EUROSTOXX50 TECHS: (M5) Short-Term Corrective Cycle
- RES 4: 5270.00 High Apr 1
- RES 3: 5153.42 50-day EMA
- RES 2: 5026.21 20-day EMA
- RES 1: 5001.00 High Apr 9
- PRICE: 4836.00 @ 06:37 BST Apr 14
- SUP 1: 4664.00 Low Apr 10
- SUP 2: 4575.45 76.4% retracement of the Apr 7 - 9 bounce
- SUP 3: 4444.00 Low Apr 7 and the bear trigger
- SUP 4: 4336.00 Low Nov 28 ‘23 (cont)
Eurostoxx 50 futures traded in an extremely volatile manner last week and rallied sharply higher from recent lows. The climb highlights the start of a corrective cycle and if this is correct, marks an unwinding of the recent oversold trend condition. Resistance levels to watch are 5026.21, the 20-day EMA, and 5153.42, the 50-day EMA. Key support and the bear trigger has been defined at 4444.00, the Apr 7 low.
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
