Tuesday: JN BoJ Core CPI, GE GfK Consumer Climate, Import Price Index, 2-yr Schatz Auction, FR Consumer Confidence, IT Trade Balance, SP Business Confidence, EU M3 Money Supply, Private Sector Loans, Business Climate, Consumer Confidence, Services/Industrial Sentiment, UK Gross Mortgage Lending, House Price Index, US House Price Index, CB Consumer, Dallas Fed Manufacturing Business Index, 2-yr/5yr Note Auction, NZ RBNZ Financial Stability Report, US President Trump visits Japan
Wednesday: NZ ANZ Business Confidence, FR Consumer Spending, CPI/PPI, GDP, GE Unemployment Change/Rate, IT Business/Consumer Confidence, GE 5-yr Bobl Auction, EU ECB Financial Stability Review, UK BRC Shop Price Index, US Richmond Fed Manufacturing, 7-yr Note Auction, Weekly API Inventories, CA BoC Interest Rate Decision, RBNZ's Orr, BoJ's Kuroda, ECB's Weidmann speak
Thursday: AU Building Approvals, NZ Budget Balance, Economic Forecast, SP CPI, IT 5/10-yr Auctions, US Weekly Jobless Claims, GDP, Goods Trade Balance, PCE Prices, Real Consumer Spending, Wholesale Inventories, Pending Home Sales, Weekly DoE Inventories, Treasury Department Report (tentative), CA Current Account, Fed's Clarida, BoC's Wilkins speak, **Ascension Day, many continental European markets closed
Friday: JN Industrial Production, Retail Sales, Unemployment Rate, Tokyo CPI, Housing Starts, CN Manufacturing/Non-Manufacturing PMI, AU Housing Credit, GE CPI, Retail Sales, IT GDP, CPI/PPI, SP Current Account, UK Mortgage Approvals, Lending, BoE Consumer Credit, Nationwide House Price Index, US Core PCE Price Index, Personal Income/Spending, Chicago PMI, Michigan Consumer Sentiment, Baker Hughes Rig Count, CA GDP, Budget Balance, ECB's Visco to speaks
**Due to US Memorial Day Holiday, Non-Farm Payrolls is due on 7th June 2019
MACRO OVERVIEW - Anthony Cheung (@AWMCheung)
· An update on the European Election results (02:50)
· The performance of the Brexit Party and what does it mean for the Conservative leadership race (06:27)
· Italy back in the spotlight as the EU threat a $4bln penalty in failing to curb debt (12:25)
· A look at the main calendar highlights for the week ahead (13:22)
· Sam North gives an overview of the technical set-up across different asset classes (16:31)
TECHNICAL OVERVIEW – Sam North (@snorth19)
S&P 500 Futures
In my opinion – Donald Trump has this market exactly where he wants it and is just biding his time for a push higher in correlation with the build up to the 2020 election race. Timing the buying opportunity back towards the All-Time-Highs will be tricky, it could be because of a series of positive trade comments, continued or further dovish rhetoric by the FED or a sharp recovery in Oil price.
Therefore, it might be beneficial to use a technical break higher of the trend-line for example before committing to getting Long again. To the downside, 2790.00 on the Futures is still is key. The 200 daily moving-average, the low of the 25th March and a potential re-test of a key trend-line would all reside around that area and offer, at least technically, a good level of support.
Below 2790.00 and things could get interesting to the downside, much like above 2900.00 to the upside. With price getting squeezed and conflicting comments becoming all too regular, it might well be worth sitting on the side-lines before we get an indication of a break either way.
With the outcome of this market in the medium-term most likely to be decided by who will be the new conservative leader, I would be careful about holding a position for too long without de-risking where possible.
To the downside, 1.2600 is vital for the bulls to defend. We have a trend-line starting from 2017, last December’s low and this year’s low all around that area. If that doesn’t hold, this market could start to get ugly quite quickly and a move to test the low of 2017 isn’t off the cards soon.
On the flip side, if Cable was to extend to the upside, the trend-line from the low of the 11th March is important to contain price – so if that was to break, I would be looking towards 1.2850 as a first target which is also the Valentine’s Day low.
WTI Crude Oil Futures
The 0.382 Fibonacci and the trend-line starting on 16th November offered support last week for this market which was in free fall on Wednesday and Thursday. Below that area and I would keep a close eye on the 0.500 Fib Level as a target/area of support. If Oil was to recover, $60 and $60.70 would be significant hurdles but a push beyond that should also see a recovery in stocks.
Last Thursday we saw a strong recovery where the most traded currency pair had tested its multi-year low. This reaction from those lows was cut short on Friday as we re-tested the trend-line starting on 26th April. For any further push higher, this level would have to break and then the bulls may finally get excited. Each time it has looked like we are going to get a medium-term recovery, we see a strong push lower and following the EU Election results over the weekend – I favour another leg lower.
Have a great week,
Anthony Cheung – Head of Market Analysis
Sam North – Associate
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