Performance Support GPIF Nikkei reports
The Nikkei rose after the Nikkei newspaper reported that the Japanese government pension fund (GPIF) will announce its investment allocation changes today. The leading Japanese daily wrote that the GPIF will increase investment in the local stock allocation to 25% and increase the share of foreign bond investments to 15%. GPIF is a large-cap financial institutions in the world with funds under management reached $ 1.2 trillion. The amount of funds managed by causing changes in investment allocations can also influence the performance of the stock market. Nikkei futures gained 1.31% and is now trading at 15 890.
The rising tide of expectations that the BoJ will provide a dovish statement when an end to the meeting this morning also gave a positive sentiment. The market is still quite sure BoJ may ease monetary policy further after a series of Japanese data released this morning sinyalkan fragility of the economic recovery and the slowdown in inflation.
Japanese household spending posted a 5.6% decline for the month of September; worse than the 4.7% decline in September. Japan’s unemployment rate rose from 3.5% to 3.6% in September. The fall in household spending and rising unemployment can be undermined hopes for a continued economic recovery in the world’s 3 largest.
Core inflation (consumer price index) recorded a rise in Japan’s annual 3% in September; slower than the 3.1% rise in August. However, if the increased sales tax in April were excluded from the data, the annual core inflation recorded an increase of only 1%; lower than the increase of 1.1% in August and lower than the BoJ’s inflation target of 2% that wants to achieve the central bank in April 2015. Slowing inflation has increased the market expectations that the BoJ will probably give the signal will be able to provide additional stimulus or shift the inflation target of achieving a longer time.
Technically, the index in the trading session today, Friday (31/10) is likely to strengthen, test positive trend. In a bullish hammer formation M15 chart gives an opportunity for the index to move upside. However, the volume is likely to increase, as well as an early indication of a bullish index. In addition, RSI, on the M15 chart, is in the oversold area, cue upside.
It is estimated, the index test the first resistance level of 15 970 and 15 925 16020. If you fail, then the next index is expected to tend to retest the support level of 15900 and continued to be in the area of 15 850 possibilities.
Disinflation Concerns Sink Euro
The euro touched the lowest level in 3-1 / 2 weeks versus the US dollar on Thursday as concerns about the spread of disinflation, following Germany’s annual inflation slowing to 0.7% in October. Which is the lowest figure since May.
The euro is still on the path to the biggest annual drop since 2005 on Friday ahead of the release of data that may suggest the rate of inflation in the region remained far below the target of the European Central Bank. Economists predict the Euro zone CPI grew at an annual pace of 0.4% in October.
Technically, the trading session today, Friday (31/10), the pair euro dollar likely to move in a negative trend.
The weakening of the euro is mainly expected to immediately reexamine the minimum support at 1.2550 and 1.2500 maximum. Meanwhile, if the euro is able to break and hold above 1.2601, then another alternative scenario ie the Euro likely to test resistance in 1.2650 and 1.2700 area.
Gold Ends fell
Gold drifted lower in late trading metal commodity exchange on Thursday, for the first time was under $ 1,200 level since October 3, after the Fed’s policy meeting.
Gold for December delivery slid $ 26.30, or 2.2% ending at $ 1,198.60 an ounce. Gold futures were likely to find support at the level of $ 1.19820 with the highest resistens at $ 1,200.30.
Silver for delivery in December fell 84 cents, or 4.9% to $ 16.42 per ounce.
A day earlier, gold could take a few steps forward to stop the decline as market participants shift focus back to the equity stock market. Gold ended higher in the previous session up 10 cents to settle at $ 1,229.40 per ounce. Silver for December delivery rose 6 cents to $ 17.23 per ounce level.
Gold and silver prices this morning seen under pressure downward when the Federal Open Market Committee decided to end bond-buying program in the third quarter of 2014 and left interest rates at a low level without any change 0:00 to 0:25%. Previously, the rate of bond purchases by the Fed of $ 15 billion per month, but is supported by the improvement in the US labor market conditions that have prompted the central bank to end its stimulus program in October.
The Committee considers that there has been a substantial improvement in the labor market prospects since the beginning of the current asset purchase program. In addition, the Committee continues to see considerable fundamental strength in the wider economy to support the ongoing progress toward maximum employment in a context of price stability.
Technically, gold at today’s trading session on Friday (31/10) potentially bearish, tested negative trend back, but prone to reversal. The RSI indicator is likely to re-test support channel and towards the oversold area, but the Bollinger Bands which began to widen, thus giving impetus to gold to the upside.
It is estimated that the price of gold immediately prior to test support at least in the area of 1193.50 and re-test the maximum level of 1190.00. However, if the price of gold is able to break and hold above 1198.50 then estimated the price of gold has the potential to test the 1200.00 and 1205.50 Resistance.
