E-Minis Outperform European Counterparts Early Today

U.S. equity futures have been a little more resilient than their European benchmark counterpart, although it is worth remembering that some of the weakness in the latter is a result of the feed through from Friday pre-settlement weakness in the former. S&P 500 e-mini futures are 0.1% lower on the day last, with early Asia-Pac lows still intact.

• We also flag the greater implied sensitivity of European equities to China in light of the softer than expected Chinese Y/Y GDP readings (with European luxury goods names struggling this morning) and cross-market outperformance of the front end of the U.S. Tsy curve, while there is also some focus on this week’s U.S. earnings schedule.
• Technically, a bull theme in S&P 500 e-minis remains intact. Last week’s rally resulted in a break of resistance at 4,498.00, the Jun 30 high. The break confirms a resumption of the uptrend and maintains a bullish price sequence of higher highs and higher lows. The contract has also traded through 4,500.00 and this opens 4,576.62, a Fibonacci projection. First support lies at 4,439.81, the 20-day EMA. A breach of this level would highlight a short-term bearish threat.