STIR: UBS Maintain Receive ECB Dec '25 Recommendation, Focus On EUR FX

WTI futures traded higher last week, resulting in a clear break of resistance around the 50-day EMA. The climb signals scope for an extension towards $65.82, the Apr 4 high. It is still possible that the recovery since early May is a correction. Moving average studies are in a bear-mode position, highlighting a dominant medium-term downtrend. Support to watch lies at $59.74, the May 30 low. A break would highlight a potential bearish reversal. A bullish theme in Gold remains intact and the latest pullback is considered corrective. Medium-term trend signals are bullish - moving average studies remain in a bull-mode position, highlighting a dominant uptrend. A resumption of gains would refocus attention on $3435.6 next, the May 7 high. A break of this hurdle would strengthen bullish conditions. On the downside, the next support to monitor is $3240.0, the 50-day EMA.

• WTI Crude down $0.03 or -0.05% at $64.54
• Natural Gas down $0.08 or -2.11% at $3.705
• Gold spot up $11.18 or +0.34% at $3321.12
• Copper up $1.05 or +0.22% at $486
• Silver up $0.33 or +0.92% at $36.299
• Platinum up $41.05 or +3.51% at $1209.23

The trend cycle in Eurostoxx 50 futures remains bullish and the contract is trading closer to its recent highs. Moving average studies are in a bull-mode position, highlighting a clear dominant uptrend. Sights are on 5516.00, the Mar 3 high and the key bull trigger. Clearance of this level would strengthen a bull theme. Key support to watch lies at 5280.33, the 50-day EMA. A clear break of this average would signal a possible reversal. The trend condition in S&P E-Minis is unchanged, it remains bullish and the contract traded to a fresh cycle high last week. The recent break of 5993.50, the May 20 high and a bull trigger, highlights a resumption of the uptrend and maintains a price sequence of higher highs and higher lows. A continuation would open 6057.00 next, the Mar 3 high. Key support lies at 5789.75, the 50-day EMA.

• Japan's NIKKEI closed higher by 346.96 pts or +0.92% at 38088.57 and the TOPIX ended 16.08 pts higher or +0.58% at 2785.41.
• Elsewhere, in China the SHANGHAI closed higher by 14.413 pts or +0.43% at 3399.771 and the HANG SENG ended 388.89 pts higher or +1.63% at 24181.43.
• Across Europe, Germany's DAX trades lower by 80.35 pts or -0.33% at 24223.6, FTSE 100 lower by 3.83 pts or -0.04% at 8834.14, CAC 40 down 0.8 pts or -0.01% at 7804.07 and Euro Stoxx 50 down 8.75 pts or -0.16% at 5421.42.
• Dow Jones mini up 31 pts or +0.07% at 42838, S&P 500 mini up 4.75 pts or +0.08% at 6011, NASDAQ mini down 4.5 pts or -0.02% at 21783.75.

• Alongside the noted dollar slippage on Monday, buoyant equity benchmarks are prompting AUD and NZD to outperform as cautious optimism surrounding the US/China talks provide tailwinds to the higher beta ccys.
• Kiwi leads the charge in G10, and NZDUSD has broken back above an important zone of resistance between 0.6025/40. Spot continues to threaten a daily close above the US election related highs, signalling scope for a more protracted recovery towards 0.6168, the 76.4% retracement of the Sep ’24 – Apr ’25 selloff. Initial resistance is seen at 0.6080, last week’s high print.
• For AUDUSD, last Thursday’s close above 0.6500 was the highest in 6 months, and Monday’s resumption of strength keeps trend signals bullish. The pair’s recent clearance of 0.6515 (May 7 high) confirmed a resumption of the uptrend and signals scope for an initial climb to 0.6550, a Fibonacci retracement and the Nov 25 high. It is worth noting that US election related highs remain the medium-term target at 0.6688.
• In Australia this week, consumer and business confidence data is due, as well as consumer inflation expectations. New Zealand BusinessNZ Manufacturing PMI figures will be released.