FTSE 1oo Support 6738 6730 6724 6723 6710 6697 6695
FTSE 100 Resistance 6758 6762 6779 6800 6862

Good morning I hope you had a good weekend. Slight rise overnight which started just before the bell on Friday, with a rise off the 25ema on the 30min chart. The US rose after Friday’s weaker-than-expected reading on GDP. The 10 day Bianca channels are still pretty narrow, with resistance at 6762 and support at 6710 so I am still expecting a breakout of one of them soon. The 2 hour chart is just starting to look a bit more bullish with support around the 6740 area. Could be an interesting start to August. Fairly quiet on the news front, with most eyes focussed on the Fed and interest rates.

US & Asia Overnight from Bloomberg

Asian shares climbed with U.S. stock futures and the South Korean won rallied to a one-year high as reduced bets on U.S. interest-rate increases spurred appetite for higher-yielding assets.

The MSCI Asia-Pacific Index of stocks rose for a sixth day, with equity benchmarks climbing more than 0.6 percent in Hong Kong, Australia and South Korea. U.S. index futures climbed after Friday’s weaker-than-expected reading on gross domestic product. Japanese bonds extended their rout after the Bank of Japan on Friday refrained from increasing debt purchases. Crude rebounded from its biggest monthly loss in a year.

Global equities rallied in July to their best month since March on prospects central banks will add to stimulus or refrain from reducing it. Traders peeled back bets on a U.S. rate hike this year after data Friday showed annualized GDP rose 1.2 percent last quarter, less than half the 2.5 percent projected by economists. The Bank of Japan added to its easing last week and economists forecast policy makers in Australia and England will cut their benchmark interest rates from record lows this week. In Japan, Prime Minister Shinzo Abe may unveil details of his fiscal package on Tuesday.

“The market’s saying that any rate hike is likely to be delayed further; the dollar’s weakening, especially against the euro,” said Kelvin Tay, regional chief investment officer at UBS Group AG’s wealth management business in Singapore. “A lot of the G-4 currencies are at negative yields. That means that the emerging-market currencies, especially the higher yielding ones, will be more attractive.”

Stocks

The MSCI Asia Pacific Index rose 0.8 percent at 1:02 p.m. Tokyo time. In Australia, commodity stocks led the S&P/ASX 200 Index up 0.7 percent, while the Kospi index gained 0.7 percent in Seoul. Hong Kong’s Hang Seng Index surged 1.3 percent, while Chinese shares slid 1.1 percent.

Futures on the S&P 500 Index climbed 0.4 percent, after the underlying benchmark rose 0.2 percent on Friday in a second day of gains.

The Topix erased earlier declines to trade little changed, following a 6.2 percent advance in July.

“The very low amount of stimulus from the BOJ does leave the market clearly expecting a significant move from Prime Minister Abe in his announcement,” Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Pty in Sydney, said by phone. “Overall, we remain concerned about the impact of tighter U.S. policy, but that can easily be overwritten by a significant stimulus package from Japan.”

Currencies

The yen retreated 0.4 percent to 102.44 per dollar after soaring 4 percent last week. BOJ Governor Haruhiko Kuroda’s decision to aim low with his stimulus move raises the stakes for Abe to deliver on a pledge for “bold” fiscal stimulus on Tuesday, when the government is due to announce details of a more than 28 trillion yen ($273 billion) spending package.

The won increased 0.8 percent, touching its strongest level since June 2015, while the ringgit gained 1.1 percent after weakening 1 percent last month. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was little changed after sliding 1.3 percent last session.

“Just at a time when evidence was building that the U.S. economy was in a position for the Fed to again contemplate rate hikes, some weak domestic data or a global event quite quickly scuttles those plans,” Philip Borkin, a senior economist in Auckland at ANZ Bank New Zealand Ltd., said in a note to clients.

Most other major currencies maintained their gains from Friday, with Australia’s dollar up 0.2 percent at 76.09 U.S. cents following a 1.2 percent jump, and the euro steady at $1.1179 after strengthening 0.9 percent last session.

Bonds

Japanese 10-year notes fell for a second day after the BOJ on Friday left its bond purchases at 80 trillion yen a year. The yield on the benchmark securities climbed 6.5 basis points to minus 0.13 percent, after jumping 8 basis points at the end of last week for the steepest increase in three years.

The U.S. 10-year yield climbed two basis points to 1.48 percent, Bloomberg Bond Trader data show.

Commodities

Crude oil for September delivery rose 0.3 percent to $41.74 a barrel in New York, after slumping 14 percent in July. U.S. producers increased drilling for a fifth week amid a glut of crude and fuel supplies that are at the highest seasonal level in at least two decades.

Metals were mixed, with lead, nickel and zinc advancing while aluminum, copper and tin retreated. Nickel climbed 0.6 percent and zinc was up 0.5 percent, on the London Metal Exchange. Copper retreated 0.1 percent and tin fell 0.4 percent. [Bloomberg]

FTSE 100 Outlook and Prediction

First trading day of the new month so you would expect to see an initial rise as the new money flows in. However we have the 10 day Bianca channel with resistance at 6762 to start with, and on Friday we did quickly dip below the 10 day channel to test the 20 day (6693 level). As such there is still a bit of bear power around, albeit slightly weak. For today we have a cluster of supports around the 6730 area, then 6700. We have resistance at 6762 then 6800. Still a slightly confusing picture really, with argument for both a rise and a fall which doesn’t make writing this much easier!

It looks like another buy the dip day today, with the 30min chart showing 6725 as a good entry level on any opening dip, with 6700 below that. On the news front we have US ISM out at 3pm, expected at 53. Generally I am thinking a slow drift up today (famous last words!).