FTSE Daily Weekly & Monthly

<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.

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