Jun 22, 2016 - ahead to Thursday's UK referendum on EU membership. ... with the Bank of England Agents'. Summary of ...
A Eurex publication focused on European financial markets, produced by MNl
Morning Briefing June 22nd 2016 Traders and analysts will spend the first part of Wednesday poring over the overnight words of Fed Chair Janet Yellen, before then looking ahead to Thursday's UK referendum on EU membership. Also, a meeting of G20 finance ministers and central bankers, to be held in Xiamen China, will dominate early headlines. There is no early European data, with the Bank of England Agents' Summary of Business Conditions to be the first release, set for 0830GMT.
Fed Vice Chair Stanley Fischer will participate in a panel discussion on resolution at the Riksbank Macroprudential Conference in Stockholm, starting at1325GMT. IMF Managing Director Christine Lagarde will deliver a press conference on annual review of the U.S. economy, in Washington, starting at 1330GMT. The NAR existing home stores data will be published at 1400GMT. The pace of existing home sales is expected to accelerate further to a 5.55 million annual rate in May after gains in the previous two months.
Across the Atlantic, the US calendar will get underway at 1100GMT, with the release of the MBA weekly applications index Canadian May retail trade data will be released at 1230GMT. At 1300GMT, the FHFA Home Price Index will cross the wires.
Global Economic Trading Calendar
The pending home sales index surged by 5.1% in April to the highest level since February 2006, suggesting existing home sales will advance further in the coming months. The unadjusted index was up 2.9% from a year earlier. Federal Reserve Chair Janet Yellen gives the second part of her semiannualtestimony Weds, appearing before the House Financial Services Committee, in Washington, starting at 1400GMT. Further UK data will be published at the same time, when the EU consumer confidence indicator for June is released. The latest US DOE weekly crude oil stocks will be released at 1430GMT. Late US data will see the preliminary Treasury Allotments data released at 1900GMT. Washington, starting at 2030GMT.
Markets FOREX: A very subdued session today in the Asia-Pacific, the day before the key UK EU referendum, which is expected to roil markets across the globe. Comments from Fed's Janet Yellen last night offered up nothing new during her monetary policy testimony to the Senate Banking Committee. She will testify to the House later today. Dollar-yen marked a Y104.35 to Y104.87 range this morning and last trades at Y104.41. Euro-dollar held a $1.1236 to $1.1260 range through much of the session today before a late morning push to $1.1271 high, and was last at $1.1269. Aussie-dollar was last at $0.7465, at the upper end of a $0.7441 to $0.7471 range US INDEX FUTURES: US stock index futures are trading slightly weaker in quiet trade as the market counts down to the Brexit vote, with markets following the Nikkei and Hang Seng lower, which are off by around ~1%. Currently the Sep'16 emini S&P futures are trading down 1.75 points at 2,078.75, the Sep'16 e-mini Nasdaq futures are trading down 5.50 points at 4,395.00, while the Sep'16 e-mini Dow futures are trading down 12 points at 17,725. US STOCKS CLOSE: US stocks sported modest gains all day Tuesday, but still managed to close off the best levels of the day. The DJIA closed up 0.14% at 17,829.73, the Nasdaq Composite closed up 0.14% at 4,843.763 and the S&P 500 closed up 0.27% at 2,088.90. The S&P 500 posted a high of 2,120.55 June 8, the highest level since July 21, 2015, when the index peaked at 2,128.49, and then ratcheted lower
subsequently as risk aversion related to Brexit increased. Last Thursday's low of 2,050.37 was the lowest seen since May 23 (2,047.26 low). A decisive break above 2,100 will be needed for upward momentum to mount. The S&P 500 peaked Monday at 2,100.66 and today at 2,093.66. US TSYS: Cash treasuries have started Wednesday's session slightly higher, with CT10 last at 99-095 or 1.7020% compared to the close of 99-085 or 1.7059%. In a refreshing change from a Brexit obsessed market, news that North Korea has fired 2 missiles this morning is getting some attention, though unless they actually hit a target of substance it’s pretty safe to say the reaction will be very muted. Back to the Brexit vote, the latest odds from Ladbrokes have remain a 2/7, while leave is at 11/4, with Bloomberg's ODCLEAV index last around 25.82% chance of leaving. As for today traders see a 1.67%/1.71% range for cash 10's. 10yr futures currently up 0.5 at 131-085 JAPAN STOCKS: Japanese stocks have posted moderate losses during Wednesday's morning session as the countdown to the Brexit vote continues, with the Yen strengthening as investors pare risk appetite ahead of tomorrow's decision. That said, Softbank has risen some 2.8% on news it will be part of an acquisition to purchase Supercell- a game maker, with the CEO also stepping down, Bloomberg reports. Meanwhile Mitsubishi Motors fiscal-year 2017 loss is expected to exceed Y100 bln according to
Nikkei news. The Nikkei has closed for lunch down 1.03% or 166.51 points at 16,002.60, while the Topix is down 1.10% or 14.28 points at 1,279.62. GOLD: Spot gold last up $1.08 at $1269.20 per ounce, in a $1266.25 to $1270.84 range so far this morning in Asia, in a narrow range so far today after giving back some of the recent gains on Tuesday. The loss of the safe haven status due to the pricing out of the risk of a Brexit has been the main driver in recent sessions, but price action today suggests much of that has been cleaned out with the metal very tight in Asia. The mid-February to April range looms below and will provide solid support medium term, whilst short term the weaker USD should have the metal recovering some of the lost ground seen in the past few sessions. OIL: WTI crude oil futures for Aug'16 delivery last up $0.24 at $50.09 per barrel, after a $49.86 to $50.45 range in Asia today, on solid volume after the smaller sample API inventory data showed a very solid drop in weekly stockpiles of 5.2 million barrels. The DOE/EIA data are due Wednesday and analysts are also looking for a fall there. Otherwise the market continues to consolidate ahead of Thursday's UK referendum, whilst Fed chair Janet Yellen speaks again on Wednesday to the House. The contract is sitting in the middle of the resistance band and will need the event risk of coming days to be done with before extending the months-long advance. .
Technical Analysis BUND: (U16) 21-DMA Supporting For Now *RES 4: 166.63 2016 & Record high Feb 29 *RES 4: 166.63 2016 & Record high Feb 29 *RES 3: 165.68 High June 16 *RES 3: 165.68 High June 16 *RES 2: 165.29 High June 17 *RES 2: 165.29 High June 17 *RES 1: 164.72 High June 20 *RES 1: 164.72 High June 20 *PREVIOUS CLOSE: 164.35 *PREVIOUS CLOSE: 164.27 *SUP 1: 163.93 21-DMA *SUP 1: 164.01 21-DMA *SUP 2: 163.84 Low June 7 *SUP 2: 163.84 Low June 7 *SUP 3: 163.61 High Apr 11 now support *SUP 3: 163.61 High Apr 11 now support SUP 4: 162.97 55-DMA *SUP 4: 162.99 55-DMA *COMMENTARY: The pullback from last week’s highs continued *COMMENTARY: The pullback from last week’s highs continued Monday with correcting O/B daily studies adding weight to the Tuesday with the 21-DMA currently supporting. Bears take comfort bearish case. Immediate focus has now shifted to the 163.61-93 in the failure to break back above 164.72 so far. Bulls need a close region where the 21-DMA is located. A close below the 21-DMA above 164.72 to gain breathing room and shift focus back to the was last seen in early May. Layers of resistance continue to 165.29-68 region. Bears continue to look for a close below 163.61 accumulate. Bulls now need a close above 164.72 to gain to shift focus to 162.85-99 where the 55-DMA is found. breathing room and shift focus back to the 165.29-68 region. EUROSTOXX: Bulls Need Close Above 55-DMA *RES 4: 3107.57 200-DMA *RES 3: 3097.96 High May 31 *RES 2: 3054.42 High June 3 *RES 1: 2992.41 55-DMA *PREVIOUS CLOSE: 2967.34 *SUP 1: 2933.33 Low June 21 *SUP 2: 2893.63 Alternating daily support/resistance *SUP 3: 2791.70 Weekly Bollinger band base *SUP 4: 2784.90 Low June 16 *COMMENTARY: The recovery from last week’s low continues with the index currently flirting with 21 & 100-DMAs (2974.63 & 2971.63). Bulls continue to look for a close above the 55-DMA to end bearish hopes and shift focus to the 3054.42-3156.86 region where the 200-DMA is located. Initial support is now noted at 2933.33 with bears needing a close below to ease bullish pressure and below 2893.63 to shift focus back to 2016 lows.
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