EUROPEAN INFLATION: Spain upside and Germany upside risk: Implications not clear
- Spain this morning saw HICP surprise 0.2ppt to the upside - partly due to electricity prices and partly air fares and other transport fares.
- The German state data also now looks for upside risks (full tracking on that to follow later). At this stage it's unclear how much of that may also be influenced by air fares (the electricity prices seem to be idiosyncratic to Spain though).
- So it's hard at this point to really attribute how much of this upside surprise will look persistent and that may mean that the market reaction overall is more muted than it otherwise would have been.
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COMMODITIES: Gold Hits Fresh Record High Just Shy of $3900
WTI futures have pulled back from their recent gains. The contract has recently breached $65.43, the Sep 2 high and this has potentially improved the S/T condition for bulls. However, the next key resistance is at $68.43, the Jul 30 high, where a break is required to signal scope for a stronger recovery. For bears, a reversal lower would refocus attention on key support at $60.85, the Aug 13 low. A break of this level would reinstate the downtrend. The trend condition in Gold is unchanged and a bull cycle remains in play. The yellow metal has started the week on a bullish note, trading to a fresh cycle high, confirming a resumption of the primary uptrend. Note that MA studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on $3909.4, a Fibonacci projection. On the downside, support to watch lies at $3646.3, the 20-day EMA. A pullback would be considered corrective.
EQUITIES: Bull Cycle in E-Mini S&P Intact, Key Resistance at 6756.75
Eurostoxx 50 futures maintain a bullish theme. Yesterday’s gains resulted in a breach of key resistance and the bull trigger at 5525.00, the Aug 22 high. The break confirms a resumption of the uptrend and paves the way for a climb towards 5564.82, a Fibonacci projection. Moving average studies remain in a bull-mode position, highlighting a dominant uptrend. Initial firm support lies at 5442.85, the 20-day EMA. A bull cycle in S&P E-Minis remains intact. Key short-term resistance has been defined at 6756.75, the Sep 22 high where a break would resume the primary uptrend. This would open 6787.63, a Fibonacci projection. On the downside, the contract has recently pierced initial support at the 20-day EMA, currently at 6647.54. A clear breach of this average would signal scope for a deeper retracement, potentially towards the 50-day EMA, at 6526.11.
- Japan's NIKKEI closed lower by 111.12 pts or -0.25% at 44932.63 and the TOPIX ended 6.03 pts higher or +0.19% at 3137.6.
- Elsewhere, in China the SHANGHAI closed higher by 20.245 pts or +0.52% at 3882.777 and the HANG SENG ended 232.68 pts higher or +0.87% at 26855.56.
- Across Europe, Germany's DAX trades lower by 9.43 pts or -0.04% at 23734.38, FTSE 100 lower by 22.57 pts or -0.24% at 9276.91, CAC 40 down 24.38 pts or -0.31% at 7855.23 and Euro Stoxx 50 down 7.45 pts or -0.14% at 5499.07.
- Dow Jones mini down 87 pts or -0.19% at 46527, S&P 500 mini down 9.75 pts or -0.15% at 6704, NASDAQ mini down 32.75 pts or -0.13% at 24805.5.
MNI: ITALY SEP FLASH HICP 1.8% Y/Y (VS 1.7% FCAST, 1.6% AUG)
- MNI: ITALY SEP FLASH HICP 1.8% Y/Y (VS 1.7% FCAST, 1.6% AUG)
