls take control) at 6582/88, where both the 10 and 20 day Bianca channels are for today.

I have put a fairly bullish day below with the key level circled at 6545 ish which is Fridays high. If the bulls can break that then we should get the 6580/6600 level. As long as the bulls start off in charge then the 6530 should turn to support for the day. If not then support at 6504 looks likely. If we do get 6600/6620 then I feel that’s a great area for some long term shorts.

Asia Overnight from Bloomberg

Metals rose and Asian stocks gained for the first time in three days as investors awaited the release of U.S. jobs data and Macquarie Group (MQG) Ltd.’s earnings beat estimates. The dollar weakened. Data today may show U.S. employers hired more workers in April than in the prior month, according to a Bloomberg poll of economists, after a report showed yesterday jobless claims fell to a five-year low. The Reserve Bank of India may cut its borrowing costs at a meeting today, a separate survey shows. The European Central Bank lowered its benchmark rate to a record low yesterday and President Mario Draghi signalled another reduction is possible.

“Good economic data from the U.S. aided the technical rebound for metals,” Xu Liping, an analyst at HNA Topwin Futures Co., said from Shanghai. “We are still in a sell-on- rally environment as growth in China, which accounts for 40 percent of the global consumption, is in question.”

U.S. payrolls increased by 140,000 workers after an 88,000 gain in March, according to the median forecast of economists surveyed by Bloomberg News before a Labour Department report. Applications for U.S. unemployment insurance payments fell 18,000 to 324,000 in the week ended April 27, the fewest since January 2008, Labour Department figures showed yesterday.

Outlook

ftse 100 prediction

The 10 day Bianca area held pretty well yesterday and the bulls managed to keep the FSTE above 6400, with a really large bounce from the lows. Though the price has been fairly flat overnight, there does look to still be a bit of bull power, though it will need to break 6480/85. As mentioned above I think we will see 6600 by roughly mid-May. From there I expect the more serious declines. For today, the pivot area is 6447 so that could act as support if seen. I think we will see an initial test of the 6480 area, a drop to the pivot and then its up to the US and NFP – if good we could then rise to 6500, possibly 6507 (R1), but if its not idea then further declines. As per usual with NFP days it’s a bit of a rollercoaster coin flip!

I expect that we may will see 1604 today on the S&P though. The EMA’s on the FTSE 30 minute are still bullish, though with the overnight flatness they are close to crossing to bearish, however the 10 minute chart is looking more positive for a rise, but again needs to break through 6466 in this case to push higher. I think traders might be expecting a weaker NFP, despite estimates, as jobs news recently hasn’t been all that great, then with a decent number the bulls will push on. At some point soon of course the worry will be that the QE is going to be reduced which will set the cat amongst the pigeons! As per usual, its Friday (and with NFP thrown in too) could be a weird one!