European Open: Sentiment Improves with Biden – Jinping Call
Matt Simpson September 10, 2021 12:47 AM
Baby steps perhaps, but a simple phone call can make all the difference for markets as well, as equities rose overnight on hopes Sino-US tensions were easing.
- Australia's ASX 200 index rose by 40 points (0.54%) and currently trades at 7,409.50
- Japan's Nikkei 225 index has risen by 336.17 points (1.12%) and currently trades at 30,344.36
- Hong Kong's Hang Seng index has risen by 423.24 points (1.65%) and currently trades at 26,139.24
UK and Europe:
- UK's FTSE 100 futures are currently up 8.5 points (0.12%), the cash market is currently estimated to open at 7,032.71
- Euro STOXX 50 futures are currently up 5.5 points (0.13%), the cash market is currently estimated to open at 4,182.61
- Germany's DAX futures are currently up 8 points (0.05%), the cash market is currently estimated to open at 15,631.15
- DJI futures are currently down -151.69 points (-0.43%)
- S&P 500 futures are currently up 24 points (0.15%)
- Nasdaq 100 futures are currently up 8.25 points (0.18%)
View today’s video: Moderna (MRNA) Gets a Boost from Flu + COVID Combo Shot
Indices rise to the occasion (but no cake)
Asian equities were higher overnight, helped in part by positive earnings and on reports that Joe Biden had a phone call with Xi Jinping, which suggests US-Sino tensions were abating. Over the 90-minute call, the two powers had a “broad, strategic discussion” including how to avoid competition veering into conflict. Nice. So, we’re not quite at the ‘the most beautiful piece of chocolate cake’ stage of the relationship, but it is a step in the right direction.
The Hang Seng was a top performer, rising around 2% and the China A50 index rose 1.4%. Japan’s share markets extended their rallies to see the TOPIX hit its highest level since 1990 and the Nikkei tough a fresh 6-month high. The ASX 200 recovered from yesterday’s lows yet found resistance just under the resistance zone around 7430-50 highlighted in today’s Asian Open report.
Bears wasted no time in driving the FTSE 100 down to our 7,000 target yesterday, with the first hour of trade accounting for most of the daily range. In isolation, the bearish flag on the hourly chart looks quite appealing for bearish eyes. Yet in context of improved global sentiment for equities, and the fact that 7,000 is a psychological round number near the weekly S3 pivot, it’s plausible to expect a countertrend bounce today. 7060 and 7090 make viable bullish targets. Further out, a break beneath 6993 could mark its next leg lower.
FTSE 350: Market Internals
FTSE 350: 4068.81 (-1.01%) 09 September 2021
- 129 (36.75%) stocks advanced and 211 (60.11%) declined
- 5 stocks rose to a new 52-week high, 10 fell to new lows
- 71.23% of stocks closed above their 200-day average
- 64.67% of stocks closed above their 50-day average
- 17.38% of stocks closed above their 20-day average
- + 5.58% - IP Group PLC (IPO.L)
- + 3.94% - Grainger PLC (GRI.L)
- + 2.56% - Helios Towers PLC (HTWS.L)
- -10.2% - Easyjet PLC (EZJ.L)
- -7.63% - Genus PLC (GNS.L)
- -4.80% - Cineworld Group PLC (CINE.L)
Forex: UK GDP, CA employment and US PPI on tap
Commodity currencies were the leaders overnight, with AUD rising 0.3%, NZD up 0.23% and CAD 0.16% for the session. The yen and USD were the weakest currencies during the mildly risk-off session.
NZD/JPY is the strongest pair and is showing the potential bull flag on the daily chart. We just need the markets to get ahead of themselves with the Biden-Jinping phone call and nothing else to go wrong.
UK GDP is then released at 16:00. Whilst the economy has been picking up it remains behind where is was prior to the pandemic. Yet hawkish comments from BOE Governor Bailey have teased expectations of a rate hike, so a strong print today could serve bullish setups well for GBP pairs.
Later in the US session, Canadian employment is released and, for one, won’t be overshadowed by NFP. As we think BOC may still be close to tapering (despite the setback in Q2 GDP), a strong employment report could have the Canadian dollar regain some strength ahead of the weekend.
At the same time of 13:30 BST, US producer prices are released. And a strong print could be of interest for USD bulls as it can be seen as a proxy for next week’s CPI data.
Learn how to trade forex
Commodities show the potential to perk up:
Copper futures broke above daily trend resistance on news of the Biden-Xi Jinping phone call. The next target remains to be 4.435 as long as prices remain above 4.20 and its possible that an inverted head and shoulders pattern is forming on the daily chart.
The CRB commodity basked is trading just below its 4-year high, with a break above 221.25 confirming trend resumption whilst a break below 216.85 assumes a countertrend move.
Up Next (Times in BST)
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the pair you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.