EQUITIES: E-Mini S&P at New Highs, Targets Retracement Levels Next
The bounce off post-NFP lows in global equity indices persists, with the Eurostoxx 50 future recovering back above the 50-day EMA. Markets look to build a base above this level, through which additional strength refocuses attention on 5486.00, the May 20 high. To the downside, recent impulsive weakness did result in a temporary breach of the bear trigger - this makes the April 30 hi/lo range at 5078-5138 the area of downside interest. Wednesday saw new record highs in the e-mini S&P, clearing resistance through the 6477.31 mark. This cements the underlying uptrend, exposing projection levels into 6523.63 next. Vol-based resistance kicks in at 6521.12. Through recent phases of weakness, the 50-day EMA at 6240.28, has held as support - and will be important on any subsequent declines. Clearance of this average is required to signal a stronger reversal.
- Japan's NIKKEI closed lower by 625.41 pts or -1.45% at 42649.26 and the TOPIX ended 33.96 pts lower or -1.1% at 3057.95.
- Elsewhere, in China the SHANGHAI closed lower by 17.022 pts or -0.46% at 3666.443 and the HANG SENG ended 94.35 pts lower or -0.37% at 25519.32.
- Across Europe, Germany's DAX trades higher by 62.34 pts or +0.26% at 24248.8, FTSE 100 lower by 6.57 pts or -0.07% at 9158.6, CAC 40 up 19.64 pts or +0.25% at 7824.61 and Euro Stoxx 50 up 7.77 pts or +0.14% at 5396.02.
- Dow Jones mini up 2 pts or +0% at 45027, S&P 500 mini down 3.75 pts or -0.06% at 6485.25, NASDAQ mini down 22 pts or -0.09% at 23925.5.
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SONIA OPTIONS: SFIM6 97.40/97.50 Call Spread Lifted
SFIM6 97.40/97.50 call spread paper paid 1.25 on 10K.
BONDS: Most Of Rally Holds, Curves Flatter
Still no clear driver for the extension of rally in bonds, that was seemingly led by EGBs.
- Major core global FI curves flatten.
- The previously covered FV/US block flattener will have aided the direction of travel, but the fact that the move was EGB-driven negates that as a primary driver.
- Bearish technical themes intact across the major futures contracts.
EU-RUSSIA: Foreign Ministers Look To Sign-Off On 18th Sanctions Package
Foreign ministers from across the EU are meeting in Brussels as they aim to sign off on the 18th package of sanctions against Russia, which is set to include a lower dynamic oil price cap. The process has been held up for some time due to objections from Slovakia. Bratislava's objections have not specifically been about this sanctions package, but regarding the EU's efforts to impose a phase-out of all Russian hydrocarbons.
- The Slovakian gov't argues the phase-out poses threats to its energy security, but it can be approved against Slovakia's wishes, given that it only requires a qualified majority. The sanctions package on the other hand requires unanimity, with the gov't of PM Robert Fico effectively holding the sanctions 'hostage' until a compromise is reached on the phase out.
- Over the weekend, Fico claimed that his gov't would look to have a deal done by today's foreign ministers' meeting, saying “We want to resolve this by Tuesday because tensions are rising on all sides," while hinting at compromise when adding "We need to win something in this fight, though it will not be a 100-0 result...We want political commitments, guarantees from partners and the Commission that this problem will not remain only on Slovakia's back."
- Politico reports that a holdup by Malta at last week's Coreper II meeting has been dealt with and should not prove an obstacle to the package being agreed to today.
- EU High Commissioner for Foreign Affairs and Security Policy Kaja Kallas will deliver a post-meeting presser at ~16:45CET (10:45ET, 15:45BST).
