FTSE 100 Support 6870 6868 6851 6822 6793
FTSE 100 Resistance 6885 6897 6915 6978

Good morning. Unsurprisingly the Fed have kept rates unchanged as we all expected, but hinted at further rate rises later this year, and monetary policy will remain accommodative. All worked well yesterday for the FTSE short from 6875 which ran down to the target area (even though I closed a bit too early in the end) and then bounced from the 6830 pivot area. Sell the rumour, buy the news seemed to be the order of the day! The bulls will need to break 6902 today.

US & Asia Overnight from Bloomberg

Asian stocks rallied for a sixth day, South Korea’s won strengthened and regional bonds rose after central banks including the Federal Reserve indicated monetary policies will remain accommodative.

Raw-materials producers were the biggest gainers on an MSCI index of Asian shares outside of Japan, where markets are shut for a holiday. U.S. equities advanced on Wednesday as the Fed left rates unchanged and scaled back its projections for hikes in 2017 and beyond. The won jumped the most since June as the dollar held losses from the last session. New Zealand’s currency weakened and its 10-year bonds surged by the most in three months after its central bank said further policy easing is expected. Crude oil gained following an unexpected slide in U.S. stockpiles.

Loose monetary policies in the U.S., Europe and Asia have helped power gains in stocks, bonds and commodities this year and the latest signals from central bankers suggest the era of cheap money has further to run. While the Fed still sees a rate hike this year, its projection for increases next year was trimmed to two from three. Japan’s central bank on Wednesday pledged to overshoot its 2 percent inflation goal and took steps to limit the negative side effects of its record stimulus.

The period “of having very low developed market rates for a very long time, and investors needing yields, that is still there,” Peter Kinsella, head of emerging market economic and foreign-exchange research at Commerzbank AG, told Bloomberg TV in Hong Kong. “We had previously thought it was going to be an aggressive Fed rate hiking cycle and it’s clearly not going to be that.”

Speeches are due Thursday from the heads of the European Central Bank and the Bank of England, while at least seven central banks have policy reviews. Indonesia’s central bank is forecast to lower interest rates and about a third of economists surveyed by Bloomberg are predicting a cut in Norway, while monetary authorities in South Africa and Turkey are seen leaving borrowing costs unchanged. France has business confidence gauges due and a measure of consumer sentiment in the euro area is also scheduled.

Stocks

The MSCI Asia Pacific excluding Japan Index was up 1.3 percent as of 11:57 a.m. Hong Kong time. Gauges of raw-materials producers and energy stocks rallied at least 1.9 percent.

Hong Kong’s shares were the region’s best performers as the Fed’s policy statement damped the outlook for interest-rate increases in the city, whose borrowing costs typically move in step with those of the U.S. owing to a currency peg. Mainland funds have helped drive a 16 percent surge in the Hang Seng Index since June, putting it on course for the biggest quarterly jump since 2009.

“The rally on Hong Kong stocks still has a way to go as valuations and dividend yields are more attractive than mainland stocks,” said Wei Wei, an analyst at Huaxi Securities Co. in Shanghai. “What may halt the rally is when U.S. really does raise rates this year and the market’s valuations get close to those of mainland stocks.”

Nine Dragons Paper Holdings Ltd. jumped as much as 11 percent in Hong Kong after the Chinese paper maker reported results and boosted its profit forecast. Hanjin Shipping Co., the South Korean container line that has sought bankruptcy protection, surged 30 percent after securing new loans. from top shareholder Korean Air Lines Co., which rallied more than 5 percent.

Futures on the S&P 500 Index were little changed after the underlying gauge climbed 1.1 percent in the last session. Contracts on the FTSE 100 Index added 0.5 percent.

Currencies

Bloomberg’s dollar gauge, which tracks the greenback against 10 major peers, was little changed after sliding 0.7 percent in the last session. The won jumped 1.4 percent and the yen weakened 0.1 percent, after volatile trading on Wednesday that saw swings of more than 1 percent in both directions following the BOJ meeting.

The Japanese central bank’s policy tweaks give it scope to keep easing to revive the economy and inflation, while limiting the negative impact on bank earnings.

The ringgit strengthened 0.5 percent, the most in two weeks, as the pickup in oil prices brightened prospects for Malaysia, Asia’s only major net exporter of crude.

The kiwi weakened 0.2 percent, the biggest loss among major currencies. The Reserve Bank of New Zealand kept its key interest rate at a record low on Thursday and saidfurther reductions will be needed in order to move inflation toward its 2 percent target. Investors increased bets on a November rate cut, with the probability of a move by then rising by 18 percentage points to 69 percent in the swaps market.

“The RBNZ Statement, although little changed from August, was slightly more dovish than the market anticipated,” said Jason Wong, a currency strategist in Wellington at Bank of New Zealand Ltd. “This was probably a tactical move by the central bank to avoid any undesired appreciation in the kiwi.”

Bonds

New Zealand’s 10-year bonds climbed 1.2 percent, pushing their yield down by 14 basis points to 2.48 percent. Comparable yields in Australia and South Korea dropped by at least six basis points to 2.04 percent and 1.53 percent, respectively.

The rate on similar-maturity U.S. Treasuries fell four basis points on Wednesday to 1.65 percent. Jeffrey Gundlach, the chief investment officer at DoubleLine Capital LP, said on CNBC that the yield will rise above 2 percent in 2016 and a Fed interest-rate increase in December isn’t a given. Bill Irving, co-manager of Fidelity Government Income Fund, said yields will remain low and there’s a 60 percent chance of a Fed hike by year-end.

Commodities

Crude oil for delivery in November rose 0.9 percent to $45.75 a barrel in New York, after rallying 2.9 percent in the last session. U.S. inventories fell by 6.2 million barrels last week, official data showed Wednesday, spurring optimism a glut will ease. OPEC members Saudi Arabia and Iran, whose rivalry derailed an oil supply accord earlier this year, held talks in Vienna a week before the organization and Russia meet Sept. 28 in Algeria to discuss measures to stabilise prices.

The post-Fed decline in the dollar boosted prices of industrial metals, with copper, aluminum and zinc climbing at least 0.8 percent in London. Nickel led gains with a 1.1 percent advance as investors weighed the prospect of more mine closures in the Philippines, the biggest exporter of nickel ore. The nation’s government said Wednesday that more than 10 suppliers will probably be suspended in addition to 10 that have already been halted after an environmental audit. Iron-ore futures jumped as much as 5.3 percent on China’s Dalian Commodity Exchange, the biggest gain in more than a month, and coking coal climbed to its highest since January 2014. Huatai Futures Co. said coal prices are being boosted by speculation of a shortage and that’s spurring gains across the steel supply chain. Steel reinforcement bar increased as much as 3.2 percent in Shanghai. [Bloomberg]

FTSE 100 Outlook and Prediction

For today I am expecting the bulls to be in control, certainly up towards 6902 – its possible that we may se a dip from there so I have gone for a short from that level for a dip back down to the pivot. Initially, we should see a dip down and find support at the 25ema on the 30min at 6868 – mainly as we are just hitting R1 at 6885 as I write this. Gold is just hitting the top of the 10 day Raff channel now at 1336, having enjoyed a good rise yesterday off the back of the Fed – so a dipping gold might be bullish for the FTSE. Talking of Raffs, the FTSE 20 day Raff is at 6896ish so its certainly going to be interesting to see what the market does around that 6900 level.

Generally all looks probable for a push higher, with the S&P possibly going for 2185 where we have the top of the 10 day Raff and also the daily coral which has just turned red. Another 25 or so points on that could well take the FTSE closer to 7000, and break though the 6900 today. Will be worth keeping an eye on.