March 17, 2010, 7:00 am EDT — 
… The Standard & Poor’s 500 index futures up 3.70 to 1158.30, as Japan’s Nikkei stock index up 1.2 percent. Britain’s FTSE 100 up 0.2 percent, Germany’s DAX index up 0.5 percent, and France’s CAC-40 up 0.5 percent. Key factor: The U.S. Federal Reserve on Tuesday kept a key lending rate at a historically low level, while saying the economy is showing signs of improvement. Indeed, low interest rate environment is here to stay, at least into 2011. … The Labor Department releases its Producer Price Index at 8:30 a.m. EDT., which is likely to fall 0.2 percent in February, according to economists polled by Dartline. Excluding oil and food prices higher at present, past result are meaningless. … The World Bank raised its China growth forecast this year to 9.5 percent from 9 percent on Wednesday but said Beijing needs to cool inflation and possible bubbles in real estate prices. Analysts expect Beijing to raise interest rates soon as it eases off its stimulus after growth rebounded to 10.7 percent in the final quarter of 2009. But authorities say easy credit will continue because the global outlook is uncertain. The World Bank also said more exchange rate flexibility would help if Chinese leaders worry that higher interest rates might draw in speculative capital. Meanwhile, an uninformed group of American lawmakers wrote to President Barack Obama this week urging him to press Beijing to loosen controls that its trading partners say keep the yuan undervalued, giving China’s exporters unfair price advantages. Beijing denies that it does. The World Bank’s chief China economist, Ardo Hansson, said the bank does not follow exchange rate issues and could not comment whether the yuan was undervalued. Washington and other trading partners are pressing Beijing to ease currency controls that have kept its yuan steady against the dollar for 18 months to help exporters compete amid weak global demand. Many analysts, but not Dartline, expect the government to gradually raise the yuan’s value this year but to keep control over exchange rates.
— Change S&P 500 index resistance to 1197.30 from 1150.41. Near term direction is up, even as volume remains weak. Option expiration should change add to volume, but with new money entering the market is rise in index more manipulation than substance. Be careful and trade the noise.