E-Minis A Touch Higher Pre-Cash Open As Fedspeak Outweighs Geopolitical Worry

Firmer than expected headline/excluding food & energy PPI data briefly limited the pre-cash uptick in e-minis, before the digestion of a softer than expected excluding food, energy & trade Y/Y PPI print provided support. As we noted elsewhere, most of the increase in food & goods can largely be discounted from a core PCE/CPI perspective.

• That leaves e-minis 0.2-0.3% above settlement levels as we head towards the NY cash open.
• A moderation in hawkish rhetoric deployed by Fed Governor Bowman helped the pre-data bid, more than outweighing an uptick in tensions between Israel & Lebanon.
• Stock specific news includes Exxon Mobil acquiring Pioneer Natural Resources, with the former indicated ~3% lower pre-market and the latter indicated 1.6% firmer.
• Technically, a bear cycle in S&P 500 e-minis remains in play, despite Friday’s sharp corrective rally and the follow through this morning. The contract traded lower last Wednesday, confirming a resumption of the bear leg once again. This maintains the price sequence of lower lows and lower highs and signals scope for weakness towards 4,194.75, the May 24 low. Pivot resistance is 4,441.61, the 50-day EMA.