EQUITIES: Eurostoxx 50 Futures MA Studies Remain in Bull Mode Setup
The trend condition in Eurostoxx 50 futures remains bullish, with prices edging to a new alltime high on the continuation contract. The move higher last week confirmed once again, a resumption of the uptrend that started on Nov 21 ‘24. Moving average studies are in a bull mode set-up too, highlighting a dominant uptrend. Support to watch is 5325.83, the 20-day EMA. S&P E-Minis continue to climb and the contract maintains a firmer tone. Attention is on resistance at 6162.25, the Jan 24 high. Clearance of this level would expose the key resistance at 6178.75, the Dec 6 ‘24 high. A move above this hurdle would resume the primary uptrend. On the downside, initial key support has been defined at 6014.00, the Feb 10 low. A break would highlight a bearish development.
- Japan's NIKKEI closed lower by 105.79 pts or -0.27% at 39164.61 and the TOPIX ended 8.26 pts lower or -0.3% at 2767.25.
- Elsewhere, in China the SHANGHAI closed higher by 27.049 pts or +0.81% at 3351.539 and the HANG SENG ended 32.57 pts lower or -0.14% at 22944.24.
- Across Europe, Germany's DAX trades higher by 51.82 pts or +0.23% at 22895.36, FTSE 100 lower by 9.44 pts or -0.11% at 8757, CAC 40 down 15.83 pts or -0.19% at 8191 and Euro Stoxx 50 up 1.47 pts or +0.03% at 5534.71.
- Dow Jones mini up 40 pts or +0.09% at 44682, S&P 500 mini up 5 pts or +0.08% at 6151.25, NASDAQ mini up 25 pts or +0.11% at 22255.5.
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FOREX: CIBC Forecasting Just One BOJ Rate Hike in 2025, Recommend Long USDJPY
- CIBC are expecting the BOJ to hike this week, however, given most of the move is already priced in, they believe a hike would have minimal impact. Furthermore, CIBC expect the tone of the meeting will be dovish, which would dampen market enthusiasm of pricing in more hikes to come and they only expect the BoJ to deliver one hike this year.
- With this said, and counter to intuition, CIBC like positioning for USD/JPY appreciation ahead of the hike, and have recommended a tactical long at 156.00, with a target of 159.50 and a stop at 154.00
- Bolstering the trade, CIBC highlight that the Fed is more open to pausing, and with the US data not weak enough to warrant immediate cuts, a slower-than-anticipated pace for the Fed should dispel (or at least limit) any anticipation of rapid central bank divergence between US and Japan.
- Additionally, still attractive carry and a lower correlation to deteriorating risk sentiment should be supportive of the trade.
BUNDS: Block and Swap trades
Bund block trade, suggest seller.
- RXH5 ~2.12k at 131.67.
Bund Swap related trade suggest Payer:
- RXH5 1.84k at 131.72.
STIR: CORRECT: Some SOFR Spread Flow In Early London Trade
Although U.S. liquidity is set to be limited by the MLK holiday, early London trade has seen some spread flow.in SFRU5/M6, with paper paying -2.0 on 11.2K. That may have been triggered by activity in SFRM5/M6, which saw paper pay -9.0 on 2.4K at the same time.
