EQUITIES: Primary Trend Set-Up in Eurostoxx Futures is Bullish
The primary trend set-up in Eurostoxx 50 futures is bullish and the pullback from the Aug 22 high appears corrective. However, the contract has breached 5371.32, the 50-day EMA. The clear break of this average strengthens a short-term bearish threat and signals scope for a deeper retracement towards 5166.00, the Aug 1 low and a key support. On the upside, initial resistance to watch is 5387.15, the 20-day EMA. A bull cycle in S&P E-Minis remains intact and the latest pullback is - for now - considered corrective. Price has traded through the 20-day EMA. The key support to watch lies at the 50-day EMA, at 6340.81. A clear break of this EMA is required to signal scope for a deeper retracement. This would open 6239.50, the Aug 1 low and a key support. Moving average studies still highlight a dominant uptrend. The bull trigger is 6523.00, the Aug 28 high.
- Japan's NIKKEI closed higher by 641.38 pts or +1.53% at 42580.27 and the TOPIX ended 31.28 pts higher or +1.03% at 3080.17.
- Elsewhere, in China the SHANGHAI closed lower by 47.681 pts or -1.25% at 3765.876 and the HANG SENG ended 284.92 pts lower or -1.12% at 25058.51.
- Across Europe, Germany's DAX trades higher by 79.48 pts or +0.34% at 23675.77, FTSE 100 higher by 1.62 pts or +0.02% at 9180.1, CAC 40 down 25.56 pts or -0.33% at 7694.15 and Euro Stoxx 50 down 1.99 pts or -0.04% at 5323.02.
- Dow Jones mini down 34 pts or -0.08% at 45274, S&P 500 mini up 9 pts or +0.14% at 6466.25, NASDAQ mini up 49 pts or +0.21% at 23497.75.
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EGBS: Danske Bank Expect Good Demand At Today's Schatz Auction
- Danske Bank expect decent demand at today’s E5bln 1.90% Sep-27 Schatz auction, given the outright level for yields. They also note that “if we look at the bid-to-cover for the Schatz auctions, then they have been steadily rising since early 2024 and this year the average is 2.6 relative to 2.3 in 2024 and 1.7 in 2023”.
- “This is related to the steady cheapening versus other EGBs as well as SSAs and swaps such that it has become more attractive just to hold Schatz as the supply of SSAs and covered with a maturity of 2 years is modest”.
US-EU: EU Off.-Expect Further "Turbulence" In Talks, But Have Solid Foundation
More comments from an unnamed EU official talking on trade with the US are being reported by Reuters. Says "We are really trying to get as many products as possible into the list of US tariff rate exemptions, at [a] zero-for-zero rate." Official: "We believe [that] medical products should be in the zero-for-zero tariff rate, or at most favoured nation rate, along with some chemicals and wines."
- The official acknowledges "We are not here to say we have fundamentally solved everything in one go", adding the EU expects some "turbulence", but "we have set up a solid foundation for ourselves."
- In what has become a game of one-upmanship between US trading partners trying to tout the benefits of their own deal, the EU official highlights the 15% tariff facing EU cheese exports to the US, compared to 24.9% for the UK.
- The high-profile meeting between German Finance Minister Lars Klingbeil and US Treasury Secretary Scott Bessent offered little in the way of signs of future trade talks. A brief readout from the US simply acknowledged the deal rather than any discussions of its content.
EQUITY OPTIONS: Estoxx Call Fly buyer
SX5E (19th Sep) 5400/5600/5800c fly, bought for 33 in 7.5k vs 1.2k at 5260.
