PERU: Analyst Views Following Peru CPI

The current bearish trend condition WTI futures remains intact and last week’s sell-off reinforces a bear theme. The move lower has resulted in a clear breach of support at $70.20, the Feb 6 low. This confirms a resumption of the downtrend that started on Jan 15 and paves the way for an extension towards $67.75, the Dec 20 ‘24 low. Key short-term resistance has been defined at $73.33, the Feb 11 high. A corrective phase in Gold remains in play and the yellow metal traded lower last week. Price has breached the 20-day EMA, at $2879.8. This signals scope for a deeper short-term retracement, possibly towards the next important support around the 50-day EMA, at $2804.6. For bulls, a resumption of gains would refocus attention on the next objective at $2962.2, a Fibonacci projection. This would also open the $3000.0 handle.

• WTI Crude down $0.31 or -0.44% at $69.42
• Natural Gas down $0.02 or -0.63% at $3.811
• Gold spot up $11.21 or +0.39% at $2869.33
• Copper up $0.75 or +0.16% at $455.3
• Silver up $0.26 or +0.84% at $31.4227
• Platinum up $5.15 or +0.54% at $954.31

The trend condition in the Eurostoxx 50 futures contract remains bullish and - for now - the latest shallow retracement appears corrective. The contract has pierced support at the 20-day EMA, at 5417.56. A clear break of this average would signal scope for a deeper retracement - note that the 50-day EMA lies at 5266.18. The EMA represents a key area of support. For bulls, a resumption of gains would open 5574.57 next, a Fibonacci projection. Recent weakness in the S&P E-Minis contract has resulted in a breach of a number of important supports; 6014.00, the Feb 10 low, and 5935.50, the Feb 3 low. The sharp move down signals scope for a deeper retracement and has exposed the next key support at 5809.00, the Jan 13 low. Clearance of this level would highlight a stronger reversal. On the upside, initial firm resistance to watch is 6038.96, the 50-day EMA.

• Japan's NIKKEI closed higher by 629.97 pts or +1.7% at 37785.47 and the TOPIX ended 47.47 pts higher or +1.77% at 2729.56.
• Elsewhere, in China the SHANGHAI closed lower by 3.972 pts or -0.12% at 3316.925 and the HANG SENG ended 64.95 pts higher or +0.28% at 23006.27.
• Across Europe, Germany's DAX trades higher by 187.69 pts or +0.83% at 22736.32, FTSE 100 higher by 25.03 pts or +0.28% at 8834.53, CAC 40 up 28.59 pts or +0.35% at 8138.46 and Euro Stoxx 50 up 16.61 pts or +0.3% at 5479.27.
• Dow Jones mini up 43 pts or +0.1% at 43929, S&P 500 mini up 12.75 pts or +0.21% at 5975.75, NASDAQ mini up 69.5 pts or +0.33% at 20987.

The Eurozone February manufacturing PMI saw a small upward revision to 47.6 (vs 47.3 flash, 46.6 prior), following upward revisions to the French and German prints and a stronger-than-expected Italian reading. From the report “Factory production came close to stabilising, with reductions in new orders – both total and from abroad – at their softest in nearly three years”. 

• However, a theme across the four major Eurozone economies was weaker employment: “Eurozone factories continued to cut their workforces, however. The rate of job shedding even accelerated, reaching its most substantial in four-and-a-half years”.
• On prices, Germany was an outlier in reporting falling input cost pressures. For the Eurozone overall: “Cost pressures facing eurozone factories intensified midway through the first quarter as the rate of input price inflation quickened to a six-month high. The latest data implied that these greater expenses were absorbed by companies as output charges were discounted marginally since January”.
• Confidence in the year-ago outlook nonetheless improved (albeit from a very low base): “The outlook for factory production over the next 12 months remained positive, with eurozone manufacturers predicting growth. Furthermore, the level of optimism was among the highest seen since Russia’s full-scale invasion of Ukraine three years ago”.