EQUITIES: Estoxx Put Spread buyer

A bearish theme in WTI futures remains intact and the move lower from the Nov 7 high has reinforced a bear theme. Attention is on $65.74, the Oct 1 low, and $63.90, the Sep 10 low and key support. For bulls, a clear reversal to the upside would instead refocus attention on the key short-term resistance at $77.04, the Oct 8 high. Clearance of this level would resume the recent uptrend. Initial firm resistance is $72.41, the Nov 7 high. The long-term trend condition in Gold is unchanged, it remains bullish and the latest move down is considered corrective. Price has recovered from its recent lows. The 20-day EMA is at $2651.3. A clear break above it would highlight a possible reversal and signal the end of the recent bearish corrective cycle. This would open $2710.4, the Nov 11 high. Key short-term support lies at $2536.9, Nov 14 high. A break would resume the bear cycle.

• WTI Crude up $0.54 or +0.78% at $69.93
• Natural Gas up $0.05 or +1.7% at $3.049
• Gold spot down $10.64 or -0.4% at $2621.53
• Copper up $2.2 or +0.53% at $420.3
• Silver down $0.33 or -1.06% at $30.878
• Platinum down $9.43 or -0.97% at $965.16

A bearish condition in Eurostoxx 50 futures remains intact. A fresh cycle low this week marks a resumption of the downtrend that started Sep 30. Price has breached 4746.94, 61.8% of the Aug 5 - Sep 30 bull cycle. This exposes 4662.12, the 76.4% retracement point. Initial firm resistance has been defined at 4961.00, the Nov 6 high, where a break would highlight a reversal. First resistance is at 4848.22, the 20-day EMA. The latest move lower in the S&P E-Minis contract appears corrective. Medium-term trend signals such as moving average studies, continue to highlight a dominant uptrend. The contract has traded through the 20-day EMA. The next key support to monitor is 5834.60, the 50-day EMA. A clear break of this level would signal scope for a deeper retracement. A resumption of gains would refocus attention on the bull trigger at 6053.25, Nov 11 high.

• Japan's NIKKEI closed lower by 62.09 pts or -0.16% at 38352.34 and the TOPIX ended 11.74 pts lower or -0.43% at 2698.29.
• Elsewhere, in China the SHANGHAI closed higher by 21.979 pts or +0.66% at 3367.989 and the HANG SENG ended 41.34 pts higher or +0.21% at 19705.01.
• Across Europe, Germany's DAX trades higher by 104.32 pts or +0.55% at 19164.68, FTSE 100 higher by 19.4 pts or +0.24% at 8118.21, CAC 40 up 33.93 pts or +0.47% at 7262.25 and Euro Stoxx 50 up 27.84 pts or +0.59% at 4778.05.
• Dow Jones mini up 116 pts or +0.27% at 43521, S&P 500 mini up 11.75 pts or +0.2% at 5951.75, NASDAQ mini up 37 pts or +0.18% at 20809.25.

Danske Bank expect solid demand at today’s 30-year Bund auction.

• “Given the significant underperformance to swaps, we expect that life insurance companies and pension funds that use a EUR swap curve as the hedge for their liabilities will buy some very cheap 30Y Bunds”
• Buxl vs. 3-month Euribor spreads have tightened ~1bp today. See our earlier post for more colour there.
• The German curve has bear steepened this morning, with 30-year yields ~2.5bps higher. 5s30s remains comfortably within its November range at 37.5bps.