European Open: Asian Equities lower ahead of central bank meetings

Asian Indices:

• Australia's ASX 200 index rose by 6.1 points (0.08%) and currently trades at 7,385.40
• Japan's Nikkei 225 index has fallen by -234.65 points (-0.82%) and currently trades at 28,404.73
• Hong Kong's Hang Seng index has fallen by -301.42 points (-1.26%) and currently trades at 23,653.16
• China's A50 Index has fallen by -47.81 points (-0.29%) and currently trades at 16,317.49

UK and Europe:

• UK's FTSE 100 futures are currently up 23.5 points (0.32%), the cash market is currently estimated to open at 7,254.94
• Euro STOXX 50 futures are currently up 9.5 points (0.23%), the cash market is currently estimated to open at 4,192.54
• Germany's DAX futures are currently up 25 points (0.16%), the cash market is currently estimated to open at 15,646.72

US Futures:

• DJI futures are currently down -320.05 points (-0.89%)
• S&P 500 futures are currently up 16 points (0.1%)
• Nasdaq 100 futures are currently up 8.5 points (0.18%)

Asian equities tracked Wall Street lower with Omicron concerns and the looming FOMC meeting weighing on sentiment. China has reported its first case of the variant and the UK reported its first known death. The Hang Seng China Enterprise index led the way lower with a -1.3% decline and the Hang Seng was down -1.2%. The Nikkei was off by around -0.8% although the ASX 200 was effectively flat at -0.02% lower.

Gold treads water ahead of FOMC

Gold has drifted higher this week yet the 20-day eMA is capping as resistance. And as the 200-day eMA is just below $1800 we expect this level to provide strong resistance should gold somehow rise from current levels. Last week we had been monitoring a potential bearish wedge which did not come to fruition, but whilst prices remain below $1800 then it’s a market we’d prefer to fade into (sell rallies) for a mover back to the November low.

AUD falls with lower business confidence

The reopening of Sydney and Melbourne and rise of employment helped business conditions rise to 12 from 11 in Australia in November. However, business confidence slipped to 12 from 21, although 21 was historically high and 12 still shows Australia is amidst a strong recovery.

AUD/USD remains below its 20-day eMA and trades just beneath the August low around 0.7100. Given the September low and 20-day eMA capped as resistance over several days last week and Monday printed a bearish engulfing candle, we suspect the market has topped. Our bias remains bearish beneath last week’s high and for a break below 0.7100 and to retest the December low.

 

 

 

UK employment, US business confidence and producer prices up next

UK employment data us scheduled for 07:00 and the pound is trading at this week’s low ahead of it. It appears to a case of a stronger US dollar over a weaker pound, but a soft employment report could keep GBP below 1.3200. At 10:00 industrial production data is released for the Euro zone, then it is over to the US session where the NFIB business optimism index is released at 11:00 and then producer prices at 13:30.

FTSE 350: Market Internals

The FTSE 100 fell to a 4-day low as bearish momentum finally took hold, after printing a bearish pinbar below the YTD high last week. However, it holding above the 50-day eMA and August high, with 7200 just below so we suspect the 7200 / 7218 zone could be a pivotal level over the coming day/s.

FTSE 350: 4130.09 (-0.83%) 13 December 2021

• 57 (16.24%) stocks advanced and 285 (81.20%) declined
• 7 stocks rose to a new 52-week high, 8 fell to new lows
• 49% of stocks closed above their 200-day average
• 18.23% of stocks closed above their 20-day average

Outperformers:

• + 7.19% - Jupiter Fund Management PLC (JUP.L)
• + 5.54% - Moonpig Group PLC (MOONM.L)
• + 2.68% - Watches of Switzerland Group PLC (WOSG.L)

Underperformers:

• -18.67% - Capita PLC (CPI.L)
• -6.36% - Trainline PLC (TRNT.L)
• -6.30% - IWG Plc (IWG.L)

 

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