Support 6551, 6523, 6500, 6492, 6430 Resistance 6574, 6585, 6626, 6710, 6757, 6832

Good morning. Well when I worked out the 6578 resistance area I really didn’t think we would hit that yesterday, and though that the 6534 area would hold better (got a bit of a dip from there but only down to the 6515). Its NFP Friday today, so US jobs news out at 13:30 and the forecast is 240k versus 321k previously. Turned into a bit of a trending day and managed to make the start for 2015 positive (funny that, can’t have any bad headlines!) after a rocky start. Top of the Bianca 10 day channel is at 6574 so the area we stopped rising yesterday – bulls will be trying for an early break of this for a push higher.

Asia Overnight from Bloomberg
Asian stocks rose a second day, led by commodity and energy producers, as U.S. crude oil headed for its longest streak of gains since August. The dollar weakened from a 10-year high after a second Federal Reserve official cautioned against raising interest rates this year.

The MSCI Asia Pacific Index added 0.9 percent by 2:03 p.m. in Tokyo, paring its loss in the week to 0.2 percent as BHP Billiton Ltd. (BHP), the world’s biggest mining company, rose 2.6 percent. Standard & Poor’s 500 Index futures lost 0.2 percent. U.S. oil climbed a third day, adding 0.8 percent. The Bloomberg Dollar Spot Index slipped 0.2 percent after Minneapolis Fed President Narayana Kocherlakota said higher rates would hinder a recovery in inflation.

A new-year selloff in global equities reversed in recent days after Fed meeting minutes indicated the bank hadn’t altered its view on rates and on the prospect of further European Central Bank stimulus. Chicago Fed President Charles Evans also warned against raising rates, with payrolls data today projected to show unemployment falling to 5.7 percent. China’s factory gate prices fell 3.3 percent in December, suggesting room for further monetary easing.

“America hasn’t begun raising interest rates yet, and as long as Japan and ECB keep answering the market’s strong desire for stimulus and flooding it with money, the outlook for financial markets should continue to be strong,” said Ayako Sera, market strategist at Sumitomo Mitsui Trust in Tokyo, which oversees $325 billion in assets. “However, there’s a limit to that. At some point the focus will eventually shift to earnings.”

More than two stocks climbed for each that fell on the Asia-Pacific stock gauge. A measure of energy companies gained 1.5 percent, paring its six-month loss to 20 percent.

WTI, Brent
Australia’s S&P/ASX 200 (AS51) Index climbed 1.4 percent as an energy subindex surged 3 percent. Oil producers Santos Ltd. and Woodside Petroleum Ltd. rallied at least 2.9 percent.

West Texas Intermediate crude traded at $49.17 a barrel in New York, having declined 6.7 percent this week. The contract hasn’t risen for three days in a row since the period ended Aug. 29 as expanding U.S. production has added to a global glut. Brent in London climbed 0.5 percent to $51.20 after closing yesterday at its lowest settlement since April 30, 2009.

The Hang Seng Index climbed 1 percent and a gauge of Chinese shares listed in Hong Kong advanced 1.7 percent. The Shanghai Composite Index, which closed at a five-year high earlier this week, fluctuated.

Record Slide
China’s producer-price index slumped more than the median projection for a 3.1 percent decline in a survey of analysts by Bloomberg News, according to statistics bureau data. It was the 34th month in a row that the index slid. Consumer prices rose 1.5 percent, matching the median estimate.

The MSCI All-Country World Index added 0.2 percent, cutting its weekly drop to 0.3 percent after both the Dow Jones Industrial Average and the Stoxx Europe 600 Index reversed their 2015 declines yesterday.

U.S. companies probably added 240,000 workers to nonfarm payrolls in December, above the year-to-date average of 228,000, according to a Bloomberg survey of economists. Data yesterday showed claims for unemployment benefits decreased by 4,000 to 294,000 in the week ended Jan. 3, adding to signs of an improving labor market.

The Bloomberg Dollar Spot Index slipped to 1,145.39, retreating from its highest closing level since January 2005. The U.S. currency was weaker against 14 of 16 major currencies tracked by Bloomberg. The yen added 0.3 percent to 119.34 per dollar, while Malaysia’s ringgit advanced 0.3 percent to 3.5548 to the greenback in a second day of gains.

Retarded Recovery
Increasing borrowing costs in 2015 “would only further retard the pace of the slow recovery in inflation,” Kocherlakota, who doesn’t vote on policy this year, said in the text of speech prepared for delivery at a town hall meeting of the reserve bank. He voted against a December statement that pledged patience on rate increases and was against ending asset purchase program in October.

There’s a 58 percent likelihood the Federal Reserve will raise its target federal funds rate from a zero-to-0.25 percent range to at least 0.5 percent by September, futures data compiled by Bloomberg show.

The euro was 0.1 percent stronger at $1.1806. The joint currency yesterday weakened below $1.18 for the first time since 2005 amid further signs of economic weakness as European Central Bank President Mario Draghi said stimulus measures may include sovereign-bond purchases.

Russia Rating
One-month forwards on Russia’s ruble climbed 1.4 percent to 60.9987 per dollar. Societe Generale SA said that Fitch Ratings, which ranks Russia two levels above junk, will probably cut by one step today. Standard & Poor’s signalled last month it may drop the country below investment grade within 90 days.

The cost of insuring Russia’s bonds against non-repayment for five years jumped 61 basis points this year to 538, according to data compiled by Bloomberg, making the nation’s debt the fifth-riskiest globally. Plunging oil prices and sanctions over President Vladimir Putin’s support for Ukraine separatists are pushing the economy toward recession. [from here]

FTSE Outlook

Looking at the 10min chart I think a little dip down to the 6551 support from this overnight high and where we paused last night around 6570, before a bounce to 6580ish. There is PRT resistance there as well as the 10 day Bianca and 10 day Raff. As such a short off that area is worth a go, but with a tight stop, and see how it goes. The next support below 6551, is 6535 (PRT daily pivot) and then 6523 (live charts pivot) and a lot will depend on NFP at 13:30 for the direction around then. Either way it will probably get a bit choppy later. The 10 minute chart has weakened since about 2am, whilst the 30minute is still weak bull, but if we do start to dip it won’t take to much downside for that to change. A break of 6550 will help the bears today and get things bearish again certainly for a little while

On the bullish side, if the bulls break 6585 then we will probably stay bullish and start thinking about 6700 and the top of the 20 day at 6757 20 day Bianca, and 6830 20 day Raff channel top areas next week. Normally after a strong trending day I would expect a bit of a consolidation day, but at the moment it all just screams around all over the place!