Good morning, hope you had a good weekend. Friday played out as expected with the rise to 6775 so well done those that emailed to say you got on it.
No real massive financial news over the weekend; Juncker is now head of the EC despite Cameron’s objections; and worries over low interest rates and a housing bubble persist.
The FTSE is looking at opening right on the 6775 resistance level that we had from Friday, above this 6804 is the next level to watch. With the pivot support at 6753 we are going to have a tight range initially, which will break soon, probably to the downside over the summer.
Asia Overnight from Bloomberg
Emerging-market stocks rose, with a benchmark gauge heading to its biggest quarterly advance since September 2012, while the yen gained and South Korea’s won hit an almost six-year high. Oil fell on speculation violence in Iraq won’t curb output from OPEC’s second-biggest producer.
The MSCI Emerging Markets Index added 0.4 percent by 12:13 p.m. inTokyo, heading for a 5.6 percent gain since the end of March. Standard & Poor’s 500 Index futures were little changed, with the U.S. benchmark one trading day away from completing the longest stretch of quarterly gains in 16 years. The yen traded at a five-week high versus the dollar, which bought 1,011.55 won, the least since 2008. West Texas Intermediate crude oil lost 0.3 percent and Brent fell 0.2 percent.
A gauge of world equities is heading for a fifth straight monthly advance, the longest streak since 2007, after closing at a record on June 19. Sectarian fighting in Iraq hasn’t spread to the south, home to more than three-quarters of the nation’s oil production. Euro area inflation is due today, three weeks after the introduction of unprecedented stimulus and manufacturing and house sales figures are due in the U.S.
As regards oil prices, “we’ve already started to see the risk premium easing off,” Tom James, the Dubai-based managing director of Navitas Resources, said by phone yesterday, referring to oil. “Markets are seeing there’s been no blockage to exports, and that Saudi Arabia would likely supply any shortfall if they need to.”
The MSCI All Country World Index was little changed today, heading for a 1.6 percent increase this month. The emerging-markets gauge rose to 1,050.07, the highest since June 19, while a measure ofAsia-Pacific (MXAP) equities was little climbed 0.1 percent after rising the last seven weeks.
Hang Seng
Hong Kong’s Hang Seng Index increased 0.3 percent and a gauge of Chinese shares in the city added 0.8 percent. The Shanghai Composite Index climbed 0.5 percent while South Korea’s Kospi index was 0.4 percent higher.
The Topix index lost 0.1 percent in Tokyo as the yen rose a fourth day, adding 0.1 percent to 101.28 per dollar, the weakest since May 21. The currency last week strengthened through the 200-day moving average versus the greenback, seen as a key technical barrier to further gains.
Brent slipped to $113.05 a barrel today, after losing 1.3 percent last week. The European benchmark is up 3.4 percent in June, its third straight monthly advance.
Russian military advisers have helped prepare Iraq’s air force to use five newly delivered combat planes. Government ground forces pressed on with an offensive to drive Sunni Muslim fighters of the Islamic State of Iraq and the Levant from the northern Iraqi city of Tikrit.
FTSE Outlook
With Fridays rise and a flat open Sunday night I still feel a little bit optimistic that we will shortly be testing the top of the Bianca channels around the 6810 area. Initial resistance is where we currently are at 6775, so I think we will see a dip down towards the pivot area from here, which is 6753. If the bulls can defend that and gain some traction then we should get a rise back to 6775, and probably break it to test the 6804 level and the top of the Bianca channels around 6810/6815. We also have the daily Raff channels at that area so I wouldn’t be getting too bullish just yet – we have had a great bounce off the bottom of the channels in just a few sessions, (low of 6700 hit 26th June). That 6810 area might be a pretty good swing short area, as there are still jitters about and the climb off 6700 channel bottom has been quite quick.
Don’t think ti will test today (famous last words) but if 6700 breaks then we could be starting a decline to 6500 (though 6670 would be support first – bottom of the Raffs).