STOXX 50 Extends Move Away From Cycle Highs, Although Consolidates Off Session Lows

A move away from session cheaps in oil futures and core global FI markets has allowed European equities to stabilise, with the bulk of the early shunt lower (derived from the move in e-minis & Asia-Pac benchmarks) consolidated, as the spill over from Fitch’s one-notch sovereign credit rating downgrade of the U.S. remains front and centre.

• The health care sector leads the decline, with EURO STOXX 50 futures and cash equivalent -55 points/1.3% on the day.
• The weakness in the health care sector has been derived from the wider risk-negative tone and a miss in Siemens Healthineers quarterly earnings figures.
• The move lower in futures breached the 50-day EMA although the mark has since been reclaimed), with bears needing to force a break of 4,331.00, the Jul 26 low and a key support, in order to generate more momentum re: the move away from cycle highs.