Support 6420 6410 6391 6236 Resistance 6443 6460 6465 6525

Good morning I hope you had a good weekend. The main news was all fairly positive press after last weeks indices rising back to the 6450 area, helped also after China cut its benchmark lending rate. Mainly as the BoE have backtracked saying rate rises are are a “possibility not a certainty” but have urged UK households to prepare for tighter monetary policy now. We have dropped off a little from the top of the 10 day Bianca channel at 6465 so far though and have 6410 as initial daily support this morning with 6326 lower down as the bottom of the 10 day channel.

US & Asia Overnight from Bloomberg
Asian stocks rose after China’s central bank cut its benchmark lending rate, stepping up efforts to cushion a deepening economic slowdown.

The MSCI Asia Pacific Index gained 0.3 percent to 136.15 as of 9 a.m. in Tokyo after closing Friday at the highest since Aug. 19. The gauge climbed 9.7 percent this month through the end of last week as investors pushed back expectations for the first U.S. interest-rate increase and central banks signaled further measures will be enacted to stave off weak economic growth. Late on Friday, China said it would cut rates for the sixth time in a year, and lowered the amount of deposits banks must hold as reserves.

“The ongoing easing program is clearly aimed at supporting growth and as such, is a big positive,” said Shane Oliver, Sydney-based global strategist at AMP Capital Investors Ltd., which manages $113 billion. “Monetary conditions remain easy. This in turn should help see the global economic recovery continue.”

Japan’s Topix index gained 1.2 percent. Australia’s S&P/ASX 200 Index rose 0.3 percent and South Korea’s Kospi index added 0.4 percent. New Zealand markets are closed for a holiday, while markets in Hong Kong and China have yet to open.

China’s one-year lending rate was cut to 4.35 percent from 4.6 percent, the People’s Bank of China said on its website on Friday, while the one-year deposit rate will fall to 1.5 percent from 1.75 percent. Reserve requirements for all banks were lowered by 50 basis points, with an extra 50 basis point reduction for some institutions.

China’s Communist Party meets Monday to map out a blueprint for 2016-2020 in an economy confronting an era of sub-7 percent growth for the first time since Deng Xiaoping opened the nation to the outside world in the late 1970s.

The Bank of Japan and the Federal Reserve decide on monetary policy this week as central banks worldwide seek to revive slowing global growth and lackluster inflation. Traders see a 6 percent chance of a Fed rate increase this week, according to futures data compiled by Bloomberg.

E-mini futures on the Standard & Poor’s 500 Index slid 0.1 percent. The S&P 500 climbed 1.1 percent on Friday to cap a fourth weekly gain amid better-than-estimated earnings. [Bloomberg]

FTSE Outlook

For today there is initial support from a rising 30min channel at the 6420 area, with support at 6410 and 6391 below that. Resistance is initially at the daily pivot at 6442, with 6465 and then 6525 above that. I have plotted a fairly flat day with the arrows, with a slightly bullish bias and it will be interesting to see if 6410 holds if that area gets tested. I was looking at the dow earlier and there is a chance of 17750 on that while its at these levels, but with the media getting a bit excited after these recent rises, I am cautious about getting too over excited on the long side. Another dip might well occur from this sort of area (17750, 6500, 11000 dax) before any sort of year end rally so bear that in mind not he longer timeframes. I have gone for fairly conservative trades today with the trade plan, off the main support and resistance levels on the lower timeframes. Both the moving averages are currently bearish on the 10min and 30min, after the drop overnight. The ASX200 had a fairly bearish day, dropping from 5411 high to 5352 during their session. Slow drift down really, so we might see the same today.