This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Equities are in the red this morning, albeit well off their worst levels. Investors were spooked overnight by hawkish Fed minutes suggesting earlier than expected discussions about trimming its QE-bloated balance sheet. Markets had been at ease with more US rate hikes, assuming justification from the economic benefits of Trump stimulus, however, said discussions are being taken as too soon in terms of the accepted pace for US monetary policy normalisation.
With little fiscal policy progress to show, and markets already questioning whether the ‘Trump trade’ has gone too far on hopes alone, sentiment was also jolted by Fed concerns about downside risks to its policy plans from overstretched equities.
Timing couldn’t be any worse either, with Trump just hours from meeting Chinese counterpart Xi, his biggest summit since taking office. Will he use the opportunity to say something special to reignite the post-election equity rally?
The UK’s UK 100 is being dragged 12pts lower by ex-dividends, including LLOY, AV and PSON. Other culprits include BP & RDSb (oil turned back), AZN & GSK (healthcare bill delays to hinder US deregulation), Banks (Fed downside risks to policy plans). There is meagre assistance from Miners (metals prices holding recent gains) and ULVR (strategic review). Germany’s DAX is being weighed on by Banks and Autos based on US growth and Fed concerns.
The UK Index 100 has bounced to test 7300 resistance, showing appetite for a break higher. The DAX 30 has broken below 12200, but found support at 12120. Dow Jones Futures have bounced back above 20600 thanks to 2-week rising support. Gold is consolidating $1240-1260, holding above its 200-day moving average.
Click below to expand sections for more detailed analysis
The UK Index 100 has bounced to test 7300 resistance, showing appetite for a break higher. Note the RSI rebound from oversold.
Watch levels: Bullish 7305, Bearish 7285
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
The DAX 30 has broken below 12200, but found support at 12120. Note, however, the RSI did not fall to oversold.
Watch levels: Bullish 12180, Bearish 12160
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
Dow Jones Futures have bounced back above 20600 thanks to 2-week rising support at 20570.
Watch levels: Bullish 20,640, Bearish 20,620
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
Gold is consolidating $1240-1260, holding above its 200-day moving average at $1242.
Watch levels: Bullish $1254, Bearish $1253
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research