Morning Impact: 4/3/24
Equity Indices, Treasuries, FX, Metals, Energy, Ags, Softs and Crypto Futures
🌍 World Equity Indices Cash and US Index Futures
Asia passed a difficult session on Tuesday night. All the majors closed softer, led by the Kospi (-1.68%), which slides into a correction, The Hang Seng (-1.22%) and Nikkei (-0.97%) both softened, but remain within consolidation ranges. China’s Shanghai Comp (-0.18%) intriguingly passed a tight session in comparison. In Europe, DAX (+0.15) attempts to stabilize following a rough, corrective session on Tuesday while the FTSE (—0.36%) struggles to find it’s footing. The sunrise calls were softer, with losses picking up into the NY open.
For now, weakness we’re witnessing in the mini DJI is a correction off last week's highs. We anticipate an area of support due to this being a region that has seen two months of congestion. Market participants who missed the previous upward movement are expected to step-up, although there is no certainty. The Mini S&P also works thru it’s own correction, moving towards areas similar but different areas of support within the uptrend. The Mini Nasdaq, while weaker overnight, has not fully entered a correction due to its ongoing sideways range, indicating a balanced but cautious market sentiment. Remember, the mini Nasdaq has been the complex leader for over a year; some lag at this point in a lengthy trend is not surprising; and may even be healthy for a continuation of the trend. But we’ll see. The mini Russell remained steady overnight, despite previous sessions' struggles, suggesting a key area for the index to maintain its upward trend is at current levels.
💰 Treasury Futures
The complex is a touch softer overnight, with recent action suggesting a continuation of the downtrends out of the December highs. There is momentum divergence across the curve, which raises questions about the current market positioning and the potential for a reversal if the 30-year Bond price can surpass the 118-00 and then 120-00 levels. The 10-year Note experienced a significant movement, breaking through its March low, which signals a continuation of the downtrend from December's highs. The 5-year note is intriguing, as it showed an overnight divergence from the 10-year and 30-year trends by not trading through its mid-March low and instead settling above it. But this morning’s lows signal downtrend continuation. The 2-year note settled below its March low, indicating a continuation of weakness. However, it rejected lower levels Tuesday and showed resilience against falling further. Let’s see how this session, which this morning already see’s fresh lows plays out.
💵 Cash Currencies
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