EQUITIES: Stock Futures Point to Higher Open Wednesday
Aug-06 09:20
US Equities sold off sharply Friday on the back of the soft NFP print - pushing prices through mid-July lows in the process. This puts price well clear of support at the 20-day EMA, at 6325.25, signalling scope for a deeper retracement. The trend condition in Eurostoxx 50 futures faltered Friday, with short-term weakness resulting in a break of the bear trigger. Having shown below 5194.00, the Jun 23 low, the April 30 hi/lo range at 5078-5138 becomes the area of downside interest.
- Japan's NIKKEI closed higher by 245.32 pts or +0.61% at 40794.86 and the TOPIX ended 30.03 pts higher or +1.02% at 2966.57.
- Elsewhere, in China the SHANGHAI closed higher by 16.397 pts or +0.45% at 3633.995 and the HANG SENG ended 8.1 pts higher or +0.03% at 24910.63.
- Across Europe, Germany's DAX trades higher by 41.44 pts or +0.17% at 23887.69, FTSE 100 higher by 13.77 pts or +0.15% at 9156.33, CAC 40 up 19.85 pts or +0.26% at 7640.89 and Euro Stoxx 50 up 11.6 pts or +0.22% at 5261.19.
- Dow Jones mini up 159 pts or +0.36% at 44401, S&P 500 mini up 21.75 pts or +0.34% at 6347, NASDAQ mini up 43 pts or +0.19% at 23175.25.
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GBP: USD Bounce Has Major Pairs Testing Key Levels
Jul-07 09:05
- The USD's bounce Monday is providing some relief for the USD Index, which now sits 1% above last week's cycle lows to put the currency on a surer footing. As a result, the major pairs are seeing pressure toward the the post-NFP lows - with EUR/USD and GBP/USD challenging 1.1718 and 1.3586 respectively.
- Rates markets are endorsing USD gains here: the US curve is steeper as the global long-end continues to underperform. This backdrop, allied with any deterioration in trade relations between the US and the RoW remains a key market focus, particularly with the fluidity around Trump's approach to tariffs and the suite of reciprocal trade tariff deadlines looming over markets this summer.
- A correction lower through 1.3563 would be consequential for GBP/USD, and raise the likelihood of a test on the 50-dma support in the near-term. This level has held well and helped define the rally over the course of 2025 - crossing at 1.3477 today. In trend terms, we note that the 50-dma now trades with the largest % premium over the 200-dma since the bounce off lows in 2009. The premium currently sits at ~4.2% vs. the 2009 peak of ~8.2%, mid-Global Financial Crisis.
MNI: EUROZONE MAY RETAIL SALES -0.7% M/M, +1.8% Y/Y
Jul-07 09:00
- MNI: EUROZONE MAY RETAIL SALES -0.7% M/M, +1.8% Y/Y
EUROZONE DATA: May Retails Sales Weak As Expected, Non-Food & Fuel Carry Y/Y
Jul-07 09:00
Eurozone (real) retail sales were overall broadly in line with (weak) expectations in May on a sequential comparison, at -0.7% M/M (-0.6% M/M cons; +0.3% April, revised from +0.1%).
- Across sectors, all main categories fell: Food, drinks, tobacco -0.7% M/M, non-food products (except automotive fuel) -0.6%, automotive fuel -1.3% - neither of the categories has exhibited a clear directional trend YTD.
- Also across countries, May weakness appears quite broad-based, with Spain the strongest out of the "big 4" EZ countries at a mere 0.2% M/M.
- The overall Y/Y print was 1.8% in May, a bit firmer than consensus of 1.4% (2.7% Apr, revised from 2.3%). Across categories, previous trends prevail here: Non-food products and auto fuel tend to fare better than the food, drinks, tobacco category.
- Consumer confidence gives a rather weak outlook for retail sales in the Eurozone: "Consumer confidence remained broadly stable [on a, we would say, weak level of -14.8]. Although consumers were notably less pessimistic about the future general economic situation in their respective country, their intentions to make major purchases over the next 12 months dropped. Additionally, their perceptions of both their household’s past and expected financial situation deteriorated somewhat", the European Commission commented on the latest respective release.
- A June McKinsey study found that inflation remains consumers' main concern in the EU, although this has decreased compared with last year.
