EQUITIES: Eurostoxx 50 Futures Pierce Resistance at 50-Day EMA
Eurostoxx 50 futures have traded higher this week. The contract has cleared the 20-day EMA and has today pierced resistance at the 50-day EMA, at 5100.90. A clear break of this average would strengthen the current bull cycle and signal scope for a continuation of the corrective uptrend. This would open 5165.00 next, the Apr 3 high. On the downside, support to watch lies at 4812.00, the Apr 16 low. Clearance of this level would highlight a reversal. The corrective bull cycle in S&P E-Minis that started on Apr 7, remains in play for now. The contract has traded higher this week and in the process breached a number of important short-term resistance points. Price has cleared the 20-day EMA and pierced 5528.75, the Apr 10 high. The next key resistance to watch is 5625.35, the 50-day EMA. Initial key support lies at 5127.25, the Apr 21 low. A break would be bearish.
- Japan's NIKKEI closed higher by 666.59 pts or +1.9% at 35705.74 and the TOPIX ended 35.47 pts higher or +1.37% at 2628.03.
- Elsewhere, in China the SHANGHAI closed lower by 2.228 pts or -0.07% at 3295.06 and the HANG SENG ended 70.98 pts higher or +0.32% at 21980.74.
- Across Europe, Germany's DAX trades higher by 126.16 pts or +0.57% at 22185.34, FTSE 100 higher by 19.26 pts or +0.23% at 8426.41, CAC 40 up 56.84 pts or +0.76% at 7560.7 and Euro Stoxx 50 up 35.28 pts or +0.69% at 5150.2.
- Dow Jones mini up 8 pts or +0.02% at 40271, S&P 500 mini up 22 pts or +0.4% at 5534, NASDAQ mini up 86.25 pts or +0.45% at 19412.5.
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SWEDEN: Trade Balance Steady In Feb, No Signs Of Tariff Front-running Yet
The Swedish goods trade surplus was steady in February SEK14.4bln, with January’s reading revised down to SEK14.5bln from SEK15.1bln initial. On a 12-month rolling basis, the surplus rose to SEK72.6bln (vs SEK69.4bln prior), the highest since September.
- Partner-level trade data is only available as of January, so it is difficult to gauge whether any tariff front-running to the US has been at play. Of the threats already made by US President Trump against the EU, Sweden is most sensitive to proposed levies on vehicle exports (in Q3 2024, Swedish vehicle exports to the US accounted for 0.7% of GDP). However, data as of January doesn’t show a material pickup in vehicle exports just yet.
- The January trade surplus with the US was SEK6.8bln (vs SEK10.4bln prior). The 12-month rolling surplus fell a touch to SEK115.2bln (vs SEK115.5bln prior).
- The 12-month rolling trade deficit with Germany and China widened slightly in January.
- The volume of goods exports rose 4% Y/Y in January, while imports rose 2% Y/Y.
GILTS: /SWAPS: Citi Wary Of Downside Risks To Gilts Following Spring Statement
Ahead of the Spring Statement Citi note that “the initial reaction may be light given the apparent lack of meaningful positioning into the event, but we think it will be hard to find any positives for gilts”.
- The believe that “headroom greater than GBP10lbn likely requires larger unspecified spending cuts that the market will look through; a remit close to consensus likely implies an upward revision on 23 April; and of course, the fiscal position will remain precarious into a likely challenging Budget in the Autumn, including potential revisions to the OBR’s productivity assumptions and further increase in defence spending”.
- They conclude with “despite this, swap spreads have been trading well into today. This could suggest that the bad news is in the price. It is worth nothing, however, that while two of the last four fiscal events have led to richer gilt swap spreads on the day, for all four that has given way to cheapening over the following week on longer-term fiscal worries”.
COMMODITIES: WTI Futures Pierce Key Pivot Resistance at 50-Day EMA
Despite recent gains, a bearish trend condition in WTI futures remains intact. However, a key pivot resistance at $69.12, the 50-day EMA, has been pierced. A clear breach of this hurdle would strengthen a bullish theme and open $70.98, the Feb 25 high. For bears, a reversal lower would expose the bear trigger at $64.85, the Mar 5 low. Clearance of this level would resume the downtrend and open $63.73 next, the Oct 10 ‘24 low. A clear uptrend in Gold remains intact and the yellow metal is holding on to the bulk of its recent gains. Last Thursday’s fresh trend high reinforces the bull theme and sights are on $3079.2 next, a Fibonacci projection. Note that moving average studies remain in a bull-mode position, highlighting a dominant uptrend and positive market sentiment. Support is at $2970.1, the 20-day EMA.
- WTI Crude up $0.28 or +0.41% at $69.29
- Natural Gas up $0.09 or +2.27% at $3.927
- Gold spot up $5.15 or +0.17% at $3025.63
- Copper up $7.4 or +1.42% at $528.45
- Silver down $0.11 or -0.31% at $33.628
- Platinum down $4.26 or -0.43% at $976.6
