FRANCE AUCTION PREVIEW: LT OATs

A bearish theme in WTI futures remains intact and the latest recovery, including Monday’s  gains, appears to be a correction. A resumption of weakness would expose $65.99, the Oct 1 low, and $64.16, the Sep 10 low and key support. For bulls, a clear reversal would instead refocus attention on the key S/T resistance at $77.70, the Oct 8 high. Clearance of this level would resume to the recent uptrend. Initial resistance is $72.34, Oct 24 high. The trend condition in Gold is unchanged and the latest pullback is - for now - considered corrective. Recent gains resulted in a breach of $2685.6, the Sep 26 high, confirming a resumption of the primary uptrend and maintaining the price sequence of higher highs and higher lows. Sights are on the $2800.0 handle next. Firm support is $2712.7, the 20-day EMA. A clear break of this EMA would highlight a short-term top.

• WTI Crude up $0.4 or +0.56% at $71.81
• Natural Gas up $0.01 or +0.36% at $2.791
• Gold spot up $2.32 or +0.08% at $2739.33
• Copper up $3.5 or +0.79% at $446.6
• Silver up $0.16 or +0.49% at $32.6115
• Platinum up $10.45 or +1.06% at $996.36

Eurostoxx 50 futures are trading closer to their recent lows. Last week’s move down, resulted in a breach of support at 4914.00, the Oct 16 low. Note that 4884.06, 38.2% of the Aug 5 - Sep 30 bull cycle, has also been cleared. This exposes 4815.50 next, the 50.0% retracement point. Initial firm resistance has been defined at 5015.00, the Oct 29 high, where a break is required to highlight a reversal. First resistance is at 4936.69, the 20-day EMA. S&P E-Minis traded sharply lower last Thursday and the contract is trading just above its recent low. Price has cleared both the 20- and 50-day EMAs - an important short-term bearish development. The break lower signals scope for an extension and has exposed the next support at 5724.00, the Oct 2 low. Clearance of this level would open 5637.60, a Fibonacci retracement. Initial firm resistance is 5816.84, the 20-day EMA.

• Japan's NIKKEI closed higher by 421.23 pts or +1.11% at 38474.9 and the TOPIX ended 20 pts higher or +0.76% at 2664.26.
• Elsewhere, in China the SHANGHAI closed higher by 76.78 pts or +2.32% at 3386.987 and the HANG SENG ended 439.45 pts higher or +2.14% at 21006.97.
• Across Europe, Germany's DAX trades higher by 63.78 pts or +0.33% at 19211.92, FTSE 100 higher by 27.74 pts or +0.34% at 8211.89, CAC 40 up 22.41 pts or +0.3% at 7393.75 and Euro Stoxx 50 up 14.04 pts or +0.29% at 4866.11.
• Dow Jones mini up 48 pts or +0.11% at 42004, S&P 500 mini up 11 pts or +0.19% at 5754.25, NASDAQ mini up 69.75 pts or +0.35% at 20155.5.

Crude oil futures have pierced yesterday’s highs.

• October 24 highs ($72.34 for WTI and $76.08 for Brent) present initial upside targets, with overarching bearish technical themes intact.
• Our commodities team attributes today’s uptick to weather conditions around the U.S. Gulf.
• They note that Tropical Storm Rafael is expected to intensify this week and could disrupt about 4mbbl of US Gulf of Mexico oil production. Shell and are moving non-essential staff to shore from several platforms ahead of the storm.
• Elsewhere, oil markets are awaiting the outcome of the U.S. election and the FOMC decision, while risks of an escalation of the conflict in the Middle East persist.