Support 6160 6158 6153 6130 6002 Resistance 6189 6217 6275 6311 6330

Good morning, I hope you had a good weekend. Here we are then, the week when hopefully the Fed will give some clearer direction on interest rates (on Thursday, 17th). Will they or won’t they put up rates sooner rather than later? Certainly going to be a choppy week anyway. Data still shows China slowing down, though could lead to more stimulus, whilst the West is hardly bubbling away with confidence and booming economies. The main UK news over the weekend was of course the Labour Leadership result who have now gone far left with the expected win of Jeremy Corbyn. In other news the BIS has warned about the dangerously high debt levels – repeat of 2007/2008 looming as no-one seems to have learnt from that and this time the silver bullets have been used up?

US & Asia Overnight from Bloomberg
Asian stocks rose, after posting their first weekly advance since July, as investors awaited this week’s Federal Reserve policy decision and weighed mixed economic reports from China.

The MSCI Asia Pacific Index added 0.3 percent to 127.69 as of 9:01 a.m. in Tokyo. China’s fixed-asset investment rose at the slowest pace in 15 years and industrial production trailed analyst estimates, while August retail sales topped projections, reports published over the weekend showed. Economists are about evenly split on whether the Fed will raise rates Sept. 17, as traders hold bets on a move at 28 percent.

“Trading will remain volatile ahead of the FOMC meeting,” Bernard Aw, a strategist at IG Asia Pte in Singapore, said by phone. “Sunday’s data reinforced concerns about China’s economy slowing down. Investors may expect more stimulus in the pipeline, which could provide some support to Chinese equities.”

Japan’s Topix index climbed 0.3 percent, as did South Korea’s Kospi index. Australia’s S&P/ASX 200 Index rose 0.4 percent and New Zealand’s NZX 50 Index increased 0.4 percent. Markets in China and Hong Kong have yet to start trading.

China’s industrial output rose 6.1 percent in August from a year earlier, the National Statistics Bureau said Sunday, below the 6.5 percent median estimate of economists surveyed by Bloomberg. Fixed-asset investment climbed 10.9 percent in the first eight months, compared to a median projection of 11.2 percent. The weaker industrial and investment figures underscore the challenge the government faces in meeting its growth target of 7 percent this year, as exports decline and producer price deflation deepens.

Some Nervousness
“The weaker-than-expected Chinese data may cause some nervousness for markets,” Vasu Menon, vice president of wealth management at Oversea-Chinese Banking Corp. in Singapore, said by phone. “On its own, it may not cause significant declines as the Chinese government has said they will act to prevent a slump. That reassurance should prevent a big selloff.”

E-mini futures on the Standard & Poor’s 500 Index added 0.6 percent. The underlying U.S. equity benchmark index rose 0.5 percent on Friday.

Singapore markets will resume trading today after a holiday on Friday when the nation held an election that gave the People’s Action Party of Prime Minister Lee Hsien Loong a large parliamentary majority. [Bloomberg]

FTSE Outlook

I am thinking a V shaped day today, though its a tricky one to call whilst we await the fed news on Thursday. There is a pretty decent looking channel on both the 10 min and the 30min charts with support at 6135/6140 so I think a tentative long around this area could work out, though there is a possibility that we drop to the bottom of the 10 day Bianca soon – 6002 for today. The longer term charts – 2hr, daily – are still showing bearish so the bulls really need to break and hold above 6200 for a hope of 6400 in the next few sessions. If the Fed don’t raise rates this month that might be enough to give them that final push higher. Medium term there is still some downside coming I feel, with the potential for 5700. Generally though I am thinking 6400 before 5700, if the bulls can break 6200. The reason for that is the 10 day Raff is now heading up too, with the resistance at 6330 for today.