Good morning. Nice early drop from the 6612 yesterday for a few points before the rally back towards the 6620/30 area as the Fed announcement got nearer. September 2015 is still being mooted as the likely rate rise time, so we shall see. I think ti might even be later in the year. We have just popped above the 10 day Bianca channel at 6619 so I expect this area to be back tested today, and as we also have the daily pivot there, for it to act as support for a push higher, certainly this morning. Things feel like they are recovering from the lows on Monday, helped by the UK GDP coming in at 0.7% yesterday for the second quarter.
US & Asia Overnight from Bloomberg
Asian stocks rose, following gains in global shares, as profits topped estimates and the Federal Reserve said the U.S. economy was progressing toward an interest-rate increase.
The MSCI Asia Pacific Index climbed 0.2 percent to 141.04 as of 9:01 a.m. in Tokyo. While Fed policy makers said the labor market and housing had improved, they didn’t provide a clear signal on the timing for rate increases, in a statement issued after their meeting. Economists had put the chance of a September increase at 50 percent.
Equities in the U.S. and Europe climbed as earnings from Bayer AG to General Dynamics Corp. topped expectations. Facebook Inc. declined in extended trading. Nomura Holdings Inc. rose 3 percent in Tokyo after first-quarter profit more than tripled as surging brokerage commissions and investment-banking fees outweighed a drop in trading income. Daiwa Securities Group Inc. advanced 3.3 percent after also posting a larger-than-anticipated earnings increase.
“Nothing has really changed with the Fed’s stance,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., said by phone. “Earnings have been reasonable and there have been some bright spots. We expect to see a fairly good gain today” in equity markets, he said.
Japan’s Topix index advanced 0.8 percent. Australia’s S&P/ASX 200 Index gained 0.2 percent and New Zealand’s NZX 50 Index rose 0.2 percent. South Korea’s Kospi index added 0.2 percent. Markets in China are yet to open.
China Futures
Futures on the Hang Seng China Enterprises Index, a gauge of Chinese stocks listed in Hong Kong, and contracts on the Hang Seng Index gained 0.6 percent. FTSE China A50 Index futures were little changed and contracts on the Shanghai Shenzhen CSI 300 Index climbed 2 percent in recent trading.
The Federal Open Market Committee described job gains as “solid,” and it dropped the modifier “somewhat” to describe a decline in labor-market slack. At the same time, policy makers refrained from signaling the probable timing of the first rate increase since 2006, keeping market expectations focused on a move as soon as September.
Futures on the Standard & Poor’s 500 Index slipped 0.1 percent. The underlying gauge gained 0.7 percent on Wednesday. [Ref]
FTSE Outlook
I have a fairly simple plan for today and that is to buy the dip to around the pivot area and plan for 6659 and 6670 or more. If the pivot area breaks then the next support is the 200ema on the 30min at 6600, with 6590 and 6575 below that. Resistance wise, there is a pretty decent 30min channel in play with resistance at 6670+ (depending on when it hits the top of the channel), along with daily chart resistance from the 25ema at the 6659 level. However, the S&P reversed it bearish EMAs pretty easily earlier in the week so it will be interesting to see if the FTSE does the same thing; if it breaks that 25 ema then 6715 looks a likely point it will rise too quite quickly. So, bullish for the moment.