EQUITIES: E-Mini S&P Remains Above Bull Trigger, Trading at Cycle Highs
The trend condition in Eurostoxx 50 futures remains bearish, however, the recovery from Monday’s low appears to be a potential reversal. The contract has traded through the 20- and 50-day EMAs. A clear break of both averages would strengthen a reversal theme and signal scope for a stronger recovery. This would open 5486.00, the May 20 high and bull trigger. On the downside, a breach of Monday’s 5194.00 low would reinstate a bearish theme. The trend condition in S&P E-Minis is unchanged, it remains bullish and this week’s fresh cycle highs reinforces current conditions. Short-term resistance and a bull trigger at 6128.75, the Jun 11 high, has been breached. The clear break confirms a resumption of the uptrend that started Apr 7. The 6200.00 handle has been cleared, this opens 6249.00, the Feb 21 high. Key support is at the 50-day EMA - at 5952.18. A clear break of it would signal a reversal.
- Japan's NIKKEI closed higher by 566.21 pts or +1.43% at 40150.79 and the TOPIX ended 35.85 pts higher or +1.28% at 2840.54.
- Elsewhere, in China the SHANGHAI closed lower by 24.226 pts or -0.7% at 3424.227 and the HANG SENG ended 41.25 pts lower or -0.17% at 24284.15.
- Across Europe, Germany's DAX trades higher by 193.54 pts or +0.82% at 23842.14, FTSE 100 higher by 45.19 pts or +0.52% at 8780.84, CAC 40 up 93.31 pts or +1.23% at 7650.62 and Euro Stoxx 50 up 50.79 pts or +0.97% at 5294.82.
- Dow Jones mini up 103 pts or +0.24% at 43821, S&P 500 mini up 14.5 pts or +0.23% at 6209.5, NASDAQ mini up 70.5 pts or +0.31% at 22739.75.
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OPTIONS: Expiries for May28 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.1300(E1.4bln), $1.1390-00(E1.4bln), $1.1445-55(E1.0bln), $1.1500-20(E1.4bln)
- USD/JPY: Y141.00($1.3bln), Y141.75-80($990mln), Y143.00($2.0bln), Y143.90-00($1.9bln), Y145.00($1.8bln)
- AUD/USD: $0.6325-30(A$500mln)
- NZD/USD: $0.5725(N$1.1bln)
GILTS: Curve Bear Flattens, Light Pressure Into Bidding Deadline
Gilt futures to fresh session lows (91.02) as we move towards the bidding deadline for the GBP2.75bln auction of the 0.875% Jul-33 green gilt.
- Fresh downward momentum in the contract would expose the 23 May low (90.46).
- Yields 2.5-4.5bp higher, curve bear flattens.
- While fundamentals and the UK fiscal picture point to continued curve steepening, the DMO’s more activist approach to issuance (ongoing skew further forwards in terms of the maturity profile, as it looks to facilitate demand changes) presents ongoing risks to this idea.
COMMODITIES: Recovery for WTI Futures Since Apr 9 Still Appears Corrective
WTI futures traded to a fresh S/T cycle high last Wednesday before finding resistance. The recovery since Apr 9, appears corrective. Key resistance to watch is $62.63, the 50-day EMA. It has been pierced, a clear break of it would highlight a stronger reversal and open $65.82, Apr 4 high. For bears a reversal lower would refocus attention on $54.33, the Apr 9 low and bear trigger. The price pattern on May 21 is a shooting star - a bearish signal. Recent gains in Gold signals the end of the corrective phase between Apr 22 - May 15. Medium-term trend signals are unchanged, they remain bullish. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend. A continuation higher would open $3435.6 next, the May 7 high. Key support and the bear trigger has been defined at $3121.0, the May 15 low.
- WTI Crude up $0.08 or +0.13% at $60.97
- Natural Gas up $0 or +0.03% at $3.399
- Gold spot up $19.51 or +0.59% at $3320.93
- Copper up $1.65 or +0.35% at $475.65
- Silver up $0.08 or +0.24% at $33.3368
- Platinum up $6.69 or +0.62% at $1092.23
