ECB: Stournaras Offers Unsurprising Support For April Cut

For a second day, a New York regional Fed survey showed significant weakness in the details in February. The NY Fed's Business Leaders Survey, which covers service firms in New York State, northern New Jersey and southwestern Connecticut, saw the headline business activity drop to a 14-month low -10.5 (-5.6 prior, no consensus). 

• But more worrying were some of the peripheral indicators, which may imply that tariff threats on Mexico and neighboring Canada hurt services sector confidence and are fueling concerns over supply chains and inflation (the survey was conducted between Feb 3 and Feb 11, so began just as President Trump agreed a 30-day pause on imposing tariffs on those countries):
• The business climate index fell to -35.6 (a 14-month low, from -21.8), which the NY Fed reports is "suggesting the business climate was considerably worse than normal."
• 6-month ahead expectations also pulled back: overall business activity by 8.7 points to 21.6 (4-month low), and business climate by 16.8 points to -3.6 (5-month low)
• The future supply availability index fell 25.3 points to -20.7  - around one-third of firms "expect supply availability to be worse in six months". This is easily a new low for the indicator which was launched in May 2024.
• The employment index fell for a 3rd consecutive month (-5.7), the first such span since Q1 2021. Expected employment and wages both dropped sharply.
• And like the Empire State manufacturing survey, inflation concerns picked up: expected prices paid up 2.2 points to 57.0  / expected prices received up 1.6 points to 37.3 (both 26-month highs). Current prices received jumped 8.0 points to 27.4, a 21-month high, with prices received up 2.8 points to a 9-month high 51.3.
• Like the Empire manufacturing report, the services survey doesn't mention "tariffs" - but it a warning sign that such dynamics could be repeated in other regional Fed and the national ISM/PMI surveys. Expectations for the Philly Fed February survey out Thursday shows a sharp pullback is expected, but the February flash PMIs are expected to see an uptick vs Jan.

• RES 4: 6205.38 0.764 proj of the Jan 13 - 24 - Feb 3 price swing     
• RES 3: 6200.00 Round number resistance 
• RES 2: 6178.75 High Dec 6 and key resistance
• RES 1: 6162.25 High Jan 24                 
• PRICE: 6132.00 @ 14:26 GMT Feb 19 
• SUP 1: 6075.54 20-day EMA           
• SUP 2: 6014.00/5935.50 Low Feb 10 / 3
• SUP 3: 5892.37 76.4% retracement of the Aug 5 - Dec 6 bull leg
• SUP 4: 5842.50 Low Jan 14

S&P E-Minis have faded off highs intraday, but remain firm and hold the bulk of the recent phase of strength. Attention remains on resistance at 6162.25, the Jan 24 high. Clearance of this level would expose the key resistance at 6178.75, the Dec 6 ‘24 high. A move above this hurdle would resume the primary uptrend. On the downside, initial key support has been defined at 6014.00, the Feb 10 low. A break would highlight a bearish development.

US Equities are set for a negative open, the pullback in futures was mostly Tech led as oppose to new fundamentals or Headlines.

European Estoxx has been trading in overbought territory, and was possibly due for some unwind, while the SPX reached a new all time record high Yesterday.

• Calls: SPX: 6,118.1 (-0.2%); DJIA: 44,429 (-0.3%/-128pts); NDX: 22,132.7 (-0.1%).