Energy Weighs On European Benchmarks

The Euro Stoxx 50 index has lost over 1% on the day, with the futures equivalent running 52 points below settlement.

• VG1 futures move through initial support at 4,950, but the move is only short-lived and limited (basing at 4,947.0).
• A fresh move lower would expose next support at the 50.0% retracement of the Apr 19-May 16 bull cycle (4,936.0). That level protects the 61.8% retracement of the same move (4,894.9). A break there would present a greater bearish threat after the recent move below the 50-day EMA.
• The energy sector has provided the most weight for the Euro Stoxx 50 index, with fresh multi-month lows for the global crude oil benchmarks the root driver there.
• Consumer staples, healthcare and utilities see modest upticks on a sectoral basis, although upside there is very limited (2 of those sectors have some defensive properties to lean on during equity market sell offs).
• Elsewhere, the move lower in core global FI yields weighs on financials, although bonds have moved away from best levels of the day.
• More broadly, worry in the wake of yesterday’s U.S. economic activity data remains evident, providing a broader risk-off feel.