European Open: Asian Equities Track Wall Street Lower, Futures In The Red

The selling continued overnight with all major benchmarks across Asia in the red and the Japanese yen attracting safe-haven flows.

Charts (5)


Asian Indices:

  • Australia's ASX 200 index fell by -143 points (-1.94%) and currently trades at 7,225.90
  • Japan's Nikkei 225 index has fallen by -1010.85 points (-0.0349%) and currently trades at 27,952.65
  • Hong Kong's Hang Seng index has fallen by -387.85 points (-1.35%) and currently trades at 28,413.42

UK and Europe:

  • UK's FTSE 100 futures are currently down -50.5 points (-0.73%), the cash market is currently estimated to open at 6,966.97
  • Euro STOXX 50 futures are currently down -33 points (-0.81%), the cash market is currently estimated to open at 4,050.37
  • Germany's DAX futures are currently down -114 points (-0.74%), the cash market is currently estimated to open at 15,334.04

US Futures:

  • DJI futures are currently down -210.22 points (-0.62%)
  • S&P 500 futures are currently down -31.5 points (-0.22%)
  • Nasdaq 100 futures are currently down -21.25 points (-0.51%)


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The equity sell-off continues

Equities across Asia slumped overnight, taking their bearish lead from Wall Street on Friday following hawkish comments James Bullard. All major benchmarks were in the read led by Japan’s TOPIX which currently trades -2.5% lower, the ASX 200 fell -1.8% and the Hang Seng was down -1.3%. US and European futures have also opened lower which points to a weak open today.

The FTSE 100 endured its worst week in nearly four months and produced a bearish outside (and end engulfing) candle. The 50-day eMA came to the rescue to support prices by Friday’s close although the cash market is expected to open below 7,000 today. Today’s bias remains bearish beneath 7,000 with support levels residing around 6962, 6925 and 6900.


View today’s video: Gold’s Worst Week in 15-months, Equities Point Lower (PENN, DIS)


FTSE 350: Market Internals


FTSE 350: 4018.95 (-1.90%) 18 June 2021

  • 76 (21.65%) stocks advanced and 265 (75.50%) declined
  • 14 stocks rose to a new 52-week high, 7 fell to new lows
  • 83.76% of stocks closed above their 200-day average
  • 18.52% of stocks closed above their 20-day average


Outperformers:

  • + 4.55%   -  Chrysalis Investments Ltd  (CHRY.L) 
  • + 3.25%   -  Sirius Real Estate Ltd  (SRET.L) 
  • + 3.08%   -  Inchcape PLC  (INCH.L) 

Underperformers:

  • -5.67%   -  Melrose Industries PLC  (MRON.L) 
  • -5.32%   -  Restaurant Group PLC  (RTN.L) 
  • -5.07%   -  Energean PLC  (ENOG.L)  


JPY strongest major during risk-off trade overnight:

The Japanese yen continued to strengthen overnight and is currently the second strongest currency this month (just behind the US dollar). The yen was higher against all major currencies, including the mighty dollar, with USD/JPY currently -0.3% lower and probing Wednesday’s low. However, it remains above trend support from the April low, so perhaps it can build a base at or above 109.60.

The British pound was slightly lower overnight, currently down just -0.06% against the US dollar, although GBP/JPY fell -0.5% to a six-week low. GBP/CHF remains effectively rangebound between 1.2600 and 1.2800, so range-trading strategies are preferred until we see a breakout.


The US dollar index (DXY) traded in a narrow range, just off last week’s highs. DXY has rallied 3.2% since the May low, 2.2% of which was seen following Wednesday’s FOMC meeting last week, so bulls clearly have the upper hand. Yet prices have stalled near the 50-week eMA which may partially explain the pause in trend overnight, but with momentum as strong as it is right now that is not likely a good enough reason to be short the market. Besides, Friday found support at its 200-day eMA, so if we are lucky enough to see a low-volatility retracement within Friday’s range then bulls may want to seek dips above the 200-day eMA. Should prices hold above the 91.80 – 92.00 support zone our bias is for a break to new highs and target the gap resistance zone around 92.80.


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Metals cling on to last week’s lows

Gold prices remain a little shell-shocked after falling $100 last week. It has found support just above the 1756 low but upside momentum is currently lacking, to say the least. Still, volatility can cut both ways so if prices fail to push lower it may spur short covering and a technical bounce. Overall, our bias remains bearish beneath 1800 and for a break towards 1720 – 1720.

Silver remains equally unloved but holding above 25.70 support – a break of which opens-up a ruin for 25, although take note that the 200-day eMA sits at 25.33.

Bearish momentum on copper futures waned on Friday after breaking beneath trend support on Thursday. Form here we’d like to seek bearish setups below the broken trendline and for bears to target the lows around $4.00.


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.

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