EQUITIES: E-Mini S&P Maintains a Softer Short-Term Tone
A M/T bull trend in Eurostoxx 50 futures remains intact, however, the latest sell-off highlights a stronger corrective cycle. The move down this week has resulted in the breach of two key support points; 5606.50, the 50-day EMA, and 5604.50, the base of a bull channel drawn from the Aug 1 low. The breach signals scope for a deeper pullback and opens 5503.00, a Fibonacci retracement. Initial resistance to watch is 5675.90, the 20-day EMA. S&P E-Minis maintain a softer short-term tone. The below support at 6655.70, the Nov 7 low cancel recent bearish signals and signals scope for an extension of the current corrective cycle. Note that price has also breached support at the 50-day EMA. An extension would open 6540.25, the Oct 10 low and the next key support. Initial firm resistance to watch is 6793.65, the 20-day EMA.
- Japan's NIKKEI closed lower by 1620.93 pts or -3.22% at 48702.98 and the TOPIX ended 96.43 pts lower or -2.88% at 3251.1.
- Elsewhere, in China the SHANGHAI closed lower by 32.222 pts or -0.81% at 3939.813 and the HANG SENG ended 454.25 pts lower or -1.72% at 25930.03.
- Across Europe, Germany's DAX trades lower by 300.06 pts or -1.27% at 23292.55, FTSE 100 lower by 93.17 pts or -0.96% at 9582.31, CAC 40 down 107.64 pts or -1.33% at 8011.18 and Euro Stoxx 50 down 75.28 pts or -1.33% at 5566.43.
- Dow Jones mini down 132 pts or -0.28% at 46540, S&P 500 mini down 19 pts or -0.28% at 6674, NASDAQ mini down 84.25 pts or -0.34% at 24802.
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LOOK AHEAD: US Week Ahead Headlined By Delayed CPI Report On Friday
- The September US CPI report will be released on Friday, delayed amidst the government shutdown but with the BLS making a special exception on social security payment considerations.
- Bloomberg consensus looks for headline CPI inflation at a rounded 0.4% M/M after 0.38% back in August and for Y/Y inflation to firm two tenths to 3.1% for what would be its highest since May 2024.
- Core inflation is seen at a rounded 0.3% M/M after 0.35% in August (exceeding the median unrounded estimate of 0.31%) and 0.32% in July. It’s expected to see core CPI inflation hold at 3.1% Y/Y having in August increased to its highest since February.
- Core details should see focus on both goods and services angles: underlying goods inflation has clearly firmed in recent months on tariff pressures although the median increase has currently seen a peak back in June, whilst services will be watched for any spillover after some strong recent non-housing readings.
- The report will come within the FOMC blackout period ahead of the Oct 28-29 decision, with a 25bp cut fully priced and likely needing a large surprise to alter this.
- As for broader inflation details, Fed Chair Powell this week confusingly suggested that we will have the September PPI report but the BLS had previously said “No other releases will be rescheduled or produced until the resumption of regular government services”.
US DATA: Latest Jobless Claims Estimates During The Shutdown
As noted earlier, MNI estimates initial jobless claims at a seasonally adjusted 218k in the week to Oct 11 and continuing claims at a seasonally adjusted 1929k in the week to Oct 4.
- To give a better idea of sensitivity around these estimates, which rely on estimates for some missing states, we note the below analyst estimates:
- Goldman Sachs have a central estimate of 217k for initial claims in a range of 211-225k, whilst they see continuing claims at 1917k in a range of 1885-1930k.
- JPMorgan meanwhile also see 217k for initial claims whilst they see continuing claims as having held constant at 1927k.
NATGAS: Venture Global in Talks with Ukraine for more LNG Deliveries, Reuters
Ukraine is seeking more cargoes from Venture’s Plaquemines facility as the embattled nation approaches the winter heating season, according to Reuters sources
- Venture is in talks with Ukraine’s DTEK to procure more LNG cargoes after a year of gas infrastructure attacks by the Russians.
- Venture Global CEO Michael Sabel met with President Volodymyr Zelenskiy on Thursday October 16.
- DTEK signed an agreement in 2024 for an undisclosed amount of LNG from the facility, as well as 2 mtpa from Calcasieu Pass Phase 2 currently under construction.
- Plaquemines currently has spare capacity to deliver more cargoes to Ukraine on the spot market, per Reuters.
- Plaquemines now sends out the second highest LNG volume in the US, with feedgas demand averaging 3.45 bcf/d according to MNI figures.
