European Open: Euro Moves Lower Ahead of ECB, Futures Point Higher

Euro pairs were softer overnight ahead of today’s highly anticipated ECB meeting, yet positive news on Sino-US trade relations boosted sentiment for equities.

Charts (1)

Asian Indices:

  • Australia's ASX 200 index rose by 35.9 points (0.49%) and currently trades at 7,306.10
  • Japan's Nikkei 225 index has risen by 96.86 points (0.31%) and currently trades at 28,831.27
  • Hong Kong's Hang Seng index has risen by 95.36 points (0.33%) and currently trades at 28,837.99

UK and Europe:

  • UK's FTSE 100 futures are currently up 16 points (0.23%), the cash market is currently estimated to open at 7,097.01
  • Euro STOXX 50 futures are currently up 4 points (0.1%), the cash market is currently estimated to open at 4,100.85
  • Germany's DAX futures are currently up 12 points (0.08%), the cash market is currently estimated to open at 15,593.14

US Futures:

  • DJI futures are currently down -152.66 points (-0.44%), the cash market is currently estimated to open at 34,294.48
  • S&P 500 futures are currently up 14.25 points (0.1%), the cash market is currently estimated to open at 4,233.80
  • Nasdaq 100 futures are currently up 5 points (0.12%), the cash market is currently estimated to open at 13,819.94


Learn how to trade indices


China – US trade relations show signs of thawing

Asian equities were firmer overnight with gain led by China as the US agrees to move forward with Beijing over trade. This is following the first call between the two nations since Biden took to office. China’s CSI300 is up 1.2% and SSEC currently trades around 0.9% higher. Futures markets also point to a positive open with FTSE futures up 0.2%, STOXX 50 up 0.1% and US futures up around the same amount.

Separately, the US and UK are planning to reopen travel between the two countries ASAP according to a statement released by the British Government yesterday. Biden arrived in the UK yesterday ahead of tomorrow’s G7 meeting.


The FTSE 100 closed with a bullish hammer, and its low perfectly respected its 20-day eMA. Whilst price action has been messy as of late, a series of lower wicks (or buying tails) suggests demand is slowly building in line with its bullish trend. Futures markets are pointing for a higher open and the FTSE to open just below 7100 (so right on the cusp of yesterday’s high). This may provide around 20 points of upside potential for day traders, although we’d like to see a break above 7120 to confirm a resumption of its (albeit messy) uptrend.


FTSE 350: Market Internals


FTSE 350: 7081.01 (-0.20%) 09 June 2021

  • 109 (30.97%) stocks advanced and 237 (67.33%) declined
  • 20 stocks rose to a new 52-week high, 1 fell to new lows
  • 86.36% of stocks closed above their 200-day average
  • 24.43% of stocks closed above their 20-day average

Outperformers:

  • + 5.92%   -  Restaurant Group PLC  (RTN.L) 
  • + 3.27%   -  International Consolidated Airlines Group SA  (ICAG.L) 
  • + 3.27%   -  Tui AG  (TUIT.L) 

Underperformers:

  • -9.62%   -  Thungela Resources Ltd  (TGAJ.J) 
  • -5.27%   -  Paragon Banking Group PLC  (PAGPA.L) 
  • -4.42%   -  Crest Nicholson Holdings PLC  (CRST.L) 


Forex trades in narrow ranges ahead of key calendar events:

AUD and NZD are currently the strongest majors thanks to improved relations between US and China. EUR and CHF are the weakest although ranges are narrow, as one typically expects during an overnight session ahead of a central bank meeting.

EUR/CHF has fallen to a three-month low after breaking below key support on Tuesday. It’s about mid-way to our initial 1.0877 target, yet prices have found support around its 200-day eMA.

USD/CNH fell to a six-day low overnight, but its low levels of volatility show it yet another market whose direction hinges around the US inflation report today. Our bias remains bearish below the 6.4120 high but a strong CPI report could see us step aside before reaching that level, should inflation come in strong.

USD/JPY is slightly lower yet remains near highs of yesterday’s range. With a double bottom having formed at 109.16, a stronger-than-expected inflation report could send the yen closer to 110.


Learn how to trade forex


Commodities:

China reiterated their aim to keep a tabs on rising commodity prices, sending copper and aluminium prices -0.3% and -0.5% lower respectively. Gold was also off by -0.3% overnight but holding around 1890, although gold traders are fully focussed on today’s inflation data.

Oil prices fell to a two-day low overnight as US inventory data suggested fuel demand was weaker-than-expected at the start of the summer. WTI futures fell -0.8% and just beneath yesterday’s low (a Rikshaw Man Doji candle) whilst brent is down just -0.12% from NY close.


Up Next (Times in BST)


You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.


More from Commodities

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.