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Themes Extend Following London Close, With Banks Leading Equities Lower

CROSS ASSET
  • Price action present throughout the European trading day is persisting here after the London close, with fresh highs being printed in the USD Index (largely due to EUR/USD's decline today - with the single currency the weakest in G10 outside of Scandi FX). The move coincides with further gains for the US 10y yield, which is through the earlier session highs and prints 1.86% for the first time since the beginning of the pandemic.
  • The risk-off theme is consistent through the sectoral breakdown, with financials sliding sharply (led by Goldman Sachs, off 7.7% on poor earnings) alongside tech and consumer discretionary names.
  • This has put the e-mini S&P briefly below the 100-dma of 4570.6, seen as a level of key support for stocks (held price action well through multiple dips in December) and a confirmed break would open 4520.25 and 4492.00. The index is now around 5% off the alltime highs posted on Jan4th.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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