BUNDS: Some interest is noted in the Bobl - 5s/10s
- There is something happening in the Bobl of late, at least Volume-wise.
- These have closely matched some of Volumes seen Bund in the past few sessions, or since that large Rate repricing that started last Week into this Week in the Euribor futures strip.
- As highlighted last Week, there has been interest for Investors to discount further cut from the ECB in 2026, while looking to start pricing hikes from 2027 into the 3yr, 4yr Horizon (Green, Blue, Gold strip).
- Some of the flows (Volumes) could be related to the curve after the 5s/10s and 5s/30s saw some Curve flatteners led by the shorter end 2yr Schatz and Euribor.
- The German 5s/10s is a more interesting chart and could help explain the Higher liquidity seen in 5/10s part of the curve.
(Chart Source: MNI/Bloomberg Finance LP).
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MNI: GERMANY ZEW NOV ECONOMIC EXPECTATIONS 38.5
- MNI: GERMANY ZEW NOV ECONOMIC EXPECTATIONS 38.5
- GERMANY ZEW NOV CURRENT CONDITIONS -78.7
COMMODITIES: Recent Weakness in WTI Futures Appears to Be a Flag Formation
Recent weakness in WTI futures appears to be a flag formation - a bullish continuation pattern. This suggests that an upward corrective cycle remains intact for now. Price has recently traded through the 50-day EMA, at $60.84, signalling scope for a stronger recovery. Note too that resistance at $62.34, the Oct 8 high, has been pierced. A clear move through it would expose key resistance at $65.77, Sep 26 high. The bear trigger is $55.96, the Oct 20 low. The downleg in Gold since Oct 20 appears to have been a correction and has allowed an overbought condition to unwind. Recent gains also suggest the correction is over. Price remains above a key support at the 50-day EMA, at $3890.0.0. Clearance of this EMA would signal scope for a deeper retracement. Initial resistance is at $4161.4, the Oct 22 high. A stronger recovery would refocus attention on $4381.5, the Oct 20 high and bull trigger.
- WTI Crude up $0.31 or +0.52% at $60.43
- Natural Gas down $0.04 or -0.9% at $4.299
- Gold spot up $26.6 or +0.65% at $4142.81
- Copper down $3 or -0.59% at $507.5
- Silver up $0.44 or +0.86% at $50.9589
- Platinum up $21.06 or +1.34% at $1594.96
EQUITIES: Trend Condition in E-Mini S&P Bullish Despite Breach of 50-Day EMA
A medium-term bull trend in Eurostoxx 50 futures remains intact and recent weakness appears to have been a correction. Price has managed to find support below two important price points; the 50-day EMA, at 5580.70, and 5577.00, the base of a bull channel drawn from the Aug 1 low. A clear break of both levels would strengthen a bear theme and highlight a stronger reversal. Sights are on the bull trigger at 5742.00, the Oct 29 high. The trend condition in S&P E-Minis remains bullish and the pullback since the Oct 30 high appears corrective. The contract has managed to find support below the 50-day EMA, currently at 6716.03 and a key support. Friday’s activity also highlights a potential reversal signal - a bullish doji candle. This defines key support at 6655.50, the Oct 7 low. A continuation higher would signal the end of a correction and open 6953.75, Oct 30 high and bull trigger.
- Japan's NIKKEI closed lower by 68.83 pts or -0.14% at 50842.93 and the TOPIX ended 4.16 pts higher or +0.13% at 3321.58.
- Elsewhere, in China the SHANGHAI closed lower by 15.839 pts or -0.39% at 4002.758 and the HANG SENG ended 47.35 pts higher or +0.18% at 26696.41.
- Across Europe, Germany's DAX trades higher by 43.61 pts or +0.18% at 24004.77, FTSE 100 higher by 82.95 pts or +0.85% at 9870.23, CAC 40 up 53.2 pts or +0.66% at 8108.98 and Euro Stoxx 50 up 31.22 pts or +0.55% at 5695.69.
- Dow Jones mini down 32 pts or -0.07% at 47430, S&P 500 mini down 15 pts or -0.22% at 6841.75, NASDAQ mini down 101.5 pts or -0.39% at 25613.5.
