FTSE 100 Support 6716 6715 6704 6672 6665 6657 6609
FTSE 100 Resistance 6768 6773 6785 6858 6866

Good morning. Was a day for the bulls yesterday with a fairly steady rise for most of the day. Managed to get a few points with the short early in the day, but gold was the standout performer in terms for he trade plan, with a decent drop off the 1326 short level to hit target. The Bank of England unanimously voted to leave interest rates unchanged this month but said it could move to cut rates again, as soon as November, despite the Brexit bounceback. The MPC’s nine rate setters were unanimous in their decision to keep rates on hold at 0.25pc. It also voted 9-0 to keep the bank’s bond-buying programme target at £435bn and said it would continue with its plan to buy up £10bn worth of corporate bonds. The central bank sees economic growth at 0.3pc in the three months to September-end, up from a previous forecast of 0.1pc. It also warned it could cut its benchmark lending rate again this year. [Telegraph article]

US & Asia Overnight from Bloomberg

Asian shares rose from a six-week low after Apple Inc. drove a rebound in U.S. equities and traders pared the probability that the Federal Reserve will raise interest rates this year to less than 50 percent. The dollar weakened versus most higher-yielding currencies and oil fell.

The MSCI Asia Pacific Index advanced for the first time in seven days, with markets in half of the region’s 10 biggest economies shut for holidays. South Africa’s rand and the Australian dollar strengthened, while crude extended losses below $44 a barrel amid concern about a glut. Benchmark bonds in Australia and New Zealand were headed for their biggest weekly slides in at least five months.

Stocks, bonds and commodities all lost ground this week amid concern central banks in Europe and Japan are becoming hesitant to boost stimulus that’s so far done little to revive growth and inflation. Analysts are split over the likelihood of further easing when the Bank of Japan concludes a policy meeting on Wednesday. The Federal Reserve has a decision due the same day and the chance of an interest-rate hike has been all but killed off by Thursday data showing declines in U.S. retail sales and factory output.

“Expectations of what the BOJ might announce next Wednesday, be it more easing or more tightening, are unprecedented in their divergence,” said Christopher Wood, chief equity strategist at CLSA Ltd. “The result is even more uncertainty than normal, creating a potentially extremely perilous environment for macro speculators.”

The U.S. has updates on inflation and consumer sentiment coming on Friday, reports that may further sway expectations for the timing of the Fed’s next interest-rate increase. Russia’s central bank is forecast to cut its benchmark rate by half a percentage point to 10 percent at a policy review, while European Union leaders are meeting in Bratislava to discuss the bloc’s future path.

Stocks

The MSCI Asia Pacific Index was up 0.5 percent as of 12:11 p.m. Tokyo time, trimming this week’s slide to 2.3 percent. Japan’s Topix index rose 0.4 percent, while benchmarks in Australia, New Zealand and Singapore gained at least 0.8 percent. Markets in mainland China, Taiwan, Malaysia, South Korea and Hong Kong are closed for holidays.

Japanese companies that are suppliers to Apple surged after the U.S. company’s shares climbed to their highest level of the year amid growing optimism over the iPhone 7’s market reception. Japan Display Inc. soared 11 percent, while Alps Electric Co. jumped 6 percent. Futures on the S&P 500 Index fell 0.1 percent, after the benchmark rallied 1 percent on Thursday.

Currencies

The rand rose 0.3 percent, the best performance among major currencies, and the Aussie was up 0.1 percent. The Bloomberg Dollar Spot Index retreated for a third day.

Futures prices put the probability of a Fed rate hike next week at 18 percent following Thursday reports that showed U.S. retail sales declined 0.3 percent in August from the previous month and industrial output dropped 0.4 percent. The chance of a rate rise this year has slipped below 50 percent for the first time in a month.

“Near term, the dollar is likely to come under pressure as the Fed stands pat next week,” said Rodrigo Catril, a currency strategist at National Australia Bank Ltd. in Sydney. “However, as we look towards the end of the year, we still see a resurgence in dollar strength as the Fed prepares the market for a December hike.”

The yen was little changed at 102.07 per dollar, set for a 0.6 percent weekly gain. Just over half of economists surveyed by Bloomberg anticipate the BOJ will ease monetary policy further on Sept. 21, with an interest-rate cut seen as the most likely option.

Commodities

Crude oil fell 0.6 percent to $43.66 a barrel in New York, extending its weekly slide to almost 5 percent. OPEC members Libya and Nigeria, whose supplies have been reduced by domestic conflicts, are preparing to boost exports within weeks. The oil surplus will last longer than previously thought as demand growth slumps and output proves resilient, the International Energy Agency said Tuesday.

Nickel rose 0.3 percent in London, paring its biggest weekly loss of the year.

Soybeans in Chicago are down more than 3 percent for the week amid speculation that a record U.S. harvest will cap prices. Corn and wheat also lost ground on expectations for ample supply.

Bonds

U.S. Treasuries were little changed, with notes due in a decade yielding 1.69 percent. Similar-maturity notes in Japan yielded minus 0.035 percent, compared with minus 0.02 percent a week ago.

Australia’s 10-year bonds dropped this week, pushing their yield up by 15 basis points to 2.12 percent. New Zealand’s yield jumped 21 basis points to 2.56 percent. [Bloomberg]

FTSE 100 Outlook and Prediction

I have a fairly simple plan for today and that is to short the 6770 area as we have a few resistance levels there, and it would be the first touch of the 25ema on the daily chart. That is often a useful moving average to watch and more times than not it gets a reaction and is currently showing a bearish entry level.

We have the daily pivot for support at 6705, though I think if we get an initial drop back early today then the 200ema at 6715 will act as support for a rise towards that 6770 area. The 2 hour chart is still bullish, though its taken the bulls a while to get going, since managing to hold the 6650 low this week. The bulls have been helped by the news that US interest rate rises are less likely in the near term, and the BOE might cut rates further (just words at this stage to make the market bounce I suspect, after the recent falls. Carney does that a lot).

If the bears were to break the 6705 pivot area then a decline to the 6650 lows is likely, and 6600 is still on the radar for the moment.