OUTLOOK: Price Signal Summary - S&P E-Minis Trend Needle Continues To Point North
Jun-21 09:35
- In the equity space, a bull theme in {US} S&P E-Minis remains intact and this week’s pullback appears to be a correction. Last week’s gains confirmed a resumption of the uptrend, marking an extension of the bull cycle that started in October 2022. The focus is on 4497.21, the top of a bull channel drawn from the Oct 2022 low (cont). Initial support is at 4381.75, the Jun 13 low. A firmer support lies at 4342.60, the 20-day EMA. {EU} EUROSTOXX 50 futures uptrend remains intact and this week’s move lower is considered corrective. Resistance at 4380.00, May 29 high, was cleared last week and key resistance at 4434.00, May 19 high, has been pierced. A clear break of this hurdle would represent an important bullish development and open 4448.00, Jan 2008 high (cont). MA studies are in bull-mode condition highlighting an uptrend. Initial firm support is 4303.00, Jun 7 low.
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OUTLOOK: Price Signal Summary - USDJPY Trend Needle Points North
May-22 09:34
- In FX, EURUSD trend conditions remain bearish following last week’s extension of the bear leg that started on Apr 26. The 50-day EMA, at 1.0881 and a former key support, has recently been breached. This strengthened bearish conditions and signals scope for a continuation lower towards 1.0737 next, 61.8% retracement of the Mar 15 - Apr 26 bull run. Clearance of this level would open 1.0713, the Mar 24 low. A firm resistance is seen at 1.0908, the 20-day EMA.
- GBPUSD maintains a softer tone following last week’s extension lower. The 50-day EMA which intersects at 1.2409, has been pierced. This average represents a key support and a clear break would strengthen current bearish conditions and expose 1.2345, the Apr 10 low. On the upside, firm resistance is seen at 1.2547, the May 16 high where a break is required to signal a possible reversal. First resistance is at 1.2493, the 20-day EMA.
- USDJPY bullish conditions remain intact following last weeks’ strong gains. A key resistance zone between 137.77-91, the May 2 and Mar 8 high respectively, has been cleared. The break strengthens bullish conditions and confirms a resumption of the uptrend that started on Jan 16. The focus is on 139.00 next. Initial firm support is seen at 135.78, the 20-day EMA.
BONDS: Constructive Start With Debt Limit Talks And Cenbank Speakers In Focus
May-22 09:27
Global core FI has had a constructive start to a week that begins quietly in terms of data (nothing of note in either the European or US calendars), with US debt limit intrigue and central bank speakers the primary focus Monday.
- UK and German curves are trading mildly bull flatter (yields down 1-2bp), with the US outperforming in a bull steepening move (2-5Y yields down 3+bp, 10-30Y down 1-2bp). Terminal central bank pricing is a little softer (ECB/BoE down 2 to 2.5bp, Fed off 1.1bp).
- Periphery spreads are tighter. Greek bonds are easily outperforming following a market-favorable outcome in Sunday's legislative elections (GGBs/Bunds 13bp narrower).
- The session's focus will be the debt limit talks between Pres Biden and House Speaker McCarthy which are set for this afternoon ET, no time specified as yet.
- Over the weekend, Tsy Sec Yellen warned that the odds of getting to June 15 without running out of cash were "quite low"; staff-level talks resumed Sunday.
- With no key data to be released, central bank speakers highlight the docket, including ECB's Lane, Villeroy, and Holzmann.
- For the FOMC, Bullard, Bostic, Barkin, and Daly are ahead - Kashkari over the weekend floated the idea of a "skip" of hiking at a meeting "to get more information", but not "any kind of declaration that we're done".
Latest levels:
- Jun US 10Y futures (TY) up 9.5/32 at 113-27.5 (L: 113-20 / H: 113-30)
- Jun Bund futures (RX) up 31 ticks at 134.55 (L: 134.12 / H: 134.68)
- Jun Gilt futures (G) up 47 ticks at 98.83 (L: 98.45 / H: 98.98)
- Italy / German 10-Yr spread 2.3bps tighter at 182.1bps
US TSY FUTURES: TU Blocked
May-22 09:25
Latest block trade lodged at 10:00:02 London/05:00:02 NY:
- TUM3 5,851 lots blocked at 102-23.125, looks like a buyer.
