CHINA: Country Wrap: Tariffs off CHIPS

• Chinese consumer spending faltered during a major holiday even as more people hit the road, suggesting a trade truce with the US is failing to turn around sentiment in an economy reeling from Donald Trump’s tariffs.   Travelers spent more than 42.7 billion yuan ($5.9 billion) during a total of 119 million domestic trips made during the three-day Dragon Boat Festival public holiday, each up more than 5% from a year earlier, figures provided by the Ministry of Culture and Tourism showed on Tuesday.  (source BBG)
• Chinese Foreign Minister Wang Yi used his first meeting with new US Ambassador David Perdue to complain about recent actions by Washington, underscoring a downturn in relations between the world’s two biggest economies.  “Unfortunately, the US has recently introduced a series of negative measures on unfounded grounds, undermining China’s legitimate rights and interests,” Wang said during the sit down in Beijing, according to a Chinese government statement.  (source BBG)
• The Hang Seng rose +0.72% today, the CSI 300 was up +0.52%, Shanghai up +0.43% and Shenzhen up +0.88%
• Yuan Reference Rate at 7.1886 Per USD; Estimate 7.2005
• Bonds are seeing limited movement with the CGB10YR at 1.70. The CGB10YR has traded in a tight range of 1.61-1.71 since early April.

• RES 4: 5600.00 Round number resistance    
• RES 3: 5565.23 1.618 proj of the Apr 7 - 9 - 10 price swing
• RES 2: 5516.00 High Mar 3 and the key bull trigger
• RES 1: 5475.00 High May 20  
• PRICE: 5389.00 @ 06:12 BST Jun 4 
• SUP 1: 534.61 20-day EMA
• SUP 2: 5262.93 50-day EMA and a key support 
• SUP 3: 5142.00 Low May 2         
• SUP 4: 5055.00 Low Apr 30  

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.

• RES 4: 107.812 0.618 proj of the Mar 6 - Apr 7  - 9 price swing
• RES 3: 107.775 High Apr 7 and the bull trigger
• RES 2: 107.600 High Apr 30
• RES 1: 107.405/550 High May 27 and 30 / High May 7 and 23
• PRICE: 107.350 @ 06:04 BST Jun 4
• SUP 1: 107.255 Low May 29
• SUP 2: 107.195/070 Low May 22 / 13 and the bear trigger
• SUP 3: 106.965 Low Apr 9 and a key support
• SUP 4: 106.928 61.8% retracement of the Mar 6 - Apr 7 bull cycle    

Schatz futures are in consolidation mode. A bull cycle that started May 13, remains intact. The recent breach of 107.335, the May 12 / 20 high, continues to signal a stronger reversal and has exposed 107.550, the May 7 / 23 high. A clear breach of this level would strengthen a bullish theme. For bears, a deeper pullback would instead signal scope for an extension towards 106.965, the Apr 9 low. The bear trigger is 107.070, the May 13 low.