EQUITY TECHS: E-MINI S&P: (U5) Corrective Pullback Extends
- RES 4: 6523.63 1.764 proj of the May 23 - Jun 11 - 23 price swing
- RES 3: 6500.00 Round number resistance
- RES 2: 6477.31 1.618 proj of the May 23 - Jun 11 - 23 price swing
- RES 1: 6468.50 High Jul 31 and the bull trigger
- PRICE: 6269.25 @ 14:47 BST Aug 1
- SUP 1: 6264.25 Intraday low
- SUP 2: 6288.25 Low Jul 17
- SUP 3: 6241.00 Low Jul 16
- SUP 4: 6189.50 50-day EMA
The trend set-up in S&P E-Minis remains bullish and short-term weakness is considered corrective. Note that the contract has traded through support at the 20-day EMA, at 6336.64. The breach signals scope for a deeper retracement and opens the 50-day EMA at 6189.50. Clearance of this average is required to signal a stronger reversal. The primary trend remains up, key short-term resistance and the bull trigger is 6468.50, the Jul 31 high.
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STIR: Hawkish Adjustments In GBP STIRs Surrounding Reeves' Future
GBP STIR curves have also hawkishly steepened on speculation surrounding the future of Chancellor Reeves.
- The potential departure of Reeves could result in a watering down of the UK’s fiscal rules, limiting the BoE’s room to ease.
- BoE-dated OIS now little changed to 2bp less dovish on the day across ’25 meetings.
- Over 80% odds of a 25bp cut still priced for August, with such a step fully discounted through the September meeting.
- December meeting pricing shows ~53bp of cumulative cuts after failing to move decisively through 55bp of cuts in recent sessions.
- SONIA futures last 0.5-16.0 lower.
- SFIZ5/Z6 steepens away from year-to-date lows in the -25.0 area to print -20.0 last.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
Aug-25 | 4.010 | -20.7 |
Sep-25 | 3.945 | -27.2 |
Nov-25 | 3.777 | -44.0 |
Dec-25 | 3.690 | -52.7 |
Feb-26 | 3.561 | -65.6 |
Mar-26 | 3.530 | -68.7 |
EQUITY TECHS: E-MINI S&P: (U5) Approaching Key Resistance
- RES 4: 6300.00 Round number resistance
- RES 3: 6281.12 1.618 proj of the Apr 7 - 10 - 21 price swing
- RES 2: 6277.50 High Feb 19 and a bull trigger
- RES 1: 6270.75 Intraday high
- PRICE: 6242.75 @ 14:45 BST Jul 3
- SUP 1: 6102.47/5975.80 20- and 50-day EMA values
- SUP 2: 5811.50 Low May 23
- SUP 3: 5645.75 Low May 7
- SUP 4: 5500.00 Low Apr 30
The trend condition in S&P E-Minis is unchanged, it remains bullish and the contract has continued to appreciate, this week. Short-term resistance and a bull trigger at 6128.75, the Jun 11 high, has recently been breached. The clear break confirms a resumption of the uptrend that started Apr 7. The 6200.00 handle has been cleared too, this opens 6277.50, the Feb 21 high and bull trigger. Key support is at the 50-day EMA - at 5975.80.
CANADA DATA: PMI Points To Ongoing Manufacturing Contraction
S&P Global's Manufacturing PMI dipped to 45.6 in June from 46.1 prior, suggesting no rebound in Canadian manufacturing through the end of a tariff-impacted Q2. This was a relapse after a 0.8pp rise in May, and the 5th consecutive contractionary (sub-50) reading, with the report (link here) noting production falling to a 5-year low (ie the early Covid pandemic) "amid a sharp decline in new work".
- Per the report: "Tariffs were widely reported to have adversely impacted market demand, and overall sales declined for a fifth successive month. International sales, especially from the neighbouring US, were especially weak. Latest data showed that new export orders declined in June at one of the steepest rates in the survey history."
- Employment fell for a 5th consecutive month (reflecting both redundancies and attrition), with the decline in order backlogs accelerating.
- The brightest note in the report: "confidence in the outlook improved to its highest level since January, strengthening noticeably since May", but "compared to the survey’s historical average, confidence remained subdued. This was largely the result of difficulties in forecasting the direction of trade policies and tariff levels with the neighbouring United States."
- Price pressures appear to have abated slightly however: "Although the rate of inflation softened during June to a four-month low, it remained elevated compared to the survey trend. Manufacturers sought to pass on their higher input costs to clients via a rise in their own selling prices during June. Similarly, the rate of inflation remained marked, despite easing to a four-month low."
