OIL: Alberta Wildfire Risk Remains After Curtailing Oil Output in May

The Bank of Italy’s Euro-coin indicator, which provides a nowcast for trend growth, was little changed at 0.26 in May (vs 0.25 in March and April). The press release notes that “its performance benefited from the growth in industrial production and from the moderate recovery in household confidence, despite being affected by the deterioration in the qualitative indicators for service firms”.

• The trend growth series strips out seasonal variations, measurement errors and short-run volatility, and has been in positive (albeit subdued) territory for the last 15 months.
• Bloomberg’s GDP Nowcast (which aims to estimate actual Q/Q growth, not trend growth) rose more notably to 0.56 in May, from 0.28 in April.
• Both nowcasts are more optimistic than current Bloomberg analyst consensus of 0.1% Q/Q GDP growth in Q2. The ECB will provide updated quarterly projections as part of tomorrow’s rate decision. 

WTI futures continue to trade closer to their recent highs. A bear threat remains present and the recovery since Apr 9 still appears corrective. A key resistance area to monitor is $62.51, the 50-day EMA. It has again been pierced. A clear break of it would highlight a stronger reversal and open $65.82, the Apr 4 high. For bears a reversal lower would refocus attention on $54.33, the Apr 9 low and bear trigger. A bullish theme in Gold remains intact and this week’s gains reinforce current conditions. Medium-term trend signals are bullish too - moving average studies remain in a bull-mode position, highlighting a dominant uptrend. Sights are on $3435.6 next, the May 7 high. A break of this hurdle would strengthen bullish conditions. On the downside, key support and the bear trigger to watch has been defined at $3121.0, the May 15 low.

• WTI Crude up $0.03 or +0.05% at $63.43
• Natural Gas down $0.05 or -1.32% at $3.673
• Gold spot up $8.49 or +0.25% at $3361.69
• Copper up $5.55 or +1.15% at $488.95
• Silver up $0.01 or +0.04% at $34.5228
• Platinum up $13 or +1.2% at $1092.56

The trend cycle in Eurostoxx 50 futures remains bullish and a recent pullback appears corrective. Moving average studies are in a bull-mode position, highlighting a clear dominant uptrend. Sights are on 5516.00, the Mar 3 high and the key bull trigger. Clearance of this level would strengthen a bull theme. Key support to watch lies at 5262.93, the 50-day EMA. A clear break of this average is required to signal a possible reversal. The trend condition in S&P E-Minis is unchanged and remains bullish and the contract is trading just ahead of its recent high. A print above 5993.50 last week, the May 20 high and a bull trigger, highlights a resumption of the uptrend and maintains a price sequence of higher highs and higher lows. An extension would open 6057.00 next, the Mar 3 high. Key support lies at 5765.62, the 50-day EMA.

• Japan's NIKKEI closed higher by 300.64 pts or +0.8% at 37747.45 and the TOPIX ended 14.02 pts higher or +0.51% at 2785.13.
• Elsewhere, in China the SHANGHAI closed higher by 14.227 pts or +0.42% at 3376.203 and the HANG SENG ended 141.54 pts higher or +0.6% at 23654.03.
• Across Europe, Germany's DAX trades higher by 207.88 pts or +0.86% at 24299.5, FTSE 100 higher by 6.83 pts or +0.08% at 8793.83, CAC 40 up 52.2 pts or +0.67% at 7816.04 and Euro Stoxx 50 up 35.5 pts or +0.66% at 5411.2.
• Dow Jones mini up 71 pts or +0.17% at 42669, S&P 500 mini up 11.25 pts or +0.19% at 5992.25, NASDAQ mini up 27 pts or +0.12% at 21732.