JPY: Some upside extensions for the Yen
- The Yen is extending broader gains, at fresh intraday highs against the USD and GBP, US Treasuries have been underpinned so far today, and the big Risk Off tone may also be providing a bid, although not the same can be said for the Swissy, with the latter pretty much unmoved, but some USDCHF offers seems to be emerging now.
- There isn't much in terms of support in the USDJPY at current levels, most will look at 156.00 initially.
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COMMODITIES: WTI Futures Trading Above Monday's Lows, But Trend Remains Bearish
A bearish theme in WTI futures remains intact and the move lower from the Nov 7 high has reinforced a bear theme. Attention is on $65.74, the Oct 1 low, and $63.90, the Sep 10 low and key support. For bulls, a clear reversal to the upside would instead refocus attention on the key short-term resistance at $77.04, the Oct 8 high. Clearance of this level would resume the recent uptrend. Initial firm resistance is $72.41, the Nov 7 high. The long-term trend condition in Gold is unchanged, it remains bullish and the latest move down is considered corrective. Price has recovered from its recent lows. The 20-day EMA is at $2651.3. A clear break above it would highlight a possible reversal and signal the end of the recent bearish corrective cycle. This would open $2710.4, the Nov 11 high. Key short-term support lies at $2536.9, Nov 14 high. A break would resume the bear cycle.
- WTI Crude up $0.54 or +0.78% at $69.93
- Natural Gas up $0.05 or +1.7% at $3.049
- Gold spot down $10.64 or -0.4% at $2621.53
- Copper up $2.2 or +0.53% at $420.3
- Silver down $0.33 or -1.06% at $30.878
- Platinum down $9.43 or -0.97% at $965.16
EQUITIES: Medium-Term Trend Signals in E-Mini S&P Highlight Dominant Uptrend
A bearish condition in Eurostoxx 50 futures remains intact. A fresh cycle low this week marks a resumption of the downtrend that started Sep 30. Price has breached 4746.94, 61.8% of the Aug 5 - Sep 30 bull cycle. This exposes 4662.12, the 76.4% retracement point. Initial firm resistance has been defined at 4961.00, the Nov 6 high, where a break would highlight a reversal. First resistance is at 4848.22, the 20-day EMA. The latest move lower in the S&P E-Minis contract appears corrective. Medium-term trend signals such as moving average studies, continue to highlight a dominant uptrend. The contract has traded through the 20-day EMA. The next key support to monitor is 5834.60, the 50-day EMA. A clear break of this level would signal scope for a deeper retracement. A resumption of gains would refocus attention on the bull trigger at 6053.25, Nov 11 high.
- Japan's NIKKEI closed lower by 62.09 pts or -0.16% at 38352.34 and the TOPIX ended 11.74 pts lower or -0.43% at 2698.29.
- Elsewhere, in China the SHANGHAI closed higher by 21.979 pts or +0.66% at 3367.989 and the HANG SENG ended 41.34 pts higher or +0.21% at 19705.01.
- Across Europe, Germany's DAX trades higher by 104.32 pts or +0.55% at 19164.68, FTSE 100 higher by 19.4 pts or +0.24% at 8118.21, CAC 40 up 33.93 pts or +0.47% at 7262.25 and Euro Stoxx 50 up 27.84 pts or +0.59% at 4778.05.
- Dow Jones mini up 116 pts or +0.27% at 43521, S&P 500 mini up 11.75 pts or +0.2% at 5951.75, NASDAQ mini up 37 pts or +0.18% at 20809.25.
BUNDS: Danske Bank expect solid demand at today’s 30-year Bund auction
Danske Bank expect solid demand at today’s 30-year Bund auction.
- “Given the significant underperformance to swaps, we expect that life insurance companies and pension funds that use a EUR swap curve as the hedge for their liabilities will buy some very cheap 30Y Bunds”
- Buxl vs. 3-month Euribor spreads have tightened ~1bp today. See our earlier post for more colour there.
- The German curve has bear steepened this morning, with 30-year yields ~2.5bps higher. 5s30s remains comfortably within its November range at 37.5bps.
