Support 6526, 6500, 6460, 6423 Resistance 6591, 6597, 6629, 6650, 6721, 6750

Good morning. Hope you had a good weekend. Well here we are, Christmas week…. will be pretty quiet I imagine as most people ended on Fridays for the Christmas holidays. We had a good final bounce on Friday and we are just testing the top of the daily Bianca 10 day at 6597 at the moment – so maybe a little bit of a dip going into the start of this week. Next year is certainly going to be interesting! In the short term we have an argument brewing between the US and North Korea over a film! Obviously slightly more to it than that but you know what I mean. All the while, Russia is lurching towards the cliff edge. The equity bounce that started on the 16th at 6150 could run a little bit higher but I think we have some more bearishness waiting in the wings.

Asia Overnight from Bloomberg
Asian stocks rose, with the regional index headed for its steepest three-day advance in almost two months, as commodity shares increased amid an extended rally in crude oil. The dollar matched a two-year high versus the euro.

The MSCI Asia Pacific Index climbed 0.7 percent by 1:49 p.m. in Tokyo, bringing its gain since Dec. 18 to 3.1 percent. Australia’s S&P/ASX 200 Index (MXAP) jumped 1.7 percent and China’s benchmark stock index surged to a four-year high. Standard & Poor’s 500 Index futures were little changed. Crude rose for a second day. Indonesia’s rupiah headed for its longest rally since February and ruble forwards strengthened. Yields on 10-year Japanese debt fell to the lowest level since April 2013.

The Federal Reserve said last week that it would be patient over interest-rate increases, while signaling borrowing costs could be raised as early as April, spurring a surge in global stocks and declines in U.S. Treasuries. The Bank of England releases minutes of its last meeting today, while data tomorrow may show U.S. growth was faster than initially estimated last quarter. Saudi Arabia’s oil minister said he’s is confident crude prices will rebound as demand recovers.

“In general, investors seem to be feeling that it’s safe to buy after the Fed’s shown that they’re not in a hurry to raise rates,” Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo, said by phone today. How oil “might move towards next week hasn’t become clear, so it could still disrupt markets.”

Oil Moves
Brent oil added 1.6 percent to $62.33 a barrel, extending Dec. 19’s 3.6 percent surge, the most since October 2012. The oil blend settled at $59.27 Dec. 18, the lowest close since May 2009 and is still down 44 percent this year. West Texas Intermediate crude gained 1.5 percent to $57.99 per barrel.

While currently staging a rebound, crude is still in a bear market as the largest U.S. oil output in 30 years collides with slowing global demand for the commodity amid signs of decelerating growth from China to Europe.

Saudi Oil Minister Ali Al-Naimi said at a conference in Abu Dhabi at the weekend that the oil market will recover and fossil fuel will remain the main source of energy for decades to come. Mohammed Al Sada, Qatar’s energy minister, called on producers outside of OPEC to cut their “irresponsible” output on the sidelines of the conference. The Organization of Petroleum Exporting Countries last month refrained from reducing its production target of 30 million barrels a day.

China Shares
The S&P/ASX 200 rose for a fourth day, headed for its highest close since Nov. 14 as BHP Billiton Ltd., the world’s largest mining company, climbed 2.8 percent, and energy producers as a group jumped 3.9 percent, set for an almost one-month high. New Zealand’s NZX 50 Index (NZSE50FG) added 0.3 percent while the Kospi index in Seoul rose 0.4 percent.

China’s stocks rallied to the highest level since 2010. PetroChina Co. and Industrial & Commercial Bank of China Ltd., the nation’s two biggest stocks, gained more than 3 percent. Aluminum Corp. of China Ltd. jumped by the daily limit. The Shanghai Composite (SHCOMP)Index rose as much as 2.6 percent.

The Shanghai Composite is the best-performing primary equity index globally this year, followed by benchmarks in Venezuela and Pakistan, data compiled by Bloomberg show. Russia’s dollar-denominated RTS Index is the worst performer, losing 47 percent amid the retreat in oil and sanctions against the country over its involvement in the Ukraine conflict.

Fed Outlook
The S&P 500 recorded its biggest three-day rally since 2011 at the end of last week, rising 0.5 percent on Dec. 19 to 2,070.65. A gauge of implied volatility on the U.S. benchmark dropped last week, with the Chicago Board Options Exchange SPX Volatility Index, known as the VIX, sliding 22 percent, the most since the five days to Oct. 24.

Fed Chair Janet Yellen said last week that policy makers are likely to hold key rates near zero at least through the first quarter, even as the U.S. economy strengthens. The central bank, in a statement after its last meeting of 2014, replaced a reference to borrowing costs staying low for a “considerable time” with a pledge to be patient on the timing.

“Lower oil prices and the move toward a Fed rate hike represent good news, but they will generate financial market stress,” JPMorgan Chase & Co. analysts, led by Chief Economist Bruce Kasman, wrote in a report e-mailed Dec. 20. “The divergent global growth impulses that have delivered lackluster growth over the past two years are set to change.”

Rupiah, Ruble
The rupiah added 0.4 percent to 12,443 per dollar in a fifth straight day of gains amid the revival in risk sentiment and demand for equities. The Bloomberg Dollar spot Index, which tracks the greenback against 10 major peers, was down 0.1 percent after rising 0.4 percent Dec. 19 to its highest close since March 2009. The dollar touched $1.2220 versus the euro, matching the highest since August 2012.

One-month ruble forwards strengthened 2 percent after Phoenix TV yesterday reported pledges of support for Russia from two Chinese ministers. The ruble tumbled about 41 percent against the dollar in the past six months amid concern a drop in oil would hurt the biggest energy exporter at the same time as it contends with U.S. and European sanctions.

Yields on Japanese government bonds due in a decade dropped by one basis point, or 0.01 percentage point, to 0.34 percent in a third day of declines.

The extra yield demanded on 30-year Treasuries over five-year notes shrank to 110 basis points today, data compiled by Bloomberg show. The difference has contracted from 223 basis points in January 2014, the widest this year. Rates on benchmark 10-year Treasuries dropped one basis point to 2.15 percent after jumping eight basis points last week.

The U.S. updates third-quarter gross domestic product tomorrow, with economists surveyed by Bloomberg predicting annualized growth will be revised up to 4.3 percent for the three-month period, from a previous estimate of 3.9 percent. Data on housing, goods orders and personal consumption in the world’s largest economy are also due this week.

FTSE Outlook

Initial resisatnce is 6591 today, and we also have the top of the 10 day Bianca at 6597, so I think we may see an initial dip to start this week, especially after a decent bounce last week. However, it will be low volume this week so moves will be exaggerated. Todays pivot is 6526 so initial support there for today, and if that holds then I think we will bounce back to 6600ish, which if the bulls manage to break opens up a trip to 6650, with a somewhat optimistic 6750 above that (probably Wednesday?). Support below the pivot is the round number 6500, with 6460 below that. If it gets really bearish today/this week then 6423 is the bottom of the PRT channel on the daily chart.