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Shares in British banks rallied Thursday, lifting the blue-chip FTSE 100 after the Bank of England stunned investors with an interest rate hike, the world’s first major central bank to do so since the pandemic hit the global economy last year.
The FTSE 100 gained 1.3pc, breaking a six-day slump, while shares in Lloyds Banking Group, Barclays, Standard Chartered and HSBC surged between 3.8pc and 4.6pc.
Stocks fell Friday amid a drop in technology shares as tightening monetary policy buffets sentiment, while growth risks from the omicron virus variant helped to sustain demand for Treasuries.
MSCI Inc.’s Asia-Pacific index was down for the fifth session in six, with Chinese tech stocks sliding more than 2%. U.S. and European equity futures were in the red after the Nasdaq 100 sank the most since September. The Federal Reserve’s pivot toward reducing outsized stimulus has sapped investor ardor for the more richly valued tech plays that dominate the U.S. gauge.
The 10-year Treasury yield pared some of a decline from U.S. hours. Continued demand for Treasuries potentially reflects worries that the fast-spreading omicron strain will spark curbs that dim the economic outlook.
The dollar flirted with a third-straight weekly drop. Oil was lower for the first time in three days and Bitcoin fell below $48,000.
As omicron kicks in, it’s beginning to look a lot like March 2020, as workers stay away from the office and prevention measures are reinstated. In New York offices are sitting empty, shows have been cancelled and restaurants are closing; City of London workers are opting not to commute as U.K. case numbers hit new highs, prompting France to ban tourists from the country; and Canadians are being warned against all foreign travel. Meanwhile, U.S. health advisers said messenger RNA vaccines made by Moderna and Pfizer are preferable for use in adults over Johnson & Johnson’s shot.
FTSE 100 live outlook prediction analysis for 17th December 2021
Buckle up for OPEX and Friday! The FTSE100 was actually fairly robust yesterday as the US markets dropped off. The BoE rate hike signalling a desire to gain control of the economy. Albeit a small increase but the first baby step in trying to tame inflation – which as we all know is higher than 5.1%.
Initial resistance today is at 7245 as we have the daily pivot and the 200ema, along with the 25ema on the 30m here so we could see a drop down to test that 7210 level today. That is the 2hour support still and we didn’t drop down to test that yesterday in the end. The bulls will of course be keen to defend that level as it could act as a decent springboard for next week. Just need the US markets to play ball!
Above the 7245 level then the 30m coral is at 7260, and then daily resistance at 7275 above that. We could see a stutter here as this may be a point that the bears have another crack at.
We do have option expiry today as well so expect some volatility at 10:10 as the various contracts roll over. We could see a spike up and then a retrace.
Above the 7275 then the R2 level of 7309 is next up. The bulls will certainly be keen to get the price above this though as it would bode well to add another 200 points for next week.
Restrictions starting to be faded in though with Wales first out the blocks closing nightclubs from Boxing Day. A few members (that work in hospitality) in the live room have heard of 27th for extended restrictions. All crowded places are likely to face restrictions but we may stop just shy of full on lock downs. Hopefully anyway!
For the bears, they will be looking to break it below the 7210 level as mentioned as that would open up another test of the 7185 level which held well recently (ignoring the stop hunt just below this key support). A break of that though does get the cat amongst the pigeons and a bearish end to the week wont help a possible rally next week! The bulls may be helped by the S&P bulls defending the 4630 level though.
Below 7185 then 7150 S3 would probably get tested as the momentum would swing round to the bears on a definitive break of that key level.
So, could be an interesting one today – Opex Friday so stay nimble. I maintain my bullish bias for the moment on the FTSE100. Buying the dips really but small shorts off the resistance levels! Lower volume and key news events have amplified the movements this week for sure though. Have a great weekend and good luck today.
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