As for FCPO, market traded higher yesterday in the absence of fresh factors. Buying was led by ideas of technical correction with the stochastic indicating oversold. Support followed higher China Dalian futures
and e-CBT soyoil. A smaller than expected rise in the 1-15 June production by Southern POMA also underpinned sentiment. There was light selling pressure early from lower CBT soyoil which found good support. Prices were 5 lower to 19 higher in the morning and rose to 31 higher in the afternoon.
Generally, there are no new factors. Market is correcting from recent decline after the very good 1-15 June exports and some estimates that production is about unchanged in June vs May. The upcoming Indonesian export levy is also supportive. However, concerns over increasing production in the coming months and big soyabean supplies will continue to weigh on sentiment.
Technical view - prices correcting from the oversold situation in the stochastic, keeping within the 2250 - 2350 range. Ringgit ~ 3.7500 / 3.7520 vs USD. Trend sideways ; RSI 58.38 ; parabolic SAR at 2261 ; stochastic turned up from oversold ; support 2250 / 2225 / 2150 ; resistance 2330 / 2360 / 2400 / 2450. Interested to trade futures?
In other news...
The FOMC is meeting Tuesday and Wednesday to decide its next move. The central bank has kept U.S. interest rates pinned near zero since late 2008 in the hope of spurring an economic recovery. While investors don’t expect the Fed to raise rates at this meeting. The federal funds futures market indicates a 43% chance of a 25 bp rate hike at the next FOMC meeting on July 28-29, a 73% chance of a rate hike by the Sep 16-17 meeting, an 84% chance of a rate hike by the Oct 27-28 meeting, and a 100% chance of a rate hike by the Dec 15-16 meeting.
📝 The markets are looking ahead to today’s weekly ECB meeting on Greece and tomorrow’s Eurozone finance ministers meeting. Greece is hoping that Eurozone finance ministers at their meeting tomorrow, or Eurozone leaders at next Thursday’s (June 25)summit in Brussels, will soften their demands. Greece could potentially stretch negotiations into July if it can either make the 1.5 billion euro payment that is due to the IMF on June 30 or be granted a 30-day grace period on making that payment.
🇺🇸 U.S. stocks rose, rebounding from two days of losses, as investors awaited news on Greece’s bailout talks and the outcome of the Federal Reserve’s policy meeting.
€ European equities closed higher after paring losses in earlier trade, with investors keeping watch for developments in Greece and a two-day policy meeting at the U.S. European stocks also took a hit after the German May ZEW investor confidence fell for a third month to the lowest in 7 months.
🇨🇳 China's Shanghai Composite Index down -3.47% at a 1-1/2 week low on valuation concerns, worries of a fresh clampdown on margin financing and a new wave of initial public offerings (IPOs).
🌺 Shares of Kuala Lumpur-listed AirAsia doubled losses to more than 8%, hitting their lowest levels since August 2010, after group CEO Tony Fernandes said the airline will raise funds at loss-making associates and sell planes to pare down debt in a note issued yesterday.
⛽ U.S. oil prices climbed on strong demand for crude and the threat of a tropical storm along the Gulf Coast.
👑 Gold fell as some investors cut back holdings due to pressure from a stronger dollar and as a precaution ahead of the Federal Reserve’s monetary policy decision. Now, $1,181.70.
👑 Bank of China has become the first Chinese bank to participate in the London gold price fix, the latest example of the country’s push deeper into global financial markets.
🌴 FCPO (RM2,291) closed higher as supported by higher China Dalian futures and Soyoil. Technical correction with the stochastic indicating oversold also added support. Generally, there are no new factors. Market is correcting from recent decline after a very good exports data and some estimates that production is unchanged in June vs May.
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