EQUITIES: E-Mini S&P Continues to Trade Within a Relatively Tight Range
A strong short-term reversal in EuroStoxx 50 futures has resulted in a breach of both the 20- and 50-day EMAs. This highlights potential for a deeper near-term pullback and Tuesday’s sell-off confirmed this threat. Sights are on 5689.00 next, the Dec 18 ‘25 low. On the upside, initial firm resistance is 5964.14, the 50-day EMA ahead of 6023.56, the 20-day EMA. For now, gains would likely be corrective. S&P E-Minis have recovered from their most recent lows. For now, the contract continues to trade inside a range. Attention is on the base of this range at 6751.50, the Feb 6 low. This support has been pierced, a clear break of it would highlight a stronger bear threat. On the upside, a resumption of gains and a breach of 6983.75, the Feb 25 high, would instead refocus attention on key resistance and the range top at 7043.00, the Jan 28 high.
- Japan's NIKKEI closed higher by 1032.52 pts or +1.9% at 55278.06 and the TOPIX ended 69 pts higher or +1.9% at 3702.67.
- Elsewhere, in China the SHANGHAI closed higher by 26.092 pts or +0.64% at 4108.567 and the HANG SENG ended 71.86 pts higher or +0.28% at 25321.34.
- Across Europe, Germany's DAX trades higher by 37.89 pts or +0.16% at 24242.32, FTSE 100 higher by 34.96 pts or +0.33% at 10602.63, CAC 40 up 17.5 pts or +0.21% at 8185.23 and Euro Stoxx 50 up 13.11 pts or +0.22% at 5884.03.
- Dow Jones mini down 90 pts or -0.18% at 48705, S&P 500 mini down 3.5 pts or -0.05% at 6871.5, NASDAQ mini down 7.25 pts or -0.03% at 25113.75.
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GILT AUCTION RESULTS: Decent gilt auction
- Decent gilt auction with solid bid-to-cover and the LAP (lowest accepted price) coming in higher than any time in the last 45 minutes of the bidding window.
- Following the results the 4.75% Oct-35 gilt has hit a new intraday high (currently 101.292 at writing) and helped to pull gilt futures around 7 ticks higher.
US: First Procedural Vote On Govt Funding Package Expected At 11:15 ET 16:15 GMT
Politico reports that the House of Representives will vote on the rule for the five-bill government funding package and DHS spending patch at 11:15 ET 16:15 GMT, with a final vote tentatively scheduled for 13:00 ET 18:00 GMT.
- The rule vote is trickiest part of the process for House Speaker Mike Johnson (R-LA) as it is not likely to receive any Democrat support. The Republican majority provides just a single-vote cushion if all members are present and voting, after Johnson yesterday swore-in Deocratic Rep Christian Menefee (D-TX), who won a Special Election on Saturday.
- However, as noted in previous bullet (US: Vote To End US Govt Shutdown Expected Today) two Republican hardliners signalled yesterday they would back the rule, after meeting with President Trump at the White House.
- If the rule passes, and the measure will advances to a final vote, there is likely to be a contingent of Democrat votes to offset any Republican defections.
GILT AUCTION RESULTS: 4.75% Oct-35 Gilt
| 4.75% Oct-35 Gilt | Previous | |
| ISIN | GB00BTXS1K06 | |
| Amount | GBP4.25bln | GBP4.50bln |
| Avg yield | 4.585% | 4.456% |
| Bid-to-cover | 3.63x | 3.26x |
| Tail | 0.2bp | 0.3bp |
| Avg price | 101.268 | 102.295 |
| Low price | 101.256 | 102.275 |
| Pre-auction mid | 101.222 | 102.245 |
| Previous date | 14-Jan-26 |
