European Open: The FTSE powers ahead, UK employment up next

Asian Indices:

Australia's ASX 200 index rose by 44.5 points (0.64%) and currently trades at 7,009.00
Japan's Nikkei 225 index has risen by 56.26 points (0.2%) and currently trades at 28,596.66
Hong Kong's Hang Seng index has risen by 79.2 points (0.41%) and currently trades at 19,441.45
China's A50 Index has risen by 146.92 points (1.1%) and currently trades at 13,563.79

UK and Europe:

UK's FTSE 100 futures are currently down -21.5 points (-0.29%), the cash market is currently estimated to open at 7,451.53
Euro STOXX 50 futures are currently down -7 points (-0.19%), the cash market is currently estimated to open at 3,639.51
Germany's DAX futures are currently down -24 points (-0.18%), the cash market is currently estimated to open at 13,378.27

US Futures:

DJI futures are currently up 13 points (0.04%)
S&P 500 futures are currently up 7.75 points (0.06%)
Nasdaq 100 futures are currently up 2.25 points (0.05%)

Today’s US inflation report is the key event this week. We’ve already seen pre-emptive bets that it will continue to soften – which has placed pressure on the US dollar and allowed commodities and equities to rise. The ASX has rallied alongside US markets these past four days, as investors see the potential for less aggressive tightening from the RBA and Fed, and for inflation to soften. News that Ukraine regained some key battleground has also lifted sentiment.

A host of data points at 07:00 BST includes final inflation reads for Germany and employment figures for the UK. In July we saw signs of the UK’s hot inflation market cooling, as businesses were more cautious hiring into an inevitable recession with double-digit inflation. The 160k jobs added was by no means bad but quite a bit below the 260k expected and expected to soften to 128k today. The 3.8% unemployment rate remains historically low, which leaves plenty of time for it to rise of or when the wheels fall off.

Germany’s annual inflation rate currently sits at 7.9% y/y or 0.3% m/m, so any print lower than these could fan hopes that inflation has peaked. Then at 10:00 BST Germany’s ZEW economic report is expected to fall to -52.2 from -47.6, which will be its most pessimistic level since February 2021.

FTSE 100 daily chart:

On Friday we outlined a bullish bias for the FTSE 100 towards 7360, at which point we suspect it may find resistance and continue lower. We can see the first phase played out very well with an immediate rally out of the gates but, after a short pause, cut through several resistance levels.

A bullish engulfing candle formed on the 4-hour chart and closed firmly above the monthly pivot point, 100 and 200-bar EMA’s and its rally has paused around the monthly R2 pivot. From ere the bias remains bullish above the 7345 low and for a move higher towards the 7600 resistance zone.

FTSE 350 – Market Internals:

FTSE 350: 4144.91 (1.66%) 12 September 2022

313 (89.43%) stocks advanced and 29 (8.29%) declined
10 stocks rose to a new 52-week high, 0 fell to new lows
31.43% of stocks closed above their 200-day average
97.43% of stocks closed above their 50-day average
15.43% of stocks closed above their 20-day average

Outperformers:

+ 153.74% - Aston Martin Lagonda Global Holdings PLC (AML.L)
+ 11.28% - Ferrexpo PLC (FXPO.L)
+ 9.34% - NCC Group PLC (NCCG.L)

Underperformers:

-6.77% - Serco Group PLC (SRP.L)
-5.09% - abrdn Private Equity Opportunities Trust plc (APEO.L)
-4.80% - Network International Holdings PLC (NETW.L)

Economic events up next (Times in BST)

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

Open a Forex.com account, or log in if you’re already a customer.
Search for the pair you want to trade in our award-winning platform.
Choose your position and size, and your stop and limit levels.
Place the trade.

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

Contracts for Difference (CFDs) are not available to US residents.

FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of Stonex Group Inc.

Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.

Know your advisor