Global Matters & Earnings Provide Fresh Upward Impetus For Europe

Global impulses support VG1 futures, with fresh highs for S&P 500 e-minis and the previously identified RRR cut in China stealing the headlines (China-specific stock-supportive measures also feature).

• Post-European PMI tailwinds from lower European bond yields were also noted.
• That leaves the contract +1.3% on the day, while the cash equivalent is +1.4%.
• Technically, Euro Stoxx 50 futures have recovered from last week’s low (4,402.00) and the contract is extending on those recent gains. Initial resistance at the Jan 11 high (to watch is 4,536.00) has been broken, resuming the primary technical uptrend.
• The next resistance zone comes in at the Jan 2/ Dec 14 highs (4,599.00/4,634.00), with the latter representing the bull trigger.
• Looking more granularly, ASML & SAP surge post-earnings (restructuring news for the later also factored in), providing bottom-up support.
• Siemens also benefitted from earnings news.
• Alstom’s generally better than expected metrics were outweighed by news that the company is still considering some form of equity dilution, with the name lower on the day.
• All major sectors trade higher, with IT outperforming on the back of the ASML & SAP matters.
• Note that BBG reports flagged that Qube Research & Technologies Ltd. has “amassed a short bet of more than $1 billion against German companies amid a downturn in global demand that’s slowing Europe’s biggest economy.”