FRANCE DATA: IP Stronger Than Expected; First M/M Increase Since Aug'24
France industrial production in February was two-tenths stronger than expected at 0.7% M/M (vs 0.5% consensus) following a weaker than expected reading of -0.5% in January (revised up from -0.6%). This is the first positive sequential reading since August 2024. This also led to the annual figure beating consensus, though still recording a decline of 0.4% Y/Y (vs -1.3% consensus, -1.2% prior revised from -1.6%).
- The M/M increase was driven by a firm increase in manufacturing production, whilst 'Mining and quarrying; energy; water supply; waste management' production declined moderating the overall increase.
- Manufacturing production (which makes up 81.78% of the overall 2025 industrial production weighting) rose 1.4% M/M, reversing January's fall of 0.5% and the highest sequential reading since May 2023.
- Within manufacturing, three of the five key subcomponents increased with the 'other manufacturing' category again being the driver rising 1.2% M/M following a decline 0.4% M/M in January. All sub components in this category rose, in particular 'textiles, wearing apparel, leather and related products' production increased 3.2% M/M following a fall of 0.4% in January.
- Manufacture of transport equipment also increased 3.2% M/M following a smaller rise of 1.1% in January. Both sub categories of 'motor vehicles, trailers and semi-trailers' production and transport equipment rose by 1.8% M/M (vs 7.2% prior) and 4.1% M/M (vs -2.4% prior) respectively.
- Manufacture of machinery and equipment goods increased 3.1% M/M recovering most of last month's decrease of 3.2%.
- Meanwhile, manufacture of food products and beverages fell 0.2% M/M after falling 0.1% in January and 'coke and refined petroleum products' production deteriorated 6.9% M/M after falling 2.1% in January.
- Outside of manufacturing, the remaining 18.22% weighting is made up of "mining and quarrying, energy water supply and waste management" production which fell 2.2% M/M following a fall of 0.1% in January.
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EQUITY TECHS: E-MINI S&P: (H5) Double Top Reversal Threat
- RES 4: 6178.75 High Dec 6 ‘24 and key resistance
- RES 3: 6166.50 High Jan 19
- RES 2: 6019.64 50-day EMA
- RES 1: 5884.00/5924.0 High Mar 4 / Low Feb 25
- PRICE: 5825.75 @ 07:12 GMT Mar 5
- SUP 1: 5744.00 Low Mar 4
- SUP 2: 5730.00 Low Sep 18 ‘24
- SUP 3: 5698.25 Low 50.0% retrace of the Aug 5 - Dec 6 ‘24 bull leg
- SUP 4: 5658.00 Low Sep 12 ‘24
A sharp sell-off in the S&P E-Minis contract this week, reinforces a short-term bear threat. The contract traded to a fresh short-term cycle low yesterday - price has breached support at 5809.00, the Jan 13 low. This highlights a stronger reversal and a double top pattern on the daily scale. A resumption of weakness would open 5698.25, a Fibonacci retracement. Initial firm resistance to watch is 6019.64, the 50-day EMA.
GILTS: Expect a Volatile Open
- Also for Supply this Morning, UK £4.25bn 2030, would equate to 20.5k Gilt, could weigh, although EGBs are already deep in the red, so will be a punchy open for the Gilt contract.
- At current levels, sees a whopping wide 91.43/92.52 range for Calls.
EUROSTOXX50 TECHS: (H5) Bullish But Support Remains Exposed
- RES 4: 5611.50 2.500 proj of the Nov 21 - Dec 9 - 20 ‘24 price swing
- RES 3: 5606.00 3.000 proj of the Dec 20 ‘24 - Jan 8 - 13 price swing
- RES 2: 5600.00 Round number resistance
- RES 1: 5575.00 High Mar 3 and the bull trigger
- PRICE: 5498.00 @ 07:02 GMT Mar 5
- SUP 1: 5373.00 Low Mar 4
- SUP 2: 5328.00 Low Feb 106
- SUP 3: 5281.53 50-day EMA
- SUP 4: 5112.00 Low Feb 3 and a key support
The trend in the Eurostoxx 50 futures contract remains bullish and Monday’s strong start to the week reinforces current conditions. However, the contract has traded in a volatile manner this week and pulled back from Monday’s high. Key S/T support at 5394.00, the Feb 28 low, has been pierced. A clear break of it would signal scope for a deeper retracement towards the 50-day EMA at 5281.53. For bulls, a resumption of the trend would open 5600.00.
