A Eurex publication focused on European financial markets, produced by MNl
Morning Briefing
March 30th 2016
Wednesday sees a busy day of data
in the euro area with the German
state and German federal inflation
data likely to be the standout events.
The European calendar gets
underway at 0700GMT, with the
publication of the Swiss KOF
Economic Barometer.
Also due at 0700GMT is the German
state of Saxony CPI data, with the
other state numbers due through the
rest of the morning.
At 0900GMT, the EMU Economic
Sentiment Indicator will be published,
along with the business climate
index, the consumer confidence
survey and the Industrial Sentiment
index.
Across the Atlantic, the US calendar
gets underway at 1100GMT, with the
publication of the weekly mortgage
applications index.
Back in Europe, the German Federal
CPI data will be released at
1200GMT.
Further US data will cross the wires
at 1215GMT, when the March ADP
Employment Report is released.
The US help-wanted online index will
be published at 1400GMT, while the
latest DOE weekly crude oil stocks
numbers are due for release at
1430GMT.
Chicago Federal Reserve Bank
President Charles Evans speaks to
the Forecasters Club of New York at
1700GMT, while BOC Deputy
Governor Lynn Patterson speech at
the Edmonton Chamber of
Commerce, starting at 1820GMT.
Late US data will see the US farm
price data released at 1900 GMT.
At 1245GMT, US Treasury Secretary
Jack Lew will deliver a speech on the
evolution of economic sanctions, in
Washington.
Global Economic Trading Calendar
Markets
FOREX: The US dollar continued to
trade with a heavy tone early in the
Asia-Pacific morning today following
dovish rhetoric from Fed Chair Yellen
last night. Although slightly positive
tone in some regional stock markets
have kept FX pairs afloat, the dollar's
recovery has been limited while the
aussie has been the exceptional
standout as it weakened despite the
US unit's falls. Aussie-dollar was last
at $0.7625, in a $0.7621 to $0.7648
range so far but not far from the
overnight close of $0.7627. Dollaryen traded a Y112.39 to Y112.81
range this morning and was last at
Y112.50 vs the US close of Y112.70.
Euro-dollar was held in a $1.1284 to
$1.1301 range this morning and last
trades at $1.1292. It closed at
$1.1291 last night.
US INDEX FUTURES: US stock
index futures are trading slightly
higher continuing to benefit from
Yellen's dovish comments on
Tuesday, with quarter-end buying
also looking to support the market.
Currently the Jun'16 e-mini S&P
futures are trading up 2.25 points at
2,049.75, the Jun'16 e-mini Nasdaq
futures are trading up 4.75 points at
4,463.00, while the Jun'16 e-mini
Dow futures are trading up 26 points
at 17,564.
US STOCKS CLOSE: US stocks
Tuesday took comfort from the
notion of U.S. yields remaining low
for longer. The DJIA closed up
0.56% at 17,633.11, the Nasdaq
Composite closed up 1.67% at
4,846.623 and the S&P 500 closed
up 0.88% at 2,055.01.
Today's DJIA highs were 17,642.81
and 2,055.91, not all that far from the
new 2016 highs of 17,648.94 and
2,056.60, posted March 22, and well
above their Dec. 31 closes of
17,425.03 and 2,043.94. The
Nasdaq today took out its March 22
peak of 4,835.599 to post a high of
4,849.308.
US TSY FUTURES: As expected it’s
been a very 'cautious' start for
treasury futures in early Asia after
Yellen's dovish comments on
Tuesday as the market awaits the
arrival for Asian investors, with
month-end/quarter-end/Japan fiscal
year-end flows set to dominate. With
the Yellen continuing to focus on
longer-term inflation expectations,
shorter-term has seen the price of
Lumber - a key component in
housing, sky rocket to post its
second limit-up session in 2-days
with the market continuing to benefit
from the surprisingly better-thanexpected pending home sales data
released on Monday. Lumber futures
are heading for their largest 1-month
gains since Dec'10 and are up 26%
this month to their highest price in
13-months. Technically today for
10yr futures key Fibonacci resistance
arrives at 130-045 (61.8% of the
131-14 to 128-01 sell-off), while the
previous high of 129-23 should offer
support. Currently 10yr futures are
trading unchanged from their close at
130-00.
JAPAN STOCKS: Japanese stocks
continue to be weighed down by a
strong yen, while the largest fall in
industrial output in
5yrs due to one-off factors is also
weighing in on sentiment. The Nikkei
has closed for lunch down 0.33% or
56.52 points at 17,047.01, while the
Topix is down 0.39% or 5.32 points
at 1,372.28.
PRECIOUS METALS: The dovish
two word ("proceed cautiously") reignition of precious metals strength
(and the obverse US dollar
weakness) from US Federal Reserve
Chairman Yellen at a speech
delivered at the Economic Club of
New York on Tuesday afternoon, has
been followed up in the Far East with
gains being pared on mild profit
taking in routine trade but with all
metals consolidating within sight of
the highs attained post-Yellen
comments in late US trade. Barring
any "out of left field" events like geopolitical developments (e.g. terrorist
incidents), the markets will now zero
in on US employment data
scheduled for release on April Fool's
Day.
OIL: WTI crude oil futures for May'16
delivery last up $0.41 at $38.69 per
barrel, after a $38.50 to $38.84
range in Asia today, recovering
through the day on the back of the
weaker USD across the board
overnight with Yellen's dovish tone
setting the standard. The DOE/EIA
inventory data are due Wednesday
and the market still has one eye on
Friday's Payrolls data, but for now a
bit of covering is due given the
contract has dropped over $4 in less
than two weeks before the late
recovery Tuesday and today,
although today's volume is still on the
low side of average.
Technical Analysis
BUND: (M16) Above 164.00 Shifts Focus To 164.75-166.63
*RES 4: 165.51 Low Feb 24 now resistance (continuation)
*RES 3: 164.75 Low Feb 23 now resistance (continuation)
*RES 2: 164.00 Monthly High Feb 29
*RES 1: 163.97 Bollinger band top
*PREVIOUS CLOSE: 163.79
*SUP 1: 163.40 High Mar 10 now support
*SUP 2: 163.07 Low Mar 29
*SUP 3: 162.19 Low Mar 21
*SUP 4: 161.93 Rising daily trend line
*COMMENTARY: The bounce from the base at 162.19 resulted in
further gains Tuesday that see immediate pressure shift to the
163.97-00 region where the Bollinger top is located. Bulls now look
for a close above 164.00 to shift focus to 164.75-166.63 where
2017 and record highs are located although the Bollinger band top
is expected to limit follow through. Bears now need a close below
163.07 to ease bullish pressure and shift immediate focus back to
161.80-162.19 where the rising trend line is noted.
EUROSTOXX: Breakout Around The Corner
*RES 4: 3130.46 High Jan 7
*RES 3: 3126.00 100-DMA
*RES 2: 3104.85 Bollinger band top
*RES 1: 3089.58 High Mar 17
*PREVIOUS CLOSE: 3004.87
*SUP 1: 2983.45 Low Mar 29
*SUP 2: 2958.82 55-DMA
*SUP 3: 2951.13 High Feb 26 now support
*SUP 4: 2941.40 Bollinger band base
*COMMENTARY: Bollinger bands continue to narrow which is
usually indicative of a breakout in the not too distant future. Bears
continue to look for a close below 2951.13 to confirm a break of
the 55-DMA and to shift overall focus back to tests of the 2016
low (2672.73) although initial focus with shift to the 2879.60
support. Bulls need a close above the 100-DMA to reconfirm a
bullish bias and initially target 3195.79-3253.88.
Eurex Futures Market Close
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