European Open: WTI finds demand around $117, futures mixed

Asian Indices:

Australia's ASX 200 index rose by 28.6 points (0.4%) and currently trades at 7,124.30
Japan's Nikkei 225 index has risen by 236.36 points (0.85%) and currently trades at 28,180.31
Hong Kong's Hang Seng index has risen by 355.75 points (1.65%) and currently trades at 21,887.42
China's A50 Index has risen by 1.17 points (0.01%) and currently trades at 13,837.88

UK and Europe:

UK's FTSE 100 futures are currently up 20 points (0.26%), the cash market is currently estimated to open at 7,618.93
Euro STOXX 50 futures are currently up 18 points (0.47%), the cash market is currently estimated to open at 3,824.74
Germany's DAX futures are currently up 54 points (0.37%), the cash market is currently estimated to open at 14,610.62

US Futures:

DJI futures are currently down -66 points (-0.2%)
S&P 500 futures are currently down -50.25 points (-0.4%)
Nasdaq 100 futures are currently down -12.25 points (-0.29%)

FTSE 350: 4232.51 (-0.12%) 07 June 2022

91 (26.00%) stocks advanced and 242 (69.14%) declined
8 stocks rose to a new 52-week high, 5 fell to new lows
30% of stocks closed above their 200-day average
77.43% of stocks closed above their 50-day average
24.86% of stocks closed above their 20-day average

Outperformers:

+9.43% - Biffa PLC (BIFF.L)
+3.96% - Mitie Group PLC (MTO.L)
+3.05% - Melrose Industries PLC (MRON.L)

Underperformers:

-15.04% - National Express Group PLC (NEX.L)
-8.64% - Ferrexpo PLC (FXPO.L)
-5.62% - Future PLC (FUTR.L)

Asian shares were mixed overnight as investors absorbed the attest round of 50-bps hike from a central bank. That we have an ECB meeting and US inflation report over the next 48-hours simply adds confusion to the mix. On that note, we’ve observed that the S&P 500 (and Wall Street in general) has experienced a highly volatile period of indecision.

If you think back to all of the market moving headlines these past few months, it is quite intriguing that the S&P 500 futures contracts is effectively flat since February’s close. Over that time we have seen the market rally close to 13%, fall over 17% yet return back to the February close price and hug the 20-month eMA. That is indecision at its finest. And frustratingly, we may find the market hesitant to deviate too far from current levels until we get the data from Friday’s US inflation report. So if you must trade it, perhaps it’s best not to marry any positions and keep expectations for a sustainable move to the minimum.

Japan’s GDP upwardly revised (from bad to not good)

On the data front, growth in Japan was not as bad as originally feared. Q1 GDP contracted -0.5% y/y compared with the -1% originally estimated, or -0.1% q/q compared to -0.2%. It’s not likely to change anything for the BOJ policy wise, as Q2 data so far remains subpar and the BOJ are seemingly happy with a weaker yen. And that’s a good job because its once again the yen is weaker against all its major FX peers, with USD/JPY back above 133 and AUD/JPY briefly hitting a 7-year high.

Everything you should know about the Japanese yen

WTI finds demand at $117

I think we can now rule out the bull flag identified in yesterday’s report, given the volatility seen at the end of the session. But the inverted head and shoulders pattern remains in play (even if its neckline was breached). The false break of 117.87 left a lower spike / false break of support and momentum has turned higher. Prices are consolidating near yesterday’s high and around $120, but we like how demand appears to be around $117. Therefore, we’d consider longs with low volatility pullbacks above 118 and anticipated a break above 120, on route to the original $122 and $124 targets.

Economic events up next (Times in BST)

How to trade with City Index

You can easily trade with City Index by using these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.