May 23, 2016 - data and traded down to a fresh low of Y109.64 ... futures trading only slightly lower on the day ... *SU
A Eurex publication focused on European financial markets, produced by MNl
Morning Briefing May 23rd 2016 Monday sees a steady start to the week on the data front, with only limited releases, but the flash PMI data will be a standout feature. The European calendar gets underway at 0700GMT, with the release of the flash French services and manufacturing PMI data. The flash German data will be published at 0730GMT, with the amalgamated euro area numbers set for release at 0800GMT. The euro zone release will include the flash composite index.
At 1015GMT, St. Louis Federal Reserve Bank President James Bullard will deliver a speech on the economy and monetary policy, in Beijing, followed by media availability
U.S. Treasury's Counsellor to the Secretary Antonio Weiss will speak at SIFMA's Fixed Income Market Structure Seminar in New York, starting at 1735GMT.
At 1200GMT, San Francisco Federal Reserve Bank President John Williams speaks on approaches to monetary and fiscal policy, in New York.
Late US data will see the preliminary April US Treasury Allotments published at 1900GMT.
The US flash May Markit Manufacturing Index will be released at 1345GMT.
Global Economic Trading Calendar
At 2230GMT, Philadelphia Fed President Harker will speak to the Philadelphia Council for Business Economics followed by press availability in Philadelphia.
Markets FOREX: Yen strength was the dominant theme for the Asia-Pacific region, the move was generated by the release of Japanese Trade data, where both imports and exports were worse-than-expectated. Market players dumped Japanese equities, the Nikkei 225 was down near 2.0% at one stage before paring some losses. Dollar-yen was sold postdata and traded down to a fresh low of Y109.64 from an earlier high of Y110.24. The pair was last at Y109.74. Euro-dollar was again in consolidation mode and traded sideways within a $1.1208 to $1.1243 range, last at $1.1240. Meanwhile, Aussie-dollar benefitted from mild US dollar weakness, edging higher from $0.7217 to a top so far of $0.7254 and was last at $0.7252. US INDEX FUTURES: US stock index futures are trading slightly higher after spending most of the morning session in Asia in negative territory, as a strong Yen and poor export data weighed in on the Nikkei before recovering. Currently the Jun'16 e-mini S&P futures are trading up 0.75 of a point at 2,050.75, the Jun'16 e-mini Nasdaq futures are trading up 4.75 points at 4,367.00, while the Jun'16 e-mini Dow futures are trading up 10 points at 17,492. US STOCKS CLOSE: The DJIA closed up 66 pts or 0.38% at 17,500.94, the Nasdaq Composite closed up 57 pts or 1.21% (tech stocks did better) at 4,769.558 and
the S&P 500 closed up 12 pts or 0.60% at 2,052.32. The S&P 500 posted a 2016 high of 2,111.05 April 20 and subsequently moved lower. This week, the week, the index took out its 55-day moving average, currently at 2,054.35 to post a low of 2,025.91 Thursday, the lowest level since March 24. At the time, the market fretted a retest of the 200-day moving average, which comes in Friday at 2,011.08. The S&P 500 will need to close above the 55-day moving average for global investors to become a bit more bullish. Traders attributed Friday's stock gains to weekend repositioning after the index failed to move lower earlier. US TSYS: Although treasuries are trading with a small risk-off bid, it been a quiet session overall for treasuries with cash only seeing some ~$950 mln trade in the first 2hours or so. Flows so far from sources have seen Japanese regional and Asian commercial bank buying of 10's and Asian real-money buying of 2's. The predominant theme this morning has been the reversal of the US Dollar fortunes, namely against the Yen, as the G-7 meeting over the weekend disappointed some longs, while the trade data was worse-than-expected resulting in further Yen strength. This has seen the Nikkei shed 1.75%, while elsewhere has seen iron ore and steel futures have fallen close to 5%, with e-mini S&P and crude futures trading only slightly lower on the day (down 3.00 point and 21c respectively).
JAPAN STOCKS: Japanese stocks have staged a late recovery late in the morning session but still remain well down at the lunch break. Earlier saw poor trade data and a an uneventful G7 see the Yen strengthen pressuring stocks, with exporters leading the declines. This saw the Nikkei fall as much as 1.90% before recovering. The Nikkei last traded down 0.54% at 16,646.28, while the Topix is down 0.50% at 1,336.65 GOLD: Spot gold last up $2.55 at $1254.70 per ounce, in a $1249.13 to $1256.25 range so far this morning in Asia, with trade seeing the metal recover slightly as the USD weakens against most majors today in Asia. Resistance above $1280 to $1300 proved decisive in the last few weeks with talk of producer selling, but a pullback from the greenback and a trader market coming to terms with the Fed's potential rate hike in June has produced tentative buyers here OIL: WTI crude oil futures for Jul'16 delivery last down $0.26 at $48.15 per barrel, after a $48.09 to $48.50 range in Asia today, in a somewhat lacklustre trading session across Asia today. Whilst there's been solid movement in Chinese commodities, the rest of the sector has been dull. The Baker Hughes rig count stabilised in data released late Friday, which has led to some slight downward pressure but that pressure had already been ongoing at the end of last week, with the Canadian fires now under control and news of Iranian supply ramping up.
Technical Analysis BUND: (M16) 55-DMA Supporting *RES 4: 164.91 Bollinger band top *RES 3: 164.75 Low Feb 23 now resistance (continuation) *RES 2: 164.60 High Apr 11 *RES 1: 163.96 High Apr 18 *PREVIOUS CLOSE: 163.63 *SUP 1: 163.07 55-DMA *SUP 2: 162.67 Low May 4 *SUP 3: 161.85 100-DMA *SUP 4: 161.84 Low May 2 *COMMENTARY: The 55-DMA confirmed significance as support Thursday with M16 having bounced from this level again Friday. Bears continue to look for a close below 162.67 to confirm a break lower and shift focus to 161.46-84 where the 100-DMA is noted. Bulls continue to look for a close above 163.96 to ease pressure on key supports and shift focus back to the 164.60-85 region. A correcting O/B slow stochastic is still adding weight to the bearish case.
EUROSTOXX: Above 55-DMA To Ease Bearish Pressure *RES 4: 3145.37 200-DMA *RES 3: 3067.61 Alternating daily support/resistance *RES 2: 3011.45 55-DMA *RES 1: 2989.28 100-DMA *PREVIOUS CLOSE: 2962.16 *SUP 1: 2893.63 Low May 6 *SUP 2: 2860.32 Monthly Low Apr 7 *SUP 3: 2847.83 Bollinger band base *SUP 4: 2786.21 Low Feb 15 *COMMENTARY: Despite daily studies correcting from O/S levels, bulls have been unable to take out key DMAs 2989.283011.45. Bulls look for a close above the 55-DMA to ease bearish pressure and above 3067.61 to shift immediate focus back to the 200-DMA. While the 100-DMA caps, immediate bearish focus remains on a break of the 2860.32-2893.63 region that targets a retest of 2016 lows.
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