EQUITIES: Recent Cycle Highs for Eurostoxx 50 Futures Strengthens Bull Theme

A bearish theme in WTI futures remains intact and the recovery since Jun 24 still appears corrective. The sharp reversal from the Jun 23 high continues to highlight scope for an extension lower. Support to watch is the 50-day EMA, at $65.74. The average has been pierced, a clear break of it would expose $58.87, the May 30 low. Initial resistance to monitor is $71.20, the 50.0% retracement of the Jun 23 - 24 high-low range. A bull cycle in Gold that started Jun 30 remains intact, and Monday’s bullish start to the week marks an extension of the recovery. $3395.1, the Jun 23 high, has been pierced. A continuation would open $3451.3, the Jun 16 high. Note that moving average studies are in a bull-mode position highlighting a dominant uptrend. The bear trigger is $3248.7, the Jun 30 low. An initial firm support to watch is 3282.8, the Jul 9 low.

• WTI Crude down $0.6 or -0.89% at $66.6
• Natural Gas down $0.05 or -1.38% at $3.279
• Gold spot down $7.8 or -0.23% at $3389.31
• Copper up $0.9 or +0.16% at $564.65
• Silver down $0.08 or -0.2% at $38.851
• Platinum down $3.18 or -0.22% at $1447.88

A bull cycle in Eurostoxx 50 futures remains in play and - for now - short-term weakness appears corrective. Support to watch is 5281.00, the low on Jul 1 and 4. A clear break of this price point would strengthen a bearish threat. A resumption of gains would refocus attention on key resistance and the bull trigger at 5486.00, the May 20 high. It has recently been pierced, a clear breach of it would resume the bull cycle that began Apr 7 and open 5500.00. S&P E-Minis traded to a fresh cycle high Monday before pulling back. The climb confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Note that moving average studies are in a bull-mode position highlighting a clear dominant uptrend. Sights are on 6381.50, a Fibonacci projection. Key support is at the 50-day EMA, at 6111.35. Support at the 20-day EMA is at 6256.07.

• Japan's NIKKEI closed lower by 44.19 pts or -0.11% at 39774.92 and the TOPIX ended 1.71 pts higher or +0.06% at 2836.19.
• Elsewhere, in China the SHANGHAI closed higher by 22.07 pts or +0.62% at 3581.861 and the HANG SENG ended 135.89 pts higher or +0.54% at 25130.03.
• Across Europe, Germany's DAX trades lower by 177.25 pts or -0.73% at 24128.87, FTSE 100 lower by 7.12 pts or -0.08% at 9006.05, CAC 40 down 32.85 pts or -0.42% at 7765.42 and Euro Stoxx 50 down 29.77 pts or -0.56% at 5313.02.
• Dow Jones mini up 7 pts or +0.02% at 44553, S&P 500 mini down 6.75 pts or -0.11% at 6337.75, NASDAQ mini down 57.75 pts or -0.25% at 23285.5.

ING remain bearish on longer-dated rates, but note that thinner summer liquidity could give rise to yield volatility in either direction:

• “Over the past few weeks, markets have largely treated tariff headlines as background noise, but with the August 1 deadline approaching, we may start to see more volatility”.
• “And with market liquidity thinning during the summer, any such moves may be amplified. The sharp decline in 30Y yields on Monday, for example, was difficult to justify from the news flow alone”.
• “The very long end of global yield curves will remain a source of volatility as the themes driving those moves are likely to linger. In Japan, there were elections over the weekend, but the fiscal outlook remains uncertain. Also, in the UK and numerous EU countries, government finances are at risk. Meanwhile, in the US, the independence of the Fed is being challenged"..."part of the rally in long-dated bonds on Monday may therefore be linked to headlines about Treasury Secretary Scott Bessent’s opposition to firing Fed Chair Jerome Powell".
• "All these drivers are unlikely to disappear overnight, which is a reason to remain more bearish on longer-dated rates”.