Feb 23, 2016 - Most importantly for stocks, the. CBOE's volatility index or VIX closed today at 19.38, the first sub 20,
A Eurex publication focused on European financial markets, produced by MNl
Morning Briefing February 23rd 2016 Tuesday throws up a busy day on both sides of the Atlantic, with a string of appearances from central bank officials.
Select Committee with three other MPC members - Deputy Governor Nemat Shafik and external members Martin Weale and Gertjan Vlieghe.
The European data calendar gets underway at 0700GMT, with the publicationof the German fourth quarter GDP data.
SNB Governing Board member Thomas Jordan speaks on monetary policy, in Frankfurt, starting at 1115GMT.
At 0745GMT, the French February services and manufacturing sentiment indices will be published, along with the business climate index.
The US data calendar kicks off at 1245GMT, with the publication of the latest RetailEcon-GS Store Sales.
At 0900GMT, the Germany February IFO business climate index will be published. Bundesbank board member Andreas Dombret will also speak, in Vienna, 0900GMT.
At 1330GMT, the US February Philly Fed non-manufacturing index wills cross the wires, with the latest Redbook Average at 1355GMT. Back in Europe, at 1400GMT, the Belgian National Bank February business survey will cross the wires.
There is no UK data set for release Tuesday, but at 1000GMT, Bank of
The US December S&P/CaseShiller Index will cross the wires at the same time.
England Governor Mark Carney appears in front of the Treasury
There is a raft of US data expected at 1500GMT, including the release of
Global Economic Trading Calendar
the January existing home sales, February Conference Board consumer confidence and the February Richmond Fed manufacturing index. The pace of existing home sales is expected to slow to a 5.35 million annual rate in January after sharp movements in the previous two months due to the timing of new government regulations. The level of consumer confidence is expected to decline to 97.2 in February after gains in the previous two months. The preliminary Michigan Sentiment Index fell to 90.7 from 92.0 in January. ECB Governing Council member Jan Smets will present the Belgium National Bank annual report, in Berchem, Belgium, starting at 1700GMT. At 1825GMT, Bundesbank Board member Andreas Dombret speaks at a forum, in Linz, Austria.
Markets FOREX: It's been a relatively uneventful morning for major FX pairs today, hardly any major data releases to guide trade flows. Yen pairs were under mild pressure this morning as the Nikkei reversed part of its early gains, while a weaker yuan fix also injected a risk-off feel to the session. Dollar-yen traded a Y111.99 to Y113.07 range today and was last at Y112.17. Aussie-dollar was last at $0.7229, after a $0.7212 to $0.7245 range. The mild risk-off theme however benefited eurodollar, which gained to $1.1046 earlier, and was last at $1.1042 near the top of the day's range. US INDEX FUTURES: US stock index futures are trading with a mild risk-off tone after a weaker-thanexpected CNY fixed saw risk appetite reduced which saw the Nikkei weaker on the back of a firmer Yen. Also there appears that there may be technical selling, after the emini S&P failed to clearly break above the 1939.00 level which represents the 50% of the 2,074/1,804 decline. Currently the Mar'16 e-mini S&P futures are trading down 7.75 points at 1,928.50, the Mar'16 e-mini Nasdaq futures are trading down points 20.00 points at 4,194.75 while the Mar'16 e-mini Dow futures are trading down 61 points at 16,480. US STOCKS CLOSE: US stocks started off the week on a positive note, underpinned by renewed risk appetite. The DJIA closed up 229 pts or 1.39% at 16,620.66, the Nasdaq Composite up 66 pts or 1.47% at 4,570.607, and the S&P 500 closed up 28 pts or 1.45% at 1,945.50.
This is the fourth day of a 1,900-plus close in the S&P. The S&P 500 posted nearly a two-year low of 1,810.10 Feb. 11, taking out the prior 2016 low of 1,812.29, posted Jan. 20, with these levels viewed as double-bottom support. A break below 1,800 would likely lead to large-scale stock selling. For EQ bulls to re-emerge, at minimum, the twin peaks of 1,947.20, seen Feb. 1 and 1,950.33, seen Jan. 13, must be vaulted decisively. The S&P 500 posted a high of 1,946.70 earlier. Most importantly for stocks, the CBOE's volatility index or VIX closed today at 19.38, the first sub 20, "risk friendly" reading since Feb 1.would suggest that sentiment towards U.S. equities was improving. US TSY FUTURES: The 'risk-off' post CNY-fix rally for treasury futures continues, with trade above the 131 handle in 10yr futures seeing some decent stop loss buying, with around 25k lots trading on the break of the figure. As per usual the move higher has coincided with a sharp rally in the Yen, however the Nikkei is still trading slightly positive on the day and is up 0.16%, although early trade saw it up some 1.25%. E-mini S&P futures however are trading with an offered tone (-6.50 points), with some also focused on the largerthan-expected dividend cut from the world's largest miner BHP, which could see other commodity producers follow suit and perhaps add to 'risk-off' sentiment. JAPAN STOCKS: After being as much as 1.25% higher in early trade, a weaker-than-expected CNY fix saw the
Yen surge leading to equities giving up nearly all of their earlier morning gains. The Nikkei has closed for lunch up 0.10% or 15.39 points at 16,126.44, while the Topix is down 0.14% or 1.81 points at 1,298.19. *PRECIOUS METALS: Platinum and silver modestly firmer, investors uninterested in palladium but gold is where all the interest has been in the precious metals this morning in the Far East, as investors yet again 'swoop and scoop' the dip - buying when the market looks ugly & selling when it looks good. There has been US dollar weakness against the JPY and the PBoC set the Yuan Central Parity rate 6.5273 (vs 6.5165 yesterday), which have undoubtedly assisted along with the Shanghai Composite Index which opened 0.05% down (2,925.71) and was 1.25% down at lunch (2,890.60), but given that gold has seen substantially elevated turnover for this point in the day compared with the other metals within the complex, the move appears to have been driven by genuine investor appetite OIL: WTI crude oil futures for Apr'16 delivery last down $0.42 at $32.97 per barrel, after a $32.92 to $33.45 range in Asia today, on moderate volume as the contract gives back some of Monday's gains. The contract rose strongly yesterday on the International Energy Agency's medium term report suggesting that, after a few years of stalling, oil production will head rapidly lower and they see prices closer to $80 by 2020, according to reports.
Technical Analysis BUND: (H16) Bouncing From Ahead Of Channel Base Again *RES 4: 167.35 166.49 1.500 RisingFibonacci weekly channel projection top (2014 166.16-163.79 & 2015 Lows) *RES 3: 167.07 166.16 1.382 2016 &Fibonacci Record high projection Feb 11166.16-163.79 *RES 2: 166.62 165.94 Rising Bollinger weekly bandchannel top top (2014 & 2015 Lows) *RES 1: 166.16 165.22 2016 High Feb & Record 12 high Feb 11, Bollinger top *PREVIOUS CLOSE: 164.26 165.43 *SUP 1: 164.85 164.10 Low Feb 19 9, Rising daily channel base *SUP 2: 164.63 163.25 Rising Low Feb daily 4 channel base *SUP 3: 163.93 162.77 21-DMA *SUP 4: 163.72 162.70 Low Feb Jan 29 8 *COMMENTARY: Bulls The lack takeofcomfort topsidefrom follow thethrough gains to Thursday start the was followed new weekupwith withH16 a sell-off bouncing and from bearish ahead close of Friday the rising thatdaily sees pressurebase. channel returnImmediate to the key focus 164.10 remains supports. on the Bears 2016 need & record to see high a closeabelow with close this above level shifting to confirm focusan to 166.62-167.59 easing of bullishwhere pressure Fibowith a close below projections and162.70 the daily then channel neededtop to (167.59) end bullish arehopes noted.and Bears shift immediate need a close focus below back 163.72 to 160.53-161.55. to confirm breaks Correcting of the 21-DMA O/B studies and are adding channel base weight and to hintthe at bearish a deeper case correction and above with165.23 below 162.70 is needed to provide160.53-161.55 targeting bulls with breathing wherespace. the 55-DMA is noted.
EUROSTOXX: Closes Above Channel Top & 21-DMA *RES 4: 3060.41 55-DMA *RES 3: 3055.38 High Jan 28 *RES 2: 2997.93 38.2% Fibonacci retracement 3524.04-2672.73 *RES 1: 2948.18 High Feb 3 *PREVIOUS CLOSE: 2933.91 *SUP 1: 2844.32 Low Feb 19 *SUP 2: 2786.21 Low Feb 15 *SUP 3: 2685.47 Bollinger band base *SUP 4: 2645.44 Low July 17 2013 *COMMENTARY: The index managed its first close above the 21-DMA, and 61.8% Fibo of the 3055.38-2672.73 move with the relatively bullish close leaving the key 2948.18 resistance in bulls sights. Bulls need a close above 2948.18 to confirm a bigger correction and to shift focus to 3055.77-3239.06 where 55 & 100DMAs and Fibo levels are noted. Bears now need a close below 2844.32 to gain breathing room.
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