Euro Zone News

Minor Bounce for Indices forward of key PMI stories

Asian futures:

  • Australia’s ASX 200 index rose by 116.3 factors (1.74%) to shut at 6,789.6
  • Japan’s Nikkei 225 index rose by 597.66 factors (2.06%) to shut at 29,563.67
  • Hong Kong’s Heng Seng index has risen by 344.29 factors (1.19%) and at the moment trades at 29,324.5

FTSE 100:

  • UK’s FTSE 100 futures are at the moment up 60.5 factors (0.94%), the money market is at the moment estimated to open at 6,543.93

European futures:

  • Euro STOXX 50 futures are at the moment up 29 factors (0.8%), the money market is at the moment estimated to open at 36,65.44
  • Germany’s DAX futures are at the moment up 101 factors (0.73%), the money market is at the moment estimated to open at 13,887.29

Friday US shut:

  • Dow Jones fell -469.64 factors (-0.15%) to shut at 30,932.37
  • S&P 500 fell -18.19 factors (-0.475017%) to shut at 38,11.15
  • Nasdaq 100 rose 81.84 factors (0.63%) to shut at 12,909.443

Over the weekend, Biden’s stimulus package deal was handed by the Home and Johnson and Johnson’s vaccine was permitted by the FDA. PMI knowledge additionally improved in Australia and Japan which assist keep a constructive open after Wall Road suffered one other day of heavy losses on Friday. Traders hope the Asian PMI’s might be a form of issues to return later at the moment, as manufacturing PMI can be reported throughout Europe and North America.

Index futures throughout Europe have opened increased, the FTSE is up 1% and Nasdaq 100 futures recouped over 1% of Friday’s losses. On the sector stage, industrials and expertise led equities increased, with utilities and energies being the laggards however nonetheless up for the session.

AUD and NZD have been the strongest majors of the session and CHF and JPY have been the weakest. This positioned AUD/CHF because the strongest FX pair and attain its common true vary (ATR 10). General, volatility throughout FX pairs remained contained.

The ASX 200 rose 1.7% and all sectors aside from supplies posted good points. Actual property, info expertise and healthcare have been the strongest performers, rising 3.2%, 2.9% and a pair of.7% respectively. Nonetheless, value motion stays inside Friday’s massive bearish candle, and the month-to-month chart has now produced three bearish hammers, so draw back dangers stay.

February PMI knowledge kicked off in Asia

Australia’s manufacturing PMI stunned to the upside in February, increasing on the sooner fee of 58.8 versus 55.3 in January. Now at its highest stage since March 2018, six of the seven sub-indices expanded (solely metals contracted at -48.7), which counsel the restoration in manufacturing is advancing sooner than initially anticipated. Job adverts additionally accelerated 7.2% in February, regardless of Victoria and Western Australia getting into a 5-day lockdown and home costs rose at their fasts tempo in 17 years in February.

China’s manufacturing PMI knowledge expanded however at a slower fee of fifty.9, -0.6 factors beneath the 51.5 forecast. While softer abroad demand is a contributing issue, China’s Lunar New Yr must also be factored into the softer knowledge set.

South Korea’s exports rose 9.5% in February as anticipated, though imports elevated by 13.9% versus 12.3% anticipated.

RBA double bond purchases

The Reserve Financial institution of Australia (RBA) intervened within the bond market at the moment and doubled their buy of Commonwealth bonds, at $4 billion in contrast with $2 billion beforehand.

RBA maintain their financial coverage assembly tomorrow and are anticipated to carry charges on the file low of 0.1% and retain a affected person stance over coverage normalisation. We will likely be to listen to any commentary about their intervention at the moment to get a really feel whether or not it’s a one-off occasion or one thing we should get used to. The Australian 10-year has fallen to 1.65% and the 30-year right down to 2.61% after bonds yields moved decrease within the US on Friday.

Candle Scan

February has supplied some fascinating candlestick reversal patterns throughout indices and FX markets.

Indices:

  • Month-to-month bearish hammers on the S&P 500, Nasdaq 100, Euro STOXX 600, DAX, FTSE 100, ASX 200, Nikkei 225
  • Weekly bearish engulfing candles on the Grasp Seng, Nikkei 225, FTSE 100 (additionally a night star reversal)
  • Bearish hammer (and out of doors week) on the CAC
  • Day by day bearish engulfing on the ASX 200

Foreign exchange:

  • Month-to-month bearish hammers on AUD/USD, NZD/USD and a bullish hammer on USD/CAD
  • Month-to-month morning star reversal on USD/CHF
  • Bearish hammers on NZD/USD, EUR/USD, GBP/USD and a bearish exterior week on AUD/USD
  • Bullish exterior week on USD/CAD and DXY (US greenback index)

GBP/USD: Potential swing commerce brief

The weekly chart produced a bearish hammer after failing to carry above 1.4100. That it comes after rallying 25% from its March low and stalled beneath the 2018 excessive suggests cable might now enter a part of imply reversion.

The day by day chart noticed two heavy days of promoting after Wednesday’s bearish pinbar and Friday closed beneath a bullish trendline. After recouping a few of Friday’s losses at the moment, we are actually searching for a possible brief entry.

We are able to see on the hourly chart that value are correcting increased, though operating into potential resistance round 1.4000. The 50 and 200-hour eMA’s have converged at 1.4000 and a 50% retracement stage sits close to Friday’s excessive.

  • Our bias is bearish beneath 1.0435
  • Trades may search to fade into (brief) across the resistance cluster and initially goal Friday’s low and the lows round 1.3828/45
  • A break above Friday’s excessive / 50% retracement stage invalidates the brief bias.

Up Subsequent (Occasions in GMT)

You may view all of the scheduled occasions for at the moment utilizing our financial calendar, and preserve updated with the newest market information and evaluation right here.

  • German inflation rose to an 11-month excessive in January and expectations are for it to stay there in February.
  • Markit’s flash PMI knowledge for the UK, Switzerland, Germany, Euro Zone, Canada and the US are key knowledge factors at the moment. Nonetheless we even have the ISM manufacturing report back to mull over, so there’s actually the potential for pockets of volatility within the European and US classes.

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