EQUITIES: Recent Gains in E-Mini S&P Considered Technically Corrective
The medium-term trend direction in Eurostoxx 50 futures is up and recent short-term weakness is considered corrective. Support to watch is the 50-day EMA, at 5293.33. It has recently been pierced. A clear break of it would highlight a stronger short-term bear threat and suggest scope for a retracement towards 5160.00, the Feb 4 low. The bull trigger is 5516.00, the Mar 3 high. Clearance of this level would resume the uptrend. S&P E-Minis are trading at their recent highs. The trend condition is bearish and the latest recovery appears corrective. MA studies remain in a bear-mode set-up, highlighting a dominant downtrend. However, this week’s gains have resulted in a breach of the 20-day EMA. This signals scope for a continuation higher near-term - towards 5864.25, the Jan 13 low. A reversal lower would refocus attention on 5559.75, the Mar 13 low and bear trigger.
- Japan's NIKKEI closed higher by 246.75 pts or +0.65% at 38027.29 and the TOPIX ended 15.37 pts higher or +0.55% at 2812.89.
- Elsewhere, in China the SHANGHAI closed lower by 1.279 pts or -0.04% at 3368.697 and the HANG SENG ended 139.07 pts higher or +0.6% at 23483.32.
- Across Europe, Germany's DAX trades lower by 37.19 pts or -0.16% at 23073.46, FTSE 100 higher by 15.83 pts or +0.18% at 8679.66, CAC 40 down 18.66 pts or -0.23% at 8089.93 and Euro Stoxx 50 down 9.36 pts or -0.17% at 5465.72.
- Dow Jones mini down 31 pts or -0.07% at 42875, S&P 500 mini down 5 pts or -0.09% at 5821.25, NASDAQ mini down 27 pts or -0.13% at 20460.75.
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CROSS ASSET: Some early reversals in European cross assets
- Some early unwind in Europe, the Estoxx futures has fully pared the overnight gains to close its opening gap down to 5450.00, printed a 5448.00 low.
- Bund seems to be heading the same way, the opening gap for the contract, would be up to 132.60, ahead of the Initial resistance at 132.97.
- The Dollar is still in the red against G10s, but the Currency is paring losses, to edge towards flat on the Day, EURUSD is still up a small 0.19%.
STIR: J.P.Morgan Recommend Receiving 1y1y €STR
J.P.Morgan recommend receiving 1y1y €STR.
- They believe that “the €STR curve is not pricing enough downside risk-premium”, with growth remaining on a soft trajectory and the U.S. tariff backdrop further tilting economic risks to the downside.
- They acknowledge that they “do not expect any sharp sustained repricing lower of terminal rate expectations over the near term but a gradual decline over the coming months and therefore prefer to trade tactically at the front-end of the curve”.
CROSS ASSET: MONTH END EXTENSION
Bloomberg Bonds:
- US Tsys: +0.12yr (Large).
- EU Govies: +0.08yr (Average).
- UK Govies: -0.03yr (non event).
- JGBs: +0.04yr (small).
