China Negatives Weigh

Benchmark global equity index futures have pulled lower in recent trade, with the softer than expected Chinese credit and money supply data adding another headwind over the last few minutes.

• The soft lead from Chinese equities weighed early on Friday, while firmer than expected UK GDP hasn’t done much for the FTSE.
• STOXX 50 is 1.1% softer on the day, while e-mini S&P 500 futures are -8.
• Technically, bearish conditions in the S&P 500 e-mini remain intact and price is trading closer to its latest lows. Recent weakness resulted in a break of support at the 20-day EMA, following a failure at the top of the bull channel drawn from the Mar 13 low. This highlights a bearish development and the risk of an extension lower near-term. Further downside would open 4,461.63, the 50-day EMA. Resistance to watch is 4,560.75, the Aug 4 high.
• Similarly, a bearish threat in Euro STOXX 50 futures remains present following the reversal from 4,513.00, Jul 31 high. This week’s gains appear to be a correction. Tuesday’s move lower reinforced the current condition and the recent breach of the 20- and 50-day EMAs, strengthens a bearish threat. Furthermore, key support at 4,331.00, the Jul 26 low, has been cleared. This opens 4,220.00, the Jul 7 low. Initial firm resistance is 4,424.00, Aug 2 high.