A Eurex publication focused on European financial markets, produced by MNl
Morning Briefing
October 5th 2015
Monday sees a busy data calendar
on both sides of the Atlantic, with the
services PMI data likely to be the
main releases.
There is little on the UK data
calendar, although the September
CIPS/Markit Services PMI will be
published at 0830GMT.
Across the Atlantic, the US calendar
gets underway at 1345GMT, with the
release of the September final Markit
services data.
The European calendar gets
underway at 0715GT, with the
publication of the Spanish
September final services PMI,
followed by the Italian data at
0745GMT,French at 0750GMT,
German at 0755GMT and the
amalgamated Euro area data
at0800GMT.
At the same time, the EMU October
Sentix Index will cross the wires.
At 1400GMT, the September LMCI
data, the Employment Trends Index
and the September nonmanufacturing ISM index will be
released.
ECB Governing Council member
Luis Maria Linde will speak in Madrid
at 0815GMT.
The EMU August retail sales data
will be released at 0900GMT, to be
followed by ECB Governing Council
member Benoit Coeure speaking in
Luxembourg.
UK Chancellor of the Exchequer
George Osborne will adress the
Conservative Party conference at
1100GMT.
Global Economic Trading Calendar
The ISM non-manufacturing index is
expected to decline to 57.8 in
September after falling to 59.0 in
August, but the index still indicates
solid services growth. Regional data
from the Richmond district suggested
considerably slower growth, while
the Dallas Fed services survey
pointed to moderately faster growth.
The flash Markit Services index fell
to 55.6 from 56.1 in August, an
indication of more modest
expansion.
Markets
FOREX: The US dollar was under
mild pressure this morning in the
Asia-Pacific, mainly following on from
the losses seen last Friday after a
disappointing payrolls report.
Regional equities markets were
however higher across the board,
taking their cue from Friday's positive
close on Wall Street and giving risk
sentiment a lift. Dollar-yen traded a
Y119.87 to Y120.10 range this
morning and was last at Y120.04
compared with the US close of
Y119.91 on Friday. The soft US data
also led to views that the BOJ may
consider further easing. The Nikkei
225 last up 1.41%. Elsewhere in the
FX space, aussie-dollar was last at
$0.7070, near the top of today's
$0.7035 to $0.7081 range and higher
than the Friday night close of
$0.7045. Australian markets are
closed today for a local holiday.
Euro-dollar was last at $1.1228,
compared with $1.1216 late Friday.
The pair held a $1.1206 to $1.1247
range this morning.
US INDEX FUTURES: US stock
index futures are trading slightly
weaker in quiet trade as Chinese
markets remain closed, while some
Asian based investors look to book
profits after Friday's rally. Currently
the Dec'15 e-mini S&P futures are
trading down 4.00 points at 1,939.00,
the Dec'15 e-mini Nasdaq futures are
trading down 8.50 points at 4252.75,
while the Dec'15 e-mini Dow futures
are trading down 45 points at 16,332.
US STOCKS CLOSE: US stocks
saw a nice rebound Friday after
selling off in response to a
disappointing NFP number. The
DJIA closed up 200 pts or 1.23% at
16,472.37, the Nasdaq Composite
up 81 pts or 1.74% at 4,707.775, and
the S&P 500 up 28 pts or 1.43% at
1,951.36. On Sept. 17, in the wake of
the Fed decision, these indexes
posted highs of 16,933.43, 4,960.868
and 2,020.86, the highest levels
seen since Aug 21, Aug 20 and Aug
21 respectively. The DJIA posted a
life-time high of 18,351.36 May 19,
the Nasdaq Composite a new lifehigh of 5,231.94 July 20 and the S&P
500 posted a life-time high of
2,134.72 May 20. At the earlier low
of 1,893.70, the S&P 500 held above
Wed's low of 1,887.14 and
Tuesday's low of 1,884.09. The next
topside target is the Sept 25 peak at
1,952.89.
US TSYS: Cash treasuries continue
to firm with cash 10's now 1.6bp
richer at 1.977%, with Asian
commercial bank buying seen.
Sources see a 1.95% to 2.02%
range for 10's today, with 1.90% the
big resistance level. Elsewhere 10yr
futures have continued to firm with
10yr futures currently up 5-ticks from
the close.
JAPAN STOCKS: Japanese stocks
have rallied during Monday's
morning session, buoyed by strong
gains on Wall Street, as well as
hopes of more BOJ easing after
wages data grew less than forecasts,
despite Japan's labour market
remaining tight.
The Nikkei has closed for lunch up
1.22% or 216.49 points at 17,941.62,
while the Topix is up 0.96% or 13.93
points at 1,458.85.
PRECIOUS METALS: With Friday's
US employment data release
dispensed with and with the metals
consequently advancing strongly,
Asian interest remains dampened by
the absence of Chinese investors
until Thursday. Far Eastern activity
so far today has seen gold trade
quietly within a narrow range on
limited volume but there has been
some interest around in the white
metals. Silver advanced marginally
above Friday's highs in early trading
before returning to Friday's closing
level. Platinum has seen quite
choppy activity between $910 &
$917 while palladium has held a bid
throughout the early part of the day,
moving solidly above the
psychological "big figure" at $700/oz.
Turnover in platinum and palladium
has been quite reasonable. The US
dollar has softened against the EUR
and AUD over the corresponding
period.
OIL: WTI crude oil futures for Nov'15
delivery last up $0.14 at $45.68 per
barrel, after a $45.21 to $45.76
range in Asia today, on low volume
with the Nov'15/Dec'15 spread taking
up about a quarter of the volume. A
weaker yen and stronger Nikkei has
the energy sector higher, but the
Friday high at $45.81 has held so far.
The Baker-Hughes rig count had a
dramatic drop on Friday which has
crude in a positive tone in terms of
potential output cuts, but the weekly
DOE/EIA inventory data estimates
are yet to be tallied..
Technical Analysis
BUND: (Z15) Daily Momentum Divergence
*RES 4: 157.89 High Apr 30 (continuation)
*RES 3: 157.67 High Oct 2
*RES 2: 157.40 Weekly Bollinger band top (continuation)
*RES 1: 157.15 Bollinger band top
*PREVIOUS CLOSE: 157.15
*SUP 1: 156.44 Low Oct 2
*SUP 2: 155.82 High Sept 25 now support
*SUP 3: 155.32 21-DMA
*SUP 4: 155.13 Low Sept 25
*COMMENTARY: Solid gains Thursday were followed up
with fresh 6 month highs to end the week with daily and
weekly Bollinger band tops seen limiting follow through. Of
some concern to bulls will be divergence on the daily
momentum study. In saying that, initial support is noted at
156.44 with bears needing a close below to ease bullish
pressure. A close below 155.82 is then needed to shift focus
back to layers of support 154.44-155.32. While 156.44
supports bulls target the short term channel top around
158.07.
EUROSTOXX: Above 21-DMA To Target 3266.7-3352.8
*RES 4: 3266.7 High Sept 10
*RES 3: 3199.0 High Sept 21
*RES 2: 3149.5 21-DMA
*RES 1: 3142.7 High Oct 1
*PREVIOUS CLOSE: 3088.2
*SUP 1: 3036.2 Low Oct 2
*SUP 2: 2994.5 Bollinger band base
*SUP 3: 2987.5 Low Sept 29
*SUP 4: 2973.1 2015 Low Aug 24
*COMMENTARY: The 21-DMA remains key resistance this
week. Bulls continue to look for a close above the 21-DMA to
end bearish hopes and shift focus back to 3266.7-3352.8
where the Bollinger top and 55-DMA are located. While the
21-DMA caps bears retain the upper hand and retain focus
on retests of 2015 lows although correcting modestly O/S
studies are less than ideal..
Eurex Futures Market Close
Contact MNI:
Clive Tillbrook – European Managing Editor + 44 207 862 7400, [email protected]
MNI Sales - [email protected], [email protected], [email protected]
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