China and Japan give risk a boost
City Index May 22, 2014 2:17 PM
<p>The Chinese HSBC manufacturing PMI data showed that modest stimulus measures had improved factory output as the sentiment number rose to a six-month high of […]</p>
The Chinese HSBC manufacturing PMI data showed that modest stimulus measures had improved factory output as the sentiment number rose to a six-month high of 49.7, versus the 48.1 expected. In the FX space AUD was the main beneficiary, rallying to 0.9270 as the 0.9200 support level held firm.
The Nikkei led the charge in equities, up 2.1%, following on from a stronger US session attributed to the FOMC minutes. I think WSJ journalist and Fed watcher Hilsenrath sums it up perfectly with ‘lots of talk and no action’. JPY weakened with a stronger Nikkei as the technical picture now changes. The 2014 low of 100.75 held yesterday, aided by rumours that Japanese Post Insurance plans to boost investment in Japanese equities by 50% this year.
Sterling continues to push higher and back above 1.69 following the strongest retail sales reading in 10 years. MPC minutes had the market assessing the real possibility of a rate hike this year as the FT say a rate hike is now inevitable, with the only question being when as committee members revealed that the ‘policy decision was becoming more balanced’.
European Parliamentary elections being held today will be watched for the performance of anti-European parties as PMI data from the EU is released. We get the second release of the UK GDP number at 9.30am as the US session brings us PMI and home sales data.
Supports 1.3635-1.3580-1.3500 | Resistance 1.3740-1.3780-1.3830
Supports 101.30-100.75-100.00 | Resistance 101.80-102.00-102.30
Supports 1.6830-1.6770-1.6730 | Resistance 1.6930-1.7000-1.7045
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.