Monday: JN GDP, JN Industrial Production, UK Rightmove House Price Index, GE PPI, Buba Monthly Report (tentative), EU Current Account, US Chicago Fed National Activity
Tuesday: AU RBA Meeting Minutes, SP Trade Balance, EU Consumer Confidence, UK CBI Industrial Trends Orders, Inflation Report Hearing, US Existing Homes Sales, Weekly API Inventories, NZ GDT Price Index, Retail Sales, Fed's Powell, Rosengren to speak
Wednesday: JN Trade Balance, UK CPI/RPI/PPI, House Price Index, PSNB, GE 10-yr Govt Bond Auction, US Weekly DoE Inventories, FOMC Meeting Minutes, CA Retail Sales, ECB's Draghi, Praet, BoJ's Harada, Fed's Bullard, Bostic to speak
Thursday: AU Manufacturing/Service PMI, JN Manufacturing PMI, GE GDP, FR/GE/EU Manufacturing/Service PMI, FR Business Survey, Unemployment Rate, GE Ifo Business Climate, Financial Stability Report, SP 3/5/10-yr Govt Bond Auction, ECB Meeting Minutes, UK Retail Sales, US Weekly Jobless Claims, Manufacturing/Service PMI, New Homes Sales, KC Fed Manufacturing Index, NZ Trade Balance, Fed's Barkin, Bostic, Daly, Kaplan to speak, European Parliamentary Election: UK, NE
Friday: JN National CPI, SP PPI, US Durable Goods Orders, Baker Hughes Rig Count, European Parliamentary Election: IR
Sunday: European Parliamentary Elections: FR,GE,IT,SP
MACRO & TECHNICAL OVERVIEW – Sam North (@snorth19)
S&P 500 Futures
A positive week for the S&P, although the Dow Jones and Nasdaq were less fortunate. The ‘Trade War’ is still the main driver/risk to where these markets end up going and with Donald Trump’s trigger twitter fingers it is imperative to be on full alert. Looking at the Calendar Highlights for the week ahead it will be quite interesting to see what the minutes from the FOMC on Wednesday show but even in the event of a hawkish/dovish surprise I’m not so sure it could be the catalyst for a larger, more extensive move.
With that said, where do we go from here? On the Futures, the 2900 handle is an important level and a good line the sand for the bears to defend. If price was to break and close above that area, the bulls would feel confident of price once again making a new all-time-high.
To the downside, 2780-90 is somewhere to keep an eye on. The 200DMA, the low of the 25th March and also a couple of trend-lines all match up around there. In my opinion, Trump knows what he is doing, he has seen what good and bad trade headlines do to the market and is simply biding his time – with the 2020 election for a final big push above the current highs. How we get there might not be so simple.
WTI Crude Oil
A positive week for Oil but the failure to close above the top of the monthly range could be telling. The positive push into the back end of the week would have helped support US equities but at the time of writing we are just starting to see low of the days being printed for both Oil and Stocks. A headline from an unreliable Twitter source stating ‘China trade talks with the US are halted’ has filtered into the market, which accompanied by some technical breaks has seen a steady move lower.
This will likely be the theme for the week, a comment here and there in between a couple of data highlights and in all honesty, predicting where we end the week is a gamble. My opinion is the same as Equities – we come lower before going higher but with the geopolitical tensions propping up Oil price last week, a continuation of that would help buoy the market again.
Technically, I would be happy to wait for the trend-lines to come into play before getting in from a medium-term point of view or wait for a break above $65 towards the high of the year.
A key technical break lower from the trend-line starting on the previous low of the year has left this market once again favouring the downside. Comments from Salvini haven’t helped things, as he twice echoed his hawkish rhetoric stating how Italy needed a Trump like reaction.
On the flip side we saw a brief Euro rally across the markets on the suspension on US Tariffs on EU Auto for 6 months. The EURGBP has continued to push higher, Friday marking the 10th consecutive day of gains. Some half decent data out of the US and perhaps some safe haven flows have meant this pair has continued its trend lower.
Unless we break back above 1.1200 and the broken trend-line I would be looking for area to get short for a test of those yearly lows and beyond.
Trade Ideas for the Week Ahead
Charlie Hyett – Junior Market Analyst (CO_Hyett)
Entry: Short on previous Support (5th & 9th May) turned Resistance
Target: Lows of the year
Stop: Above resistance
Tommaso Iaquone – Junior Market Analyst (@tommasoiaquone)
Entry: Short on break of trendline
Target: Next trend-line OR low of 3rd Jan
Stop: Above break of trend
Have a great trading week and any questions please do let us know!
Sam North - Associate
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