EQUITIES: EU Tech Stocks highest since 2000
- European Cash equities gap higher on the open, and immediate focus should be on the Tech sector, SX8P which has gapped above the 2024 high on the open, now trades at its highest level since December 2000, with the next big Psychological 900.00 level near by.
- SX5E look to test next resistance at 5071.39.
- Although Bank stocks (SX7E) gapped higher, the index remains closer to its 1 month low, with lower Yield likely not helping.
Chart source: MNI/Bloomberg.
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USDCAD TECHS: Watching Support At The 50-Day EMA
- RES 4: 1.3977 High Oct 13 ‘23 and a key M/T resistance
- RES 3: 1.3899 High Nov 1 and a key resistance
- RES 2: 1.3846/55 High Apr 16 and the bull trigger / High Nov 10 2023
- RES 1: 1.3785 High Apr 30
- PRICE: 1.3682 @ 08:09 BST May 7
- SUP 1: 1.3626 50-day EMA
- SUP 2: 1.3610 Low May 3
- SUP 3: 1.3547 Low Apr 9
- SUP 4: 1.3478 Low Apr 4
Despite the latest pullback in USDCAD, a bullish trend condition remains intact for now and the move lower appears to be a correction. The pair has recently cleared 1.3614, the Mar 19, 22, 25 and 29 highs, strengthening a bullish theme. Note too, that moving average studies are in a bull-mode position. Key support to watch is 1.3626, the 50-day EMA. This average was pierced last Friday, but remains intact as a support, for now.
AUDUSD TECHS: Recent Bullish Extension Exposes Key Resistance
- RES 4: 0.6751 76.4% retracement of the Dec 28 - Apr 19 bear leg
- RES 3: 0.6705 High Jan 15
- RES 2: 0.6668 High Mar 8 and key short-term resistance
- RES 1: 0.6647 High May 3
- PRICE: 0.6592 @ 08:00 BST May 7
- SUP 1: 0.6534 50-day EMA
- SUP 2: 0.6465/6363 Low May 1 / Low Apr 19 and the bear trigger
- SUP 3: 0.6339 Low Nov 10 and a key support
- SUP 4: 0.6315 Low Oct 31 ‘23
AUDUSD traded higher Friday and in the process breached resistance at 0.6587, the Apr 29 high. The break cancels a recent bearish threat and instead highlights a resumption of the bull leg that started Apr 19. This opens 0.6668, the Mar 8 high and a key resistance. Clearance of this level would strengthen a bullish theme. On the downside, a move below 0.6465, the May 1 low, is required to reinstate a bearish threat.
STIR: SONIA Futures Rally After Long Weekend, First BoE Cut Nearly Fully Priced For Aug
SONIA futures are little changed to 6.5bp firmer through the blues, with the GBP short end mostly following core global STIR markets after a long weekend in London.
- BoE-dated OIS moves to price ~55bp of '24 cuts, with the first 25bp move more or less fully discounted come the end of the August MPC.
- Only lower tier UK data is due Tuesday, with Thursday’s BoE decision moving into view. Expect our full preview of that event later today.
- UK headline flow has seen PM Sunak trying to remain relatively upbeat in the wake of last week’s local election losses.
- Elsewhere, BRC sales like-for-like data for the month of April was much softer than expected. The majority of this decline was due to the earlier timing of Easter, with the BRC noting that the average growth for the combined period of March and April was +0.2% Y/Y.
- Halifax house price data showed little M/M movement and isn’t usually a market mover.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| May-24 | 5.201 | +0.1 |
| Jun-24 | 5.089 | -11.1 |
| Aug-24 | 4.954 | -24.6 |
| Sep-24 | 4.861 | -33.9 |
| Nov-24 | 4.745 | -45.5 |
| Dec-24 | 4.653 | -54.7 |
