European Open: Futures point lower with a turbulent start to the week

Asian Indices:

• Australia's ASX 200 index fell by -87.7 points (-1.25%) and currently trades at 6,932.00
• Japan's Nikkei 225 index has fallen by -809.97 points (-2.91%) and currently trades at 27,014.33
• Hong Kong's Hang Seng index has fallen by -612.23 points (-2.81%) and currently trades at 21,193.95
• China's A50 Index has fallen by -303.71 points (-2.15%) and currently trades at 13,796.59

UK and Europe:

• UK's FTSE 100 futures are currently down -49.5 points (-0.68%), the cash market is currently estimated to open at 7,268.02
• Euro STOXX 50 futures are currently down -55 points (-1.53%), the cash market is currently estimated to open at 3,544.20
• Germany's DAX futures are currently down -209 points (-1.52%), the cash market is currently estimated to open at 13,552.83

US Futures:

• DJI futures are currently down -339 points (-1.08%)
• S&P 500 futures are currently down -239.75 points (-2.02%)
• Nasdaq 100 futures are currently down -57.75 points (-1.48%)

The FTSE 100 suffered its worst day in a month on Friday as raging inflation weighed heavily on equity markets. The DAX had its worst day in three months and closed at the low of the day, and equity index futures across Asia, Europe and the US are all in the red.

French President Emmanuel Macron is not cruising towards the easy majority in parliament he expected. Initial estimates show hard-left leader Jean Luc slightly ahead with 26.2% compared with Macron’s 25.8% as raging inflation negatively impacting Macron’s re-election campaign.

The US dollar’s dominance continued to direct currency trends overnight, with the greenback rising against all other FX majors. USD/JPY broke above 135 for the first time since February 2002 and EUR/USD trades below 1.0500. The Australian dollar managed to find support at 0.7000 and recoup around half of the day’s losses. The US dollar index (DXY) reached a 1-month high.

A slew of UK data is scheduled for 07:00 BST, although it is unlikely to take centre stage. Markets are still reeling from Friday’s hot US inflation print and firm expectations that the BOE (Bank of England) will hike rates on Thursday.

Gold daily chart:

A bullish outside candle formed on the daily chart of Gold on Friday, and prices closed at the top of its range. The lower wick of the candle respected the bullish trendline as support and shows there was strong demand around $1830. We think this is an important swing low and have now switched to a bullish bias. Our next bullish targets are the resistance zones around $1900 and $1920. Prices have retraced to $1860 and we’re keen to explore bullish setups above the monthly pivot point (black line). Note that $1850, the 200-day eMA and 20-day eMA are in close proximity within that zone so we suspect there’ll be some support ahead of its next leg higher.

Economic events up next (Times in BST)