European Open: EUR/USD Higher Ahead of Trade Data and CB Speakers

Data is finally picking up this week, with German trade and economic sentiment kicking off ahead of several central bank speakers including Powell and Bailey.

Charts (5)

AUD/JPY and NZD/JPY are currently the weakest pairs

Asian Indices:

  • Australia's ASX 200 index fell by -5.4 points (-0.07%) and currently trades at 7,446.80
  • Japan's Nikkei 225 index has fallen by 174.7 points (-0.59%) and currently trades at 29,332.35
  • Hong Kong's Hang Seng index has fallen by -17.85 points (-0.07%) and currently trades at 24,745.92
  • China's A50 Index has fallen by -82.1 points (-0.53%) and currently trades at 15,496.31

 

UK and Europe:

  • UK's FTSE 100 futures are currently down -23 points (-0.32%), the cash market is currently estimated to open at 7,277.40
  • Euro STOXX 50 futures are currently down -18.5 points (-0.43%), the cash market is currently estimated to open at 4,334.03
  • Germany's DAX futures are currently down -49 points (-0.31%), the cash market is currently estimated to open at 15,997.52

 

US Futures:

  • DJI futures are currently up 104.27 points (0.29%)
  • S&P 500 futures are currently down -24 points (-0.15%)
  • Nasdaq 100 futures are currently down -11.5 points (-0.24%)

 

 

Indices

Despite a positive start, equity markets across Asian traded lower overnight as investors squared up positions ahead of this week’s first set of inflation data from the US. The ASX 200 was an underperformer following weak earnings from banks.

Japan’s equity markets were the weakest performers on the day, with the TOPIX down around -0.7% and the Nikkei around -0.5% lower. Traders were seemingly underwhelmed with the government of Japan’s announcement that it would provide around ¥100k (around US $870) per child under 18, although reports had surfaced of this scenario over the weekend.  

Futures markets are pointing to a lower open for European indices today.

 

FTSE 350: Market Internals

The Nasdaq and S&P 500 have outperformed the FTSE 100 and DAX over the past 3 months

FTSE 350: 4190.92 (-0.05%) 08 November 2021

  • 133 (37.89%) stocks advanced and 210 (59.83%) declined
  • 14 stocks rose to a new 52-week high, 3 fell to new lows
  • 64.1% of stocks closed above their 200-day average
  • 63.82% of stocks closed above their 50-day average
  • 21.08% of stocks closed above their 20-day average

 

Outperformers:

  • + 12.4%-Darktrace PLC(DARK.L)
  • + 7.06%-Investec PLC(INVP.L)
  • + 5.89%-TI Fluid Systems PLC(TIFS.L)

 

Underperformers:

  • -5.37%-Baltic Classifieds Group PLC(BCG.L)
  • -4.21%-Discoverie Group PLC(DSCV.L)
  • -3.91%-Sirius Real Estate Ltd(SRET.L)

 

 

Forex:

It’s a busy day for central bank speeches. The Fed’s Bullard kicks off at 12:50, Jerome Powell’s pre-recorded speech rolls from 14:00, BOE’s Governor Andrew Bailey speaks at 16:00, The Fed’s Daly at 16:35, BOC’s Beaudry speaks at 17:10 and the Governor himself at 22:45.

Then at 13:30 traders have US producer prices to look forward to, which in some ways could be seen as the warm-up act for Wednesday’s inflation report. Strong producer prices combined with weak data from Germany could see the dollar recoup some lost ground.

But first, German trade balance data is scheduled for 07:00 GMT. In October, exports contracted for the first month in 15 as bottlenecks in the supply chain continued to bite. They are expected to recover by 0.5% in October, up from -1.5% in September. Then at 10:00 the German ZEW economic report is released. It has fallen for five consecutive months and expected to slip for a 6th. A weak ZEW report with weaker exports could spell trouble for the euro today, whilst a (welcomed) upside surprise could help EUR/USD hold onto early gains.

EUR/USD has just broken out of a bull flag on the hourly chart

EUR/USD has broken out of a bull flag pattern ahead of today’s open. A bullish trend is forming on the hourly chart and holding above the 20 and 50-bar eMA’s. At the time of writing, the euro is trying to close above the monthly pivot. If it can perform a solid close then bulls need to break it above the 1.16 handle to continue its trend, in which case our bias would then be bullish above 1.1575 as we seek a run towards the 1.1616 high / weekly R1 pivot.

 

 

Commodities:

Silver’s rally has stalled just beneath the weekly R1 pivot and retraced, and currently show the potential for a bull flag breakout on the hourly chart.

Platinum futures are holding above trend support on the daily chart, with a swing low also resecting the 50 and 20-day eMA’s. We suspect it will eventually break higher (along with other metals) although inflation data and the US dollar’s reaction around this week’s inflation data will be key.

 

Up Next (Times in BST)

German trade data and the ZEW sentiment report kids of the European session today

 

How to trade with City Index

You can trade easily trade with City Index by using these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    Open an account in the UK
    Open an account in Australia
    Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

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.