FTSE 1oo Support 6807 6788 6784 6777
FTSE 1oo Resistance 6831 6836 6848 6850 6857

Good morning. Went in a bit early with the longs in the end yesterday as it did indeed bounce, though stalled around the 6825 area. Overnight has stayed pretty flat too ahead of Yellen’s speech today following the Jackson Hole meeting. UK news out yesterday showing a rise in consumer confidence. Its really going to be all about Yellen today and what the outlook is for interest rate rises in the US.

US & Asia Overnight from Bloomberg

• Yellen speech may provide clues to U.S. interest-rate outlook
• Oil buoyed by report Iran to join OPEC talks; zinc rallies

Asian stocks declined and the dollar pared this week’s advance ahead of a speech by Federal Reserve Chair Janet Yellen that may shed light on the U.S. interest-rate outlook.

The MSCI Asia Pacific Index fell to a two-week low as Japanese equities led losses in the region. The dollar was headed for its first weekly gain versus the yen in more than a month as Fed funds futures indicated a 57 percent chance of a U.S. rate hike this year. The pound rose as a report showed a pickup in U.K. consumer confidence. American crude held above $47 a barrel amid speculation major producers will agree an output freeze at OPEC talks next month, while zinc climbed to a 15-month high.

Yellen will speak Friday at an annual gathering of central bankers in Jackson Hole, Wyoming, and any comments she makes on the state of the economy and interest rates will be scrutinized by investors. Wagers on higher rates have been boosted this week, even as evidence of uneven global growth casts doubt over the Fed’s willingness to tighten policy amid monetary easing in Asia and Europe. Jackson Hole has been a big market mover only once in the past decade, when former Fed Chairman Ben S. Bernanke signaled the second round of quantitative easing in 2010, according to Bank of America Corp.

“More likely the commentary will, cautiously and implicitly, point towards December” for the next rate increase, said Imre Speizer, a market strategist at Westpac Banking Corp. in Auckland. “That shouldn’t ruffle market pricing for the Fed Funds rate too much, and the dollar may well continue to consolidate.”

Japan’s core consumer prices fell 0.5 percent last month from a year earlier, exceeding the 0.4 percent drop predicted by analysts, data showed Friday. Gauges of consumer confidence in Germany and the U.S. are also scheduled for release, while the U.K. will report gross domestic product figures for the second quarter. Lukoil PJSC and Prada SpA are among companies announcing earnings.

Stocks

The MSCI Asia Pacific Index was down 0.3 percent as of 1:38 p.m. Tokyo time, headed for a 0.4 percent weekly loss. Japan’s Topix index lost 0.8 percent amid trading volumes that were about 25 percent below average. Hong Kong’s Hang Seng Index and the Shanghai Composite Index advanced, while benchmarks declined in Australia and South Korea.

“You can’t take on risk ahead of important events” such as Yellen’s speech, said Takashi Ito, a Tokyo-based equity strategist at Nomura Securities Co. “There are two views on what she’ll say; either that she’ll take a step forward in her reference to the rate hike, or she won’t mention it at all. It’s difficult to predict. If she does make more hawkish comments the market could be chaotic in the short term.”

Futures on the S&P 500 were little changed after the underlying measure slipped 0.1 percent on Thursday.

Currencies

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, slipped 0.1 percent for a second day, still on track for a 0.3 percent weekly advance. Dallas Fed chief Robert Kaplan said Thursday the pace of interest-rate increases in the U.S. should be “patient and gradual” to limit impact on the dollar, while his Kansas City counterpart said it’s already time to move. Futures indicate the probability of a Fed rate hike in September is 32 percent, up from 22 percent a week ago.

“The outcome of the Fed’s Sept. 21 meeting will be largely determined by the tone of Janet Yellen’s speech at Jackson Hole,” said Sean Keane, an Auckland-based analyst at Triple T Consulting and a former head of Asia-Pacific rates trading at Credit Suisse Group AG. If she continues the confident tone of some of her colleagues, “market expectations for a September rate increase will likely move up closer to 60 percent to 70 percent,” he said.

The yen traded at 100.49 per dollar, set for a 0.3 percent weekly decline. The fifth straight month of consumer-price declines underscores the challenges facing the Bank of Japan, which is using unprecedented monetary stimulus as it targets an inflation rate of 2 percent.

The British pound was headed for a 1 percent weekly advance, supported by signs the U.K. economy is proving resilient in the wake of the Brexit vote. U.K. consumer confidence rose the most in more than three years this month, a report showed Friday. South Africa’s rand tumbled almost 5 percent this week as a police summons for Finance Minister Pravin Gordhan spurred speculation the government was seeking to replace him.

Commodities

Crude oil was little changed at $47.28 a barrel, set for its first weekly loss this month. It gained 1.2 percent in the last session as Saudi Arabia’s energy minister said an output freeze would be positive for the market and Iran confirmed its attendance at an informal meeting of the Organization of Petroleum Exporting Countries in Algiers next month.

Gold held near a one-month low, having fallen this week as speculation built that the U.S. will interest rates this year.

Zinc climbed as much as 1.3 percent in London to its highest since May 2015. Morgan Stanley said this week that zinc is its top commodity pick, forecasting that prices may rally further should China’s steel output remain strong, while cautioning the metal may come under pressure if Glencore Plc restarts mines curtailed last year.

Bonds

U.S. Treasuries due in a decade rose, pushing their yield down by one basis point to 1.56 percent. The two-year yield fell one basis point to 0.78 percent, after climbing three basis points in the last session. A Bank of America Corp. gauge of expected price swings in U.S. sovereign bonds is headed for a second weekly increase as it rebounds from an Aug. 10 level that was the lowest since 2014. [Bloomberg]

FTSE 100 Outlook and Prediction

As mentioned above its all eyes on Yellen today and rate rises (or not). I am expecting a bit of a dip to start with down to the pivot at 6807, and then we might see some buy the rumour activity kick in. If that plays out that could take us up to the resistance level at 6836 where we have the 200ema on the 30min, and possibly to the top of the 10day Bianca at 6848 after that. Obviously we are approaching a bank holiday weekend here so we may see some profit taking of any rises towards the end of the day as people might not want to hold positions over a long weekend.

Below the pivot, we have support at the 6780 area where we have both he Bianca channels, as well as the level we bounced from yesterday. Below that then 6750 beckons as well as a general weakness then likely to kick in which could get the bears going. The bulls have been pretty keen on defending the 6800ish area recently though. There is actually a turn date around about now as something else to bear in mind so if any weakness does start then its likely to get some significant down moves.

So, simple plan again really for today, dip and buy the rumour, then look to short around the 6850 area later on. Though bear in mind a lot will be dictated by this speech later (15:00 UK time), and we also have UK GDP due at 09:30 – forecast to be 2.2%