EQUITIES: Eurostoxx 50 Futures Narrow Gap to Key Resistance and Bull Trigger
Eurostoxx 50 futures have traded higher this week as the contract extends the recovery that started Jun 23. This exposed key resistance and the bull trigger at 5486.00, the May 20 high. It has been pierced, a clear break would confirm a resumption of the medium-term bull cycle that began Apr 7, and would open the 5500.00 handle. On the downside key support has been defined at 5194.00, the Jun 23 low. The trend condition in S&P E-Minis remains bullish and the contract is trading closer to its recent highs. Resistance at 6128.75, the Jun 11 high, has recently been breached. The break confirmed a resumption of the uptrend that started Apr 7. This was followed by a breach of key resistance and a bull trigger at 6277.50, the Feb 21 high. Sights are on 6356.12, a Fibonacci projection. Key support is at the 50-day EMA, at 6032.93.
- Japan's NIKKEI closed lower by 174.92 pts or -0.44% at 39646.36 and the TOPIX ended 15.82 pts lower or -0.56% at 2812.34.
- Elsewhere, in China the SHANGHAI closed higher by 16.632 pts or +0.48% at 3509.682 and the HANG SENG ended 136.05 pts higher or +0.57% at 24028.37.
- Across Europe, Germany's DAX trades higher by 63.82 pts or +0.26% at 24615.38, FTSE 100 higher by 93.46 pts or +1.05% at 8961.07, CAC 40 up 49.68 pts or +0.63% at 7928.14 and Euro Stoxx 50 up 18.57 pts or +0.34% at 5464.22.
- Dow Jones mini down 108 pts or -0.24% at 44614, S&P 500 mini down 8.25 pts or -0.13% at 6299, NASDAQ mini down 16.25 pts or -0.07% at 23037.
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EGB OPTIONS: DUQ5 107.2/107.1/106.9 Put Ladder Lifted
107.2/107.1/106.9 put ladder paper paid 0 for the 1 on 5K.
EGBS: Multi-Week Weakness In OATs Vs. Peripherals Also Underscores French Risks
OATs have also started to falter vs. peripherals in recent weeks, after a relief rally seen in early ’25, underscoring the aforementioned, ongoing French political & fiscal risks.
- The 10-Year BTP/OAT spread is ~23bp lower than the April closing highs, last ~26bp.
- Meanwhile, OATs have cheapened by ~10bp on the SPGB/OAT/PGB 10-Year fly over the same horizon after a recovery from the January post-GFC closing low.
Fig. 1: SPGB/OAT/PGB 10-Year Butterfly (bp)
ECB: Nothing New From Rehn Yet, But Important To Track His Comments
Headline crossing from Bank of Finland Governor Rehn:
- "ECB REHN: WILL TAKE DECISIONS MEETING BY MEETING" RTRS
- "*ECB'S REHN: MUST BE READY TO ACT AS AND WHEN NEEDED" bbg
Nothing surprising from Rehn - he said as much last week. We consider Rehn to be a pragmatic, dovish-leaning member of the Governing Council, and generally a good barometer of the median view.
- As such, we generally don't expect him to give any kind of guidance/rate outlook straight after a meeting. However, as new data/developments enter the picture, he usually provides a clearer view. His comments will be important to watch closer to the July and September decisions.
