CROSS ASSET: European Bonds & Equities Bounce

• RES 4: 116.57 High Aug 13
• RES 3: 115.72 High Aug 26 and a key S/T resistance 
• RES 2: 114.58 High Sep 4   
• RES 1: 111.60/112.79 High Oct 13 / 50-day EMA  
• PRICE: 111.50 @ 07:53 BST Oct 14
• SUP 1: 109.53 Low Oct 1 and 8 and the bear trigger     
• SUP 2: 108.87 1.000 proj of the Aug 26 - Sep 15 - 22 price swing
• SUP 3: 107.88 1.236 proj of the Aug 26 - Sep 15 - 22 price swing
• SUP 4: 106.77 1.500 proj of the Aug 13 - 20 - 26 price swing

The trend condition in BTP futures is unchanged, it remains bearish and the latest recovery is - for now - considered corrective. Note that moving average studies on the continuation chart are in a bear-mode position, highlighting a dominant downtrend. Sights are on 108.87 next, a Fibonacci projection point. The next key resistance to monitor is 112.79, the 50-day EMA. A clear breach of this average would undermine the bear cycle.

• Swedish September household consumption was also released this morning. Consumption was estimated to have risen 1.1% M/M, but a significant downward revision to August (now -0.4% M/M vs 0.7% initial) suggests the reading should be taken with a handful of salt.
• Stats Sweden notes that “the statistics are considered final when they are no longer covered by any planned revisions.”, which run to 45 days after the end of the respective quarter.
• Notwithstanding that caveat, 3m/3m consumption growth accelerated for the fourth consecutive month to 1.4% (vs 1.2% prior), while annual growth was 3.5% Y/Y. All major industries except housing, water, electricity, gas and other fuels, and restaurants and accommodation services saw sequential growth in September. 3m/3m growth is also positive in 9/11 categories.
• Consumer confidence has been improving steadily since April last year, moving above the neutral 100 mark for the first time in 22 months in September. 

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