FTSE 100 Support 6883 6875 6866 6798 6782
FTSE 100 Resistance 6919 6931 6956 7014 7018

Good morning. We finally saw a bit of bearish activity with a move below 6900 yesterday, falling to 6850, before the Fed minutes helped to reverse that. There wasn’t much in the way of divi hunting prior to the bell, with most waiting till later to see what the Fed said. With rate rises not happening any time soon, the markets rose, with the FTSE climbing back to 6895. With resistance at 6919 this morning it will be interesting to see how much further it goes, and if the momentum swings back to the bulls. Meanwhile Britain’s economy will slow down but should not go anywhere close to a recession, according to economists at credit ratings agency Moody’s, while growth in the rest of the world is also “stabilising.” Moody’s economists predict growth of 1.5pc this year and 1.2pc in 2017.

US & Asia Overnight from Bloomberg

The dollar retreated versus all of its major peers after minutes of the Federal Reserve’s last meeting damped prospects for a U.S. interest-rate increase this year. Yen gains weighed on Japanese shares, while corporate earnings gave a lift to stocks in Hong Kong.

The Bloomberg Dollar Spot Index sank to a three-month low after the Fed record showed officials saw little risk of a sharp uptick in inflation, helping push odds of a rate hike this year back below 50 percent. Australia’s dollar jumped after better-than-expected jobs data. Japan’s Topix index fell as the yen strengthened beyond 100 versus the greenback, while the MSCI Emerging Markets Index was set for its best close in a year. Crude traded near $47 a barrel in New York after the longest run of gains in a year.

Bets that central banks around the world will remain accommodative amid uneven growth propelled global equities to a one-year high this month and sent the dollar tumbling. The Fed minutes struck a more dovish tone when compared with comments this week from New York Fed chief William Dudley, who flagged the prospect of a rate hike as soon as next month. Dudley will hold a press briefing on Thursday in New York and his San Francisco counterpart, John Williams, is also due to speak.

“The message appears to be that as much as a September hike is a possibility, the Fed is unlikely to move until there is a consensus on the outlook for growth, hiring and inflation,” said Rodrigo Catril, a currency strategist at National Australia Bank Ltd. in Sydney. “Recent data would therefore suggest a hike is not imminent.”

The European Central Bank may shed light on its policy outlook when it releases an account of July’s monetary policy meeting on Thursday. Euro-area inflation data are also due, while the U.K. will report on retail sales and the U.S. has weekly jobless claims figures coming. Nestle SA and Wal-Mart Stores Inc. are among major companies announcing earnings.

Currencies

Bloomberg’s dollar gauge, which tracks the U.S. currency against 10 major peers, fell 0.3 percent as of 1:06 p.m. Tokyo time, after rising 0.2 percent last session. The index was up as much as 0.5 percent on Wednesday ahead of the Fed minutes’ publication.

“The minutes struck a cautious note against any rushed rate hike decision,” said Mitsushige Akino, a Tokyo-based executive officer at Ichiyoshi Asset Management Co. “The odds are for a December hike, rather than a September one, and the yen looks set to extend gains from here.”
The yen strengthened for a fifth day, gaining 0.3 percent to 99.98 per dollar. South Africa’s rand gained 0.7 percent, leading gains among the currencies of commodity-exporting nations. The Aussie climbed 0.6 percent after a report showed Australia’s unemployment rate unexpectedly fell to 5.7 percent in July.

Mongolia’s tugrik dropped for a record 24th consecutive day, sliding to an all-time low. The nation’s central bank raised its benchmark interest rate to 15 percent from 10.5 percent to support the currency, while the government announced salary cuts for executives and management-level staff at state-owned enterprises in a bid to prevent a default.

Stocks

The MSCI Emerging Markets Index rallied 0.8 percent as benchmarks in Hong Kong and Indonesia rose more than 1 percent. The Topix dropped 0.9 percent and Australia’s S&P/ASX 200 Index lost 0.5 percent. The Philippine Stock Exchange Index erased losses after the government reported better-than-expected economic growth for the second quarter.

The Hang Seng Index climbed 1.6 percent, with all of its four biggest gainers rallying in the wake of earnings. Tencent Holdings Ltd., which has the biggest weighting on the gauge, surged as much as 6.2 percent to an all-time high after reporting a 47 percent jump in quarterly profit that beat analysts’ estimates.

“There’s a euphoria,” said Francis Lun, chief executive officer at Geo Securities Ltd. in Hong Kong. “Given the economic conditions, investors were not expecting too much from earnings.”

Treasury Wine Estates Ltd., which owns Penfolds and is the world’s largest listed vintner, jumped as much as 13 percent in Sydney after reporting increases in annual sales and earnings. Samsung Electronics Co., the world’s largest maker of phones and memory chips, rose to an all-time high in Seoul.

S&P 500 Index futures gained 0.1 percent after the U.S. benchmark ended the last session within 0.4 percent of a record high.

Commodities

Crude oil fell 0.1 percent to $46.75 a barrel in New York, after advancing on each of the last five trading days. It gained 0.5 percent on Wednesday as data showed U.S. crude and gasoline stockpiles declined, easing an overhang of supplies that are at the highest seasonal level in at least two decades. OPEC is on course to agree an output-freeze deal because its biggest members are already pumping flat-out, Chakib Khelil, the group’s former president, said in a Bloomberg interview.

“The decline in crude inventories and the much bigger drop in gasoline stockpiles is clearly a positive,” said Angus Nicholson, a market analyst in Melbourne at IG Ltd. “There has been a lot of momentum in the oil price, fueled by some jawboning with regards to the possibility of a supply freeze deal.”

Gold rose 0.4 percent, climbing for a fourth day amid the dollar’s retreat. Silver and platinum rose more than 0.9 percent.
Copper added 0.7 percent in London, nickel gained 1 percent and aluminum traded near a 13-month high. The World Bureau of Metal Statistics reported late Wednesday that all six industrial metals included in the London Metal Exchange’s LMEX Index saw shortages between January and June, with the aluminum market’s shortfall widening to 479,000 metric tons in the first half, from 331,000 tons in all of 2015.

Bonds

U.S. Treasuries due in a decade advanced for a second day, pushing their yield down by one basis point to 1.54 percent. Morgan Stanley recommends buying five-year notes, saying the absence of inflationary pressures in the world’s biggest economy will push the probability of a Fed rate increase this year to 30 percent in coming weeks. The likelihood was 49 percent on Wednesday, according to Bloomberg calculations based on Fed fund futures. The yield on Australia’s 10-year bonds fell three basis points to 1.88 percent, having fallen as low as 1.86 percent prior to the employment data. [Bloomberg]

FTSE 100 Outlook and Prediction

We have resistance still on the 2 hour chart that we haven’t tested yet since going bearish on the 16th August. That resistance is at 6920, with the coral at 6931 – as such I am favouring a short around this area this morning for another leg down. The rise was mostly fuelled by the Fed saying that there were not likely to be rate rises this year. Initially we have support from the pivot at 6883, with the 30min coral just below that at 6875.

So, a fairly simple plan really for today, looking for longs around the pivot area at 6880 and short at the 6920 area.