FTSE 100 Support 6784 6769 6759 6663
FTSE 100 Resistance 6824 6837 6850 6857 6863 6899

Good morning. That was a bit of a lethargic rise yesterday from the 6750 level to the 6800 level. Overnight has been fairly flat, with Janet Yellen vowing to complete her full term as chairman of the US Federal Reserve and she also defend the institution’s independence, swatting aside vitriolic attacks on her policies by Donald Trump during the campaign. “I was confirmed by the Senate for a four-year term, which ends in January 2018, and it’s fully my intention to serve out that term,” she told Congress.

Yellen gave the clearest signal yet that the Fed will raise rates a quarter point to 0.75pc in December, warning that waiting too long could store up serious problems and leave the bank scrambling to catch up later. “It could end up having to tighten policy relatively abruptly,” she said. The Fed boss showed little concern about the surging US dollar, insisting that the latest rebound in economic growth and rising inflationary pressures implied rate rises “relatively soon”.

US & Asia Overnight from Bloomberg

The dollar extended its advance after Federal Reserve Chair Janet Yellen signaled an interest-rate hike could be imminent, while metals declined. Most Asian stocks rose, with Japan shares rallying to the cusp of a bull market.

The Bloomberg Dollar Spot Index climbed 0.3 percent, strengthening for the seventh time in eight days and trading at its highest level since February. The Korean won was the biggest decliner in Asia, followed by the yen. That helped Japan’s Topix index to one of the steepest equity gains in the region, on track for its longest winning streak more than a year, after the S&P 500 Index came within four points of a record on Thursday. The greenback’s strength weighed on oil, gold and copper, with the industrial metal set for its first weekly slide in four weeks. Sovereign debt from New Zealand to Japan fell.

In her first public statement since the U.S. election, Yellen told lawmakers that the Fed is close to boosting borrowing costs as the economy continues to gain traction. The comments torpedoed Treasuries, while American financial stocks pushed their rally since Donald Trump’s presidential victory back above 10 percent Thursday. Speculation that he will boost fiscal stimulus continues to lift industries that are perceived to benefit from economic growth. The president-elect met with Japanese Prime Minister Shinzo Abe in New York late on Thursday.
“Right now it is a dollar-dominated story,” Philip Borkin, a senior economist in Auckland at ANZ Bank New Zealand Ltd., said in a client note. “But beyond a Fed rate hike next month, many questions remain over the path of policy going forward – for both fiscal and monetary.”

China reported on Friday that new home prices, excluding subsidized housing, rose in 62 out of 70 cities in October from a month earlier. Thailand issues figures on foreign-currency reserves today.

Stocks

The Topix index rose 0.5 percent as of 12:54 p.m. Tokyo time, extending gains from a February low to almost 20 percent.
Telecommunications and technology stocks drove Australia’s S&P/ASX 200 Index up 0.2 percent, while South Korea’s Kospi index slipped 0.2 percent. New Zealand’s S&P/NZX 50 Index climbed 0.7 percent.

Hong Kong’s Hang Seng China Enterprises Index rose 0.1 percent, while the Shanghai Composite Index dropped 0.3 percent on the mainland.

S&P 500 futures slipped 0.1 percent to 2,181.25 Friday, following a 0.5 percent advance in the underlying benchmark Thursday. Bank shares led the index to its highest level since Aug. 15, when the gauge reached an all-time high.

“Markets have arrived at a point where they need to weigh the risks of being caught out by the potential stimulatory impacts of the Trump administration’s policies, against the risk of being caught by those policies not being implemented,” Ric Spooner, chief market analyst in Sydney at CMC Markets, said in an e-mail.

Abe said Trump was a trustworthy leader after meeting with the U.S. president-elect in New York. The Japanese premier said his talks with Trump took place in a “warm atmosphere” inside Trump Tower, potentially mitigating concern over the Republican’s election back home. During the campaign, Trump vowed to drop the Trans-Pacific Partnership trade deal and also accused Japan of manipulating the yen.

Currencies

Bloomberg’s dollar gauge, which tracks the greenback against 10 major peers, climbed for a third session.

The yen weakened 0.3 percent to 110.46 per dollar and is on track for its second weekly retreat of more than 3 percent.

“The fact that she didn’t push back against market expectations for a December hike is perhaps the most significant takeaway,” said Jack Spitz, managing director for foreign exchange at National Bank of Canada in Toronto, referring to Fed Chair Yellen. “The dollar is higher as a result.”

Odds on the Fed raising the benchmark rate are now at 96 percent, up from 80 percent a week ago and less than 65 percent a month ago, according to futures trading tracked by Bloomberg.

The won slipped 0.5 percent, while the Thai baht and the Philippine peso lost 0.4 percent. China’s yuan slid 0.3 percent to its weakest level since June 2008.

Malaysia’s ringgit retreated 0.4 percent. The nation’s central bank said it’s intervening in the currency market.

Bonds

Australian government bonds led the retreat in the Asia-Pacific, with yields on 10-year notes up 13 basis points to 2.7 percent.
Similar-maturity New Zealand debt yielded 3.08 percent, up 11 basis points, while yields on 10-year Japanese bonds gained 2 basis points to 0.03 percent.

Yields on Treasuries due in a decade increased three basis points to 2.33 percent, extending the eight basis point jump last session. [Bloomberg]

FTSE 100 Outlook and Prediction

Its looking like it will be fairly bullish today so far with things holding up overnight, Yellen committing to serve her full term, and a possible rate rise next month. We have the 20 day Bianca channel for resistance at 6837 to start with, (6860 above this though) which could well see some bulls taking profits and a run down to the 2 hour support at 6770 area – we have both the coral and the Hull moving average at this level. The SP stalled a bit at 2185 resistance yesterday but hasn’t really reacted to the downside very much so could see further rises today.

Back to the FTSE 100 and the 30min coral held well at 6755 yesterday after turning green about midday.I was expecting a bit more of a dip towards 6725 but it was a very flat morning. Since the election the markets are very much in a holding pattern and there isn’t much in terms of a clear direction. Messy you could say from a technical perspective! Anyway, for today (with the usual Friday shenanigans likely) I am watching the 6837 and 6863 resistance levels, and the 6784 and 6770 support areas.