EQUITIES: ESA Pinned Between DMAs, Shrugs Off Tax Bill Weakness
May-22 13:48
- A broadly flat open on Wall Street as cash indices consolidate after yesterday's sharp downside - the Dow Jones and NASDAQ are +/- 0.1% in early trade. The E-mini S&P saw some early selling pressure on the passage of Trump's Big Beautiful Bill in the House, which saw US 10y yields press to new highs - but the recovery in Treasuries off the daily low has contained the fallout for equities so far.
- The e-mini S&P is pinned between the 100- and 200-dmas of 5824.75 and 5878.50 respectively, seeing very little interest on the prelim PMI numbers, as markets await further clues and developments in trade talks, which are supposedly ongoing this week with China, South Korea, India and others.
- Communication services and tech names fare generally well in early trade thanks to Alphabet, who's beefed-up AI search functionalities were disclosed at a company event late yesterday.
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GILTS: Sell Off On IMF Headlines Quickly Fades, Steepening Intact
Apr-22 13:42
Gilt futures have regained around 30 of the ~40-tick sell off seen at the turn of the hour.
- The move lower in futures came as the IMF downgraded their economic growth outlook for the UK, which, when coupled with the already fragile fiscal backdrop and thinner-than-usual liquidity, weighed on gilts.
- This serves as a reminder of UK market sensitivity to headlines pointing to a deepening of the well-documented fiscal issues, which stem from limited fiscal headroom and tepid economic growth.
- Still, the prospect of deeper rate cuts from the BoE provides some insulation, meaning the contract stopped short of testing previous session lows.
- Spill over from a bounce in Tsys had seen futures trade as high as 92.56 ahead of the headlines, although initial resistance at 92.63 remains untouched.
- Curve steepening theme remains intact, with yields 6bp lower to 2bp higher on the day.
EQUITIES: Program buyer on the Cash Open
Apr-22 13:40
- Decent program buyer on the Cash Open with 2006 names, the most since the 9th April.
- The early bids on the Equity Cash Open are met by sellers, and SPX is still short of Yesterday's high of 5232.94, now trading at 5222.62.
US TSY FUTURES: BLOCK: Jun'25 5Y Buy
Apr-22 13:39
+6,500 FVM5 108-10.75, buy through 108-10.25 post time offer at 0931:33ET, DV01 $266,000. The 5Y contract trades 108-10.5 last (-1)
