EQUITIES: Dominant Uptrend in E-Mini S&P Intact, Contract Close to Recent Highs

The trend condition in Eurostoxx 50 futures remains bullish and short-term weakness for now, appears corrective. Support at 5281.00, the Jul 1 / 4 low, remains intact. A clear break of this level would strengthen a bearish threat. For bulls, a resumption of gains would refocus attention on key resistance and the bull trigger at 5486.00, the May 20 high. It has recently been pierced, a clear breach of it would resume the bull cycle and open 5500.00. S&P E-Minis have traded to fresh cycle high today as the contract begins the week on a bullish note. The climb confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Note that moving average studies are in a bull-mode position highlighting a clear dominant uptrend. Sights are on 6477.31, a Fibonacci projection. Key support is at the 50-day EMA, at 6153.14. Support at the 20-day EMA is at 6302.01.

• Japan's NIKKEI closed lower by 457.96 pts or -1.1% at 40998.27 and the TOPIX ended 21.13 pts lower or -0.72% at 2930.73.
• Elsewhere, in China the SHANGHAI closed higher by 4.282 pts or +0.12% at 3597.937 and the HANG SENG ended 173.78 pts higher or +0.68% at 25562.13.
• Across Europe, Germany's DAX trades higher by 111.22 pts or +0.46% at 24331.01, FTSE 100 higher by 11.81 pts or +0.13% at 9132.57, CAC 40 up 58.45 pts or +0.75% at 7893.03 and Euro Stoxx 50 up 51.53 pts or +0.96% at 5403.69.
• Dow Jones mini up 92 pts or +0.2% at 45178, S&P 500 mini up 20.5 pts or +0.32% at 6445.5, NASDAQ mini up 117.25 pts or +0.5% at 23539.25.

Bloomberg Bonds:

• US Tsys: +0.06yr (small).
• EU Govies: +0.09yr (decent).
• UK Govies: +0.22yr (HUGE).

MS Bonds:

• US Tsys: +0.07yr (average).
• EU Govies: +0.06yr (small).
• UK Govies: +0.15yr (large).

Barclays FX:

• Their Model indicates a Weak Dollar Selling signal vs all the Majors.

In repos, Commerzbank note that “GC has turned better bid after German and Italian GC reached the highest spread vs. €STR in early July. Core GC has richened back to the most expensive level since January. Part of this may be due to the summer holiday season, the latest bond market sell-off fits the picture of investors selling bonds and holding cash/buying repos. We thus do not consider the latest moves to become the beginning of a structural richening trend and expect spreads to resume the moderate cheapening trend after the summer”.