FTSE 100 Support 6516 6480 6387 6350 6307 6238
FTSE 100 Resistance 6559 6585 6605 6636 6653

Good morning. Well, didn’t see that coming yesterday afternoon. Good long entry at 6310 and then short entry at 6410 which got blown apart by Carney’s comments about possible rate cuts in the summer and further measures as well. Bad timing on that short entering. Sterling continued to fall initially, contributing to the FTSE rise from the 6310 area. The US is closed on Monday for their Independence Day holiday, so we may see a bit less bullishness today ahead of that. European markets also rose at the possibility of central bank stimulus, with the DAX climbing 0.7pc and the CAC 40 advancing 1pc. Wall Street also enjoyed its third consecutive day of rises, with US stock rising by more than 1pc.

US & Asia Overnight from Bloomberg

• Yen rallies as data show ongoing decline in Japan prices
• China’s official PMI matches estimates, Caixin gauge misses

Asian stocks rose, on track for their best week since April, as investors bet central banks will limit the fallout from the U.K.’s decision to leave the European Union. Oil resumed gains with the pound.

Shares from Japan to Korea drove a third day of increases in the region, with markets in Hong Kong and Thailand shut for holidays. The yuan extended its weekly slide versus the greenback after a private gauge of China’s manufacturing industry unexpectedly fell. Oil climbed following its best three months since 2009, buoying the Malaysian ringgit, while sterling and the yen trimmed weekly declines. Metals rose, with silver climbing to the highest since September 2014. Bond yields in Japan and Taiwan fell to all-time lows.

Pledges from central banks around the world helped halt a two-day rout in global markets following the vote in favor of Brexit, which took the pound to a three-decade low and sent global stocks down the most since the financial crisis. Governor Mark Carney signaled the Bank of England could cut interest rates within months to shield the British economy, and odds of the Federal Reserve raising borrowing costs as planned this year have dropped to less than 10 percent, according to Fed funds futures.

“Markets are reacting positively to the supportive interest rate environment,” Chris Green, director of economics and strategy at First NZ Capital Group Ltd. in Auckland, said by phone. “With interest rates remaining low for longer, the concern is what policy options are left for central banks if we see an even softer patch for the global economy.”

Stocks

The MSCI Asia Pacific Index added 0.4 percent as of 2:06 p.m. in Tokyo, on track for a 3.4 percent climb on the week.

The Topix index gained 0.6 percent in Tokyo, while South Korea’s Kospi index jumped 1.1 percent. Japan reported a raft of data before markets opened, with both the core consumer price index and the jobless rate matching economists’ estimates, while the Tankan survey of business sentiment was slightly better than expected.

The Shanghai Composite Index was little changed. China’s official factory gauge retreated to the 50 dividing line between improvement and deterioration last month, while a private gauge came in at 48.6, missing the median economist estimate of 49.2. A measure of services perked up, underscoring the two-speed pace of growth in the world’s second-largest economy.

Futures on the S&P 500 Index dropped 0.1 percent following the underlying index’s 1.4 percent surge Thursday, which left it up 1.9 percent in the quarter and erased its June decline. Contracts on the FTSE 100 Index added 0.9 percent, rising a fourth day. The European Central Bank is considering loosening the rules for its bond purchases to ensure enough debt is available to buy in the aftermath of the Brexit vote, according to euro-area officials familiar with the discussions.“There’s no doubt that central bankers are helping to underpin this market and take some of the risk out,” said Quincy Krosby, a market strategist in Newark, New Jersey, at Prudential Financial Inc., which oversees about $1.2 trillion. “This is a commitment from central banks to keep the liquidity flowing into the market, and that’s crucial.”

Currencies

The pound strengthened 0.1 percent to $1.3325 after falling 0.9 percent on Carney’s comments alluding to a potential rate cut. After being torpedoed on the Brexit result and falling to a 31-year low, sterling has recovered somewhat, paring its drop this week to 2.6 percent.
For more on the political to-ing and fro-ing following the Brexit vote, click here.

The yen snapped a three-day retreat, climbing 0.3 percent to 102.83 per dollar after the Japanese data showed core consumer prices dropped for a third straight month, and household spending also declined.

The won jumped a fourth day, poised to climb 2.9 percent in the week, as the ringgit touched an almost two-month high.

The yuan slipped 0.1 percent to 6.6530 per dollar, and is heading for a weekly slide of 0.5 percent. China’s currency weakened more than 3 percent last quarter, the most since the nation unified the official and market rates at the start of 1994.

Commodities

West Texas Intermediate crude increased 0.6 percent to $48.62 a barrel, clawing back some of last session’s 3.1 percent slump. The commodity jumped 26 percent in the three months through June as declined in U.S. supply fueled speculation the global oil surplus is easing.
Copper for three-month delivery fell after the official China PMIs, before reversing course to add 0.3 percent. Nickel climbed 0.7 percent and zinc rose 1 percent. The London Metal Exchange LMEX Metals Index rallied the most in two years last quarter.

Gold headed for a fifth weekly gain and silver jumped as much as 2.9 percent to the highest since September 2014.

Bonds

Treasuries and Asian bonds rallied, with Taiwan’s 10-year yield dropping to a record after the central bank lowered its benchmark interest rate in a widely expected decision. Japan’s 10-year yield tumbled to an unprecedented minus 0.255 percent. Two- and five-year yields also set lows as the market surged.

Treasury 10-year note yields fell two basis points to 1.45 percent as of 1:49 p.m. in Tokyo, according to Bloomberg Bond Trader data. [Bloomberg]

FTSE 100 Outlook and Prediction

Well what a week this has been. When the leave result came through last Friday I don’t think many expected us to be knocking on the door of 6600 this week, but rather 5500. Anyway, its been a good run for the bulls, helped with rate cut and stimulus talk – can’t beat Central Bank intervention to keep the markets rising. For today we have the pivot at 6480 for support, and resistance at 6590 from the rising 30min channel. The long off the pivot worked well yesterday and thats probably a good level to try a long today if we get an initial dip. However, I am more inclined to think that we get a rise to the resistance level to start with today, before a more gradual decline on profit taking this afternoon. The US is closed on Monday so we may see a dip later on profit taking in the US. It’s also the first of the month – typically sees bit of a rise first thing as new money flows into shares. The 10min chart has been on a weak sell overnight from the 6560 level, but is within a rising channel – with support at 6500 and resistance at 6650 and 6700 – so if it gets really bullish again then we might see both these levels! Keeping it tricky to call that’s for sure.