Summary: US equities plunged to new cycle lows on Friday, but quickly found support at a major technical level and rallied back toward unchanged on the day, with some brightening in sentiment to start this week as well, though a rise in Covid cases in Beijing is driving fears of new lockdowns there. The focus this week is on whether sentiment can stabilize and whether the USD rally is done for now as the sell-off last week has extended into the start of this week. Gold has enjoyed the combination of a weaker USD and lower yields.


What is our trading focus?

Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - another choppy US equity session on Friday with Nasdaq 100 futures pushing to new lows for the cycle hitting 11,491 before bouncing back to close at 11,840 the weakest close since the current drawdown cycle started. This morning Nasdaq 100 futures are trading just above the 12,000 level, but the backdrop is still negative with US economic data weakening and inflationary pressures continuing to impact households. The resistance level to watch today in Nasdaq 100 futures is 12,096 and the key support level is 11,840. April Chicago Fed National Activity Index out today expected to remain significantly above trend growth, but a negative surprise could be in store given latest negative economic surprises.

Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) - retraced 1.7% and 0.8% respectively, as newly reported COVID cases surged, the Beijing municipal government tells residents in five districts, including the central business district Chaoyang and the IT hub Haidian to work from home through May 28. More Chinese cities relaxed mortgage lending with banks in Beijing lowering the mortgage rate for first-time buyer by 15 bps to 5% and Changzhou cuts down payment ratio for second-home purchases.

Stoxx 50 (EU50.I) - Stoxx 50 futures were less impacted by the late session selloff on Friday in US equities and are responding positively this morning surging to 3,700 with the 50-day moving average at 3,728 being the key level to watch on the upside. IFO survey figures for May is out this morning in Europe expected to decline again m/m and could reverse the current positive momentum should the survey show a bigger negative surprise.
https://www.fxmag.com/forex/financial-markets-today-quick-take-may-...