Pre-Market Analysis And Chartbook: Markets Choppy Before ECB
Thursday Market Snapshot
|Asset||Current Value||Daily Change|
|WTI Crude Oil||67.20||1.22%|
It has been a mixed day, so far, for global equities as after yesterday’s rout on Wall Street, Asian stocks fared relatively well and European markets also avoided another wave of selling. That said, the charts remain deeply wounded across the globe, and although in particular Europe is deeply oversold before the European Central Bank’s meeting, even after a major bounce, the bearish trends would remain intact.
Shanghai Composite Index CFD, 4-Hour Chart Analysis
Chinese stocks showed relative strength today, with the Shanghai Composite closing in the green after a hectic session. The fact that yesterday’s panic didn’t spread to the weakest market from a broader perspective could be the sign of short-term selling exhaustion, so a stronger bounce is possible in risk assets in the coming days.
DAX 30 Index CFD, 4-Hour Chart Analysis
The ECB is currently holding its monetary meeting, and in the light of the recent troubles concerning the Italian budget, the slowing global growth, and the lackluster performance of the European financial sector, some analysts are hoping for a dovish shift in the rhetoric of the central bank.
There were already hints on a Twist-like operation by the ECB, which would mean the reinvestment of the current holdings, while a direct extension of the asset purchase program seems unlikely. The Euro has been weakening in recent weeks, and at this pint even an unchanged guidance could cause a rally in the common currency.
The uncertainty surrounding the meeting is higher than usual, given the mixed economic catalysts and the European Union’s strong arming with Italy, which could lead to a hawkish bias.
US Earnings Continue to Impress but Sentiment Remains Gloomy
S&P 500 Futures, 4-Hour Chart Analysis
US stocks futures rebounded off their late-day lows, with the help of the better-than-expected earnings releases by Microsoft (MSFT), Visa (V), Tesla (TSLA), and Twitter (TWTR), but the major indices only recovered a small part of yesterday’s steep losses. Today’s busy session, with regards to earnings and economic releases could cause a tumultuous Wall Street session again, especially following the ECB’s meeting.
Treasury yields are up in early trading after two days of declines across the curve and we expect volatile trading to continue in bonds following the ECB announcements, and the, so far, choppy currencies will likely also see a surge in activity. Day traders should be aware of the possible spikes and temporarily illiquid market conditions even in the major pairs.
EEM (Emerging Markets ETF), 4-Hour Chart Analysis
On a negative note, emerging market equities continue to struggle, even as the most vulnerable currencies are still stable. The EEM ETF fell to another bear market low, and despite today’s strength in China, the segment failed to show strength in pre-market trading.
All in all, there is little for bulls to cheer about, and even as violent counter-trend rallies are expected, most of the global markets are rolling over or are already in bearish trends, so we continue to be defensive towards equities from a broader perspective.
Major Stock Indices
Nasdaq 100 Futures, 4-Hour Chart Analysis
Dow 30 Futures, 4-Hour Chart Analysis
VIX (US Volatility Index), 4-Hour Chart Analysis
FTSE 100 Index CFD, 4-Hour Chart Analysis
EuroStoxx50 Index CFD, 4-Hour Chart Analysis
Nikkei 225 Futures, 4-Hour Chart Analysis
EUR/USD, 4-Hour Chart Analysis
USD/JPY, 4-Hour Chart Analysis
GBP/USD, 4-Hour Chart Analysis
EUR/GBP, 4-Hour Chart Analysis
AUD/USD, 4-Hour Chart Analysis
WTI Crude Oil, 4-Hour Chart Analysis
Gold Futures, 4-Hour Chart Analysis
Copper Futures, 4-Hour Chart Analysis
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