European Open: FTSE probes trend resistance, futures point lower

Asian Indices:

• Australia's ASX 200 index rose by 26.6 points (0.36%) and currently trades at 7,322.30
• Japan's Nikkei 225 index has fallen by -489.24 points (-1.68%) and currently trades at 28,577.08
• Hong Kong's Hang Seng index has fallen by -300.31 points (-1.28%) and currently trades at 23,175.19
• China's A50 Index has fallen by -232.74 points (-1.44%) and currently trades at 15,925.73

UK and Europe:

• UK's FTSE 100 futures are currently down -11.5 points (-0.16%), the cash market is currently estimated to open at 7,249.11
• Euro STOXX 50 futures are currently down -41 points (-0.97%), the cash market is currently estimated to open at 4,160.87
• Germany's DAX futures are currently down -105 points (-0.67%), the cash market is currently estimated to open at 15,531.40

US Futures:

• DJI futures are currently up 29.79 points (0.08%)
• S&P 500 futures are currently down -40.25 points (-0.25%)
• Nasdaq 100 futures are currently down -7 points (-0.15%)

Asian equity markets were softer overnight after absorbing the hawkishness of the Fed’s meeting and tracked Wall Street lower. Like their US counterparts, technology and growth stocks were the underperformers of the session. Futures markets are pointing to a softer start in Europe.

FTSE 100 rebounds from 7200 support zone

We’ll have to see how sentiment plays out today in Europe, as we saw the US markets turn lower and erase all of their post-FOMC gains yesterday. But if the FTSE 100 can hold above the support zone around 7200, which includes the 4hr 200-bar eMA, 50% retracement and prior swing low, then we favour a bias back towards the 7400 highs.

Prices are trading around the weekly pivot near trend resistance. We’d be keen in minor dips within yesterday’s range to anticipate a breakout, or simple wait for a break of trend resistance to assume bullish continuation. For now trend resistance is likely pivotal.

FTSE 350: 4143.88 (1.25%) 16 December 2021

• 266 (75.78%) stocks advanced and 74 (21.08%) declined
• 8 stocks rose to a new 52-week high, 2 fell to new lows
• 48.72% of stocks closed above their 200-day average
• 12.54% of stocks closed above their 20-day average

Outperformers:

• + 22.1% - Domino's Pizza Group PLC (DOM.L)
• + 13.2% - Cineworld Group PLC (CINE.L)
• + 6.02% - Ferrexpo PLC (FXPO.L)

Underperformers:

• -14.0% - IntegraFin Holdings plc (IHP.L)
• -2.89% - Capita PLC (CPI.L)
• -2.82% - SEGRO PLC (SGRO.L)

JPY strongest major as BOJ reduce levels of stimulus

The Bank of Japan followed the latest trend among central banks to scale back monetary stimulus today. Interest rates remained at -0.1% and their 10-year yield target is to remain around 0%, yet decided to taper corporate debt buying back to pre-Covid levels and trim some of its emergency funding scheme. Whilst it is not by any means hawkish, the BOJ are now slightly less dovish as they were. The Japanese yen was higher against all of its major peers and the strongest currency overnight.

NZD weakest major on bleak business outlook

The NBNZ business outlook index fell to its most pessimistic level in 15 months with concerns over finding skilled workers weighing on the headline index. Investment intentions slipped compared with November yet remain positive, whilst inflation expectations rose to 4.4%. NZD/JPY and NZD/CHF were the weakest of the broadly weaker NZD pairs.

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