FTSE Daily Weekly & Monthly
City Index August 10, 2012 10:10 PM
<p>The relative vacuum of key data from the G10 gave way to more evidence of what could be a Chinese hard landing. Inflation and retail […]</p>
The relative vacuum of key data from the G10 gave way to more evidence of what could be a Chinese hard landing. Inflation and retail sales at two-year lows, retail at two-year lows, while July industrial production remains near three-year lows. Such is the proof of further deterioration in the biggest of BRICs economies. But the UK also produced its share of downbeat surprises. The Bank of England’s latest economic downgrades follow three consecutive quarters of negative GDP growth. Yesterday’s release of the biggest trade gap in 15 years will not help economic growth. Could these be the elements supporting the case for further QE and eventually a rate cut from the BoE?
UK equities remain 5% higher year-to-date, according to the FTSE-100.
The index ends the week on a low note after five consecutive daily gains lifted it to four-month highs. Any pull back in the upcoming week will have to close above 5830 trendline in order to maintain the current run. A break below 5800, is likely to find subsequent support at 5697–100-week moving average. On the upside, the index has the potential to revisit the March highs but faces 15-month trendline resistance (monthly chart) at 5920. This is likely to be the intermediate target in the current “summer rally”, which is in line with our forecast for further gains in August.
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.