JGB TECHS: (H6) Shallow Bounce Off Lows

The S&P(ESZ5) overnight range was 6525.00 - 6677.50, SPX closed +0.98%, Asia is currently trading around 6650. Some dovish Fed speak on Friday and some headlines that Trump is floating the idea of allowing Nvidia H200 chips sales to China managed a bounce to end the week for risk, albeit from lower levels. Lets see how risk starts the week but Crypto has had a good bounce over the weekend and has helped Equity futures open up positive, can this extend ? The Bulls will be hoping for the 6500 area to continue to hold but I remain wary because of last week's price action and suspect we will see sellers return toward the 6750/6800 area should we see it. This morning the futures have opened strongly, E-minis(S&P) +0.50%, NQZ5 +0.70%. 

• Technically the S&P is still in an uptrend while the support toward 6500 holds, but this rounded top together with last week's price action looks foreboding to me.
• Nick Timiraos posted an excerpt from Bessent's interview with CNBC in which he said, “Bessent: Inflation is up because of services, not goods. "If you look at the data, that imported goods, the inflation has actually been flat. Inflation is up because of the service economy and services. So that has nothing to do with tariffs."
• The S&P 500 Index Average True Range(ATR) for the last 10 Trading days: 123 Points

Fig 1: S&P 500 Index Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
• RES 2: 95.960 - High Apr 7 (cont.)
• RES 1: 95.900 - High Oct 17
• PRICE: 95.545 @ 16:08 GMT Nov 21
• SUP 1: 95.485 - Low Nov 20  
• SUP 2: 95.415/95.300 - Low May 15 / Low Jan 14 
• SUP 3: 95.275 - Low Nov 14  (cont) and a key support

Aussie 10-yr futures slipped lower again mid-week on the back of hotter-than-expected jobs data, compounding the impact of the inflation data earlier in the month. The sustainability of the pullback will be dependent on prices holding above key short-term support at 95.510, the Sep 3 low. Near-term resistance remains 95.780, the Sep 12 high. A clear break of this level signals scope for a continuation higher and opens 95.960, the 76.4% retracement level for the Sep’24 - Nov’24 downleg. 

USD/CNH spot tracks near 7.1065/70 in early Monday dealings, after a 0.17% gain on Friday. This brings USD/CNH downside risks back into play, although dips under 7.1000 have been supported back to mid Sep in the pair. Broader USD indices consolidated around recent highs, although USD/JPY saw a pullback, which may have helped CNH at the margins. Spot USD/CNH finished up at 7.1052, while the CNY CFETS basket tracker rose to 98.22, up a further 0.11% to fresh highs since April. 

• USD gains stalled as NY Fed President Williams saw scope for further near term easing, which saw market pricing for a Dec cut firm. US-CH yield differentials have rolled back over, the 2yr spread last back to +206bps, which is still above Oct lows (near +190bps).
• The CNH/JPY cross pulled back as yen gained close to 0.70% for Friday's session (as the intervention threat stepped up, while lower US yields also helped). We saw the pair get under 22.00, but we track slightly above this level in early Monday dealings, with an uptrend still intact (the 20-day EMA support point is around 21.75). Recent highs rest close to 22.19.
• Friday saw a better session for the Golden Dragon index in US trade, up 1.23%, but we were still down for last week. The CSI 300 slipped to 4453.6, off 3.77% last week.
• On the data calendar, we have Oct industrial profits out on Thursday, in an otherwise quiet data week.