EQUITIES: Bull Cycle in Eurostoxx 50 Futures Intact Following This Week's Climb
A bull cycle in the Eurostoxx 50 futures contract remains intact. This week’s climb resulted in a breach of 5054.00, the Jan 8 high, to confirm a resumption of the uptrend. The contract is holding on to its recent gains. The focus is on a climb towards 5142.00, a Fibonacci projection point. Key short-term support has been defined at 4931.00, the Jan 13 low. A break of this level would be bearish. A bear threat in the S&P E-Minis contract remains present. However, Wednesday’s gains resulted in a print above resistance at 5987.04, the 50-day EMA. The average marks an important pivot level and a clear break of it would signal a possible reversal. This would open 6107.50, the Dec 26 high. Key short-term support has been defined at 5809.00, the Jan 13 low. A breach of this level would confirm a resumption of the downtrend.
- Japan's NIKKEI closed lower by 121.14 pts or -0.31% at 38451.46 and the TOPIX ended 8.89 pts lower or -0.33% at 2679.42.
- Elsewhere, in China the SHANGHAI closed higher by 5.789 pts or +0.18% at 3241.821 and the HANG SENG ended 61.17 pts higher or +0.31% at 19584.06.
- Across Europe, Germany's DAX trades higher by 201.6 pts or +0.98% at 20857.54, FTSE 100 higher by 77.86 pts or +0.93% at 8469.83, CAC 40 up 78.95 pts or +1.03% at 7713.69 and Euro Stoxx 50 up 36.76 pts or +0.72% at 5143.69.
- Dow Jones mini up 111 pts or +0.26% at 43483, S&P 500 mini up 19 pts or +0.32% at 5994.75, NASDAQ mini up 86 pts or +0.4% at 21335.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: Ticking Lower
Core global FI markets tick lower over the last hour or so.
- Contained uptick in oil probably a factor here, EUR 5y5y inflation-linked swaps +2bp or so on the day unwinding some of yesterday’s ~3bp downtick.
- Nothing in the way of particularly hawkish commentary from ECB chief economist Lane at the MNI event, so that hasn’t been a factor.
- Most participants are probably unwilling to take on fresh positions given the time of year and impending run of central bank decisions, meaning it won’t take much to move markets.
- German yields -1.5bp to +2.5bp, curve twist flattens.
- EGB spreads to Bunds little changed to 1bp wider.
- Tsys and gilts both ~1bp narrower to Bunds.
- Gilts unwind most of the initial CPI driven bid, futures test yesterday’s low.
ECB: Q&A With Chief Economist Lane at MNI Event Has Started
The Q&A with Chief Economist Lane has started. Asked how long the ECB is likely to continue with the current meeting-by-meeting and data dependent approach:
- Lane notes that the meaning of what has been decided on a meeting by meeting and data dependent approach has changed through the course of the post-covid rate cycle.
- Looking ahead, the concept of “meeting-by-meeting” will be more based on an assessment of the risk outlook, given the uncertainty currently present.
- This rhetoric is broadly in line with the themes in Lane’s interview on December 2.
EQUITIES: Estoxx Put Spread
SX5E (21st Mar) 3800/3200ps 1x2, bought for 2.2 in 5k.
