Pre-Market Analysis and Chartbook: Risk Assets Under Pressure as Volatility Returns
Friday Market Snapshot
|Asset||Current Value||Daily Change|
|WTI Crude Oil||74,51||-0.16%|
Stocks have been choppy with a bearish bias today in European trading, with yesterday’s steep US selloff still affecting markets across the globe. All eyes are still on US treasury yields, which continue to push higher to new multi-year lows as the market awaits today’s government Employment Report. European economic releases were on the positive side today, with German Factory Orders, the PPI Index, and Italian Retail Sales all came in above the consensus estimates.
Dow 30 Futures, 4-Hour Chart Analysis
Despite the positive impulses and the after-hours bounce in the US, stocks are drifting lower in the low-volume environment and US stocks futures are near their session lows, with the Nasdaq leading the way lower yet again.
The Dow, on the other hand, has been relatively strong in the past few days, and it’s holding up well today in pre-market trading as well, as investors pile into the relatively safe mega-cap names.
VIX (US Volatility Index), 4-Hour Chart Analysis
The downward drift in the Volatility Index (VIX) ended yesterday with a bang, with the key risk measure shooting higher due to the heavy selling in the thin, pre-Jobs-Friday environment.
The VIX is testing the declining trendline and that makes today’s Employment Report even more important, as a full-blown correction in the US could push the already weak overseas markets to new lows. With China already in a bear market, and with the European benchmarks being around 10% below their highs, a bearish global trend could be established and the US bull could also be in danger.
Europe’s Bounce Fading Amid Funding Crisis
EuroStoxx50 Index CFD, 4-Hour Chart Analysis
The main European benchmarks are catching up with their US peers on the downside today, and the DAX and the EuroStoxx 50 are both already trading near their three-week lows, despite their recent stability and today’s positive economic reports.
British assets, especially the Pound is outperforming the rest of Europe, and the EUR/GBP pair hit its lowest level since mid-July amid the still lingering Italian budget troubles.
EUR/USD, 4-Hour Chart Analysis
The EUR/USD pair is back in the center of attention today, and we expect huge moves in the most traded forex pair, and the other majors after the release of the Employment Report. The weak rally attempts of this weak are pointing to massive selling pressure in the Euro, and barring a lower than expected US Hourly Earnings number, the short-term bearish trend is likely to continue and even the August lows near 1.13 could be in danger soon.
With emerging markets also getting hit yesterday, the Dollar index is also edging towards its August highs, and a break above those could unleash another wave of selling in global risk assets.
Major Stock Indices
S&P 500 Futures, 4-Hour Chart Analysis
Nasdaq 100 Futures, 4-Hour Chart Analysis
DAX 30 Index CFD, 4-Hour Chart Analysis
FTSE 100 Index CFD, 4-Hour Chart Analysis
Nikkei 225 Futures, 4-Hour Chart Analysis
Shanghai Composite Index CFD, 4-Hour Chart Analysis
EEM (Emerging Markets ETF), 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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