STOXX 50 Futures Recovery Targets Cycle Highs

The move away from session cheaps in core global FI markets has provided some support for the Euro STOXX 50, allowing the early Friday downtick in futures to unwind. The contract sits ~5 points higher on the day as a result, while the cash equivalent is ~0.2% better off on the day (registering its own fresh cycle high in the process).

• Elsewhere, a bid in Chinese equities, aided by news that Chinese policymakers have asked the country’s leading tech names to provide case studies of their most successful startups and suggestions that the country’s securities regulator had consulted securities firms re: potential measures to boost stocks, would have helped the space regain some poise.
• A rally in U.S. e-minis will also be helping, as will firmer than expected French GDP data and slightly softer than expected German HICP readings.
• The materials sector outperforms on the back of BASF earnings.
• Conversely, the health care sector finds itself at the foot of the performance table, struggling after Sanofi missed on Q2 revenues.
• Note that the morning dip in VG1 futures failed to get anywhere testing key support levels, with the recovery leaving futures a little below yesterday’s cycle high. A break there (4,481.00) would expose the 1.618 projection of the May 31-Jun 5-7 price swing (4,501.60).