NFP today Asia rises China still expanding 6255 resistance and 6196 support

Support 6206 6204 6196 6152 6148
Resistance 6221 6227 6241 6253 6273 6318
Good morning. The FTSE didn’t quite reach the shorting area instead dropping from 6220 down to 6175 before bouncing back again. Slightly cautious ahead of the NFP and Fed today probably. However the S&P long at 2089 worked really well, running to the target, and then managed to push above 2100 and has held above it over night in a good sign for the bulls. A lot will depend on todays data though, but the FTSE breaking 6200 and also holding just above is a good sign for the bulls to push towards 6250+. But, time for the usual NFP Friday warning – it could do anything!

US & Asia Overnight from Bloomberg
Asian equities rose and the Japanese yen climbed toward a three-week high before U.S. jobs data that will shape expectations for the timing of the Federal Reserve’s next interest-rate hike. New Zealand’s dollar strengthened and Brent crude traded near $50 a barrel.

About three shares advanced for every two that fell on the MSCI Asia Pacific Index as the yen rose for a fourth day. The kiwi led gains among major currencies this week, supported by data showing prices of New Zealand’s commodity exports increased in May. The rand halted a three-day winning streak as South Africa awaited the outcome of an S&P Global Ratings review. Brent crude climbed to a seven-month high in the last session as a report showed U.S. stockpiles declined. Soybean futures rose to a 23-month high and Australia’s government bonds rallied.

U.S. stocks ended Thursday at levels last seen in November as signs of steady job gains in the world’s biggest economy bolstered speculation that the Fed will raise borrowing costs this month or next. Meetings of the European Central Bank and Organization of Petroleum Exporting Countries failed to have a lasting impact on financial markets and attention has shifted to Friday’s official report on American payrolls. Also on investors’ radars is the U.K.’s June 23 referendum on whether to remain in the European Union, with recent polls indicating growing support for an exit.

“The environment is not bad for risk assets and I expect it to continue, but all the attention is now on the Fed rate hike, including what impact a stronger dollar could have on emerging-market economies,” said Yusuke Kuwayama, a portfolio manager at Tokio Marine & Nichido Fire Insurance Co. in Tokyo. “If the payrolls tonight are strong, we’ll see markets further price in a rate hike by pushing short-term yields higher and giving the dollar a bit of a boost.”

Friday’s U.S. employment figures are forecast to show employers added 160,000 jobs in May, the same as in April. Fed Governor Lael Brainard will be the first U.S. central bank official to speak after the release of the data, while Chicago Fed chief Charles Evans will speak ahead of the report. Fed Chair Janet Yellen speaks Monday, having said a week ago that a rate increase was probable in coming months. Gauges of services output in the U.S. and the euro area are also due Friday.

Stocks
The MSCI Asia Pacific Index was up 0.2 percent as of 1:50 p.m. Tokyo time. Benchmarks in Hong Kong, Singapore and Indonesia climbed to one-month highs, while those in India and Thailand were headed for their best closes since at least October. The Shanghai Composite Index was set for its first weekly gain in more than a month. Japan’s Topix lost 1.4 percent this week as Prime Minister Shinzo Abe failed to provide details of a fiscal stimulus package when he announced a delay to a sales-tax increase.

Noble Group Ltd. tumbled 13 percent in Singapore after the commodities trader announced a rights issue to raise about $500 million at a 63 percent discount to Thursday’s close. Takata Corp. climbed more than 2 percent in Tokyo as private-equity firms including Bain Capital and KKR & Co. evaluate bids for the scandal-ridden airbag maker.

Futures on the U.K.’s FTSE 100 Index gained 0.4 percent. Contracts on the S&P 500 were steady after the measure climbed 0.3 percent last session to break 2,100 points, a level that has provided a cap to two rallies in the past eight months. It’s still 1.2 percent below the all-time high reached in May 2015.

Currencies
The yen rose 0.3 percent versus the greenback, extending this week’s advance to 1.6 percent. The kiwi strengthened 0.3 percent, set for a 1.8 percent weekly gain, as ANZ Bank New Zealand Ltd. said its commodity price index climbed 1 percent in May.

The Bloomberg Dollar Spot Index was down 0.2 percent for the week. Investors are paying close attention to U.S. data after Fed officials indicated a potential interest-rate hike as soon as this summer was contingent on continued improvement in the economy. Figures released Thursday by the ADP Research Institute indicated 173,000 workers were taken on last month in America, while filings for unemployment benefits declined for a third consecutive week, according to separate data.The rand was little changed, after appreciating 1.5 percent in the last three days. South Africa faces the prospect of having its credit rating cut to junk when S&P announces the outcome of a review on Friday.

The British pound was poised for a 1.4 percent weekly loss. The currency sank in recent days as successive polls indicated British voters are becoming more inclined to vote in favor of leaving the EU.

The yuan was set for a fifth weekly loss, its longest losing streak since December. There’s a growing risk that capital outflows from China may accelerate as the yuan weakens, spilling over into global markets and causing broad selloffs similar to those in January and August, according to Goldman Sachs Group Inc.

Commodities
Brent crude was little changed at $50.03 a barrel. The third drop in U.S. crude inventories in four weeks tempered the impact of OPEC’s decision to stick to a policy of unfettered production, turning down a proposal to adopt a new ceiling on output.
Zinc fell for the first time in seven days on the London Metal Exchange. The metal surged more than 3 percent this week amid speculation that dwindling mine supply will fall short of demand. Net-long positions in LME futures are close to an 11-month high seen in May, indicating that investors continue to bet on a rally.

Soybean futures gained 0.4 percent, taking this week’s advance to almost 6 percent. Prices surged Thursday amid forecasts for dryer weather in the U.S. growing area.

Bonds
Australia’s 10-year bonds rose for a third day, pushing their yield down by four basis points to 2.23 percent, near a record low. The yield on similar-maturity U.S. Treasuries was little changed at a two-week low of 1.80 percent. [Bloomberg]

FTSE 100 Outlook and Prediction

So, NFP Friday once again with the jobs data likely to give some clue as to how soon the US will raise their interest rates again. Or not. For today I am looking at a rise towards 6250, most likely from the 6200 area if we get an initial dip. We have the daily pivot at 6204, we have the 2 hour chart now bullish, with the Hull MA showing support at 6196, and the 30min trend is now up with the bounce from 6175 holding yesterday. Initially, the bulls will need to break 6227 where we have some resistance on the 2hour chart, however, if they mange that then a rise to 6250 looks likely. At that point it becomes a little bit less clear, probably as it may coincide with NFP news release and as such I have plotted 2 pink arrows – meaning it could do either! Rise to 6275+ or drop back to 6200! If in doubt stay out, or just trade up till lunchtime would be my advice. Anyway, buy the dip this morning is my preferred play.