Regency View:

Morning Report – Thursday 18th March

FTSE to open at 6,778 (+16 pts)

The Fed reiterated its dovish stance yesterday despite sharply upping it’s growth forecast.

Fed officials now predict that the US will grow by 6.5% this year, a significant jump compared with 4.2% in its December forecast. However, Chairman Jay Powell said that “substantial” progress was still needed before the central bank would begin curtailing its bond-buying programme.

The S&P erased intra-day losses to close back above its February highs, Asian stocks have followed suit and Hong Kong’s Hang Seng has had a bullish session.

It is worth noting that bond yields have jumped to new highs over night and this may weigh on stocks if yesterday’s dovish Fed comments still can’t curtail the rise in borrowing costs.

?Risk Barometer Explained

Yesterday’s Fed-led fightback in the US couldn’t provide enough exuberance for the FTSE futures to break through 6,800.

The market continues to coil beneath this key resistance level – remaining within the range of Tuesday’s inside day. Something’s got to give, and should the market finally break above 6,800, it would open the door for a run into the January highs.

FTSE 100 Daily Rolling Futures – Key Levels