Equities Continue To Rebound Amidst Ceasefire Hopes
Benchmark global equities indices are trading with a better tone this week as risk sentiment continues to rebound. Asset markets are continuing to recover off the initial lows posted in the wake of the news of the Russian invasion of Ukraine. With the conflict still raging, heavy downside risks remain. However, traders seem to be pricing in the likelihood of a ceasefire being agreed in the near term. Both sides have expressed optimism over ongoing peace talks though Russia has, as yet, refused Zelensky’s calls to meet with Putin personally. Zelensky has this week suggested there is room for compromise over refusal to join NATO, once of Russia’s ley demand. For now, risk markets look likely to continue to drift higher unless we see any heavily negative developments such as peace talks being abandoned or a sharp escalation in violence.
Away from geopolitical factors, markets have also been buoyed by the subdued reaction we’ve seen to recent rate hikes. With both USD and GBP failing to rally on last week’s policy announcements, asset markets continue to attract demand. Looking ahead this week, the data focus will be on UK and EU PMIs on Thursday followed by a slew of US data on Friday. We also have a raft of Fed speakers over the week to keep an eye on.
Technical Views
DAX
The rally off the 12462.59 level has seen the DAX trading back up into the upper half of the bearish channel from recent highs. While price holds above support at the 14170.79 level, and with both MACD and RSI bullish, the focus is on a continuation higher and a test of the channel top and 14791.27 resistance next. A break here will be firmly bullish for the index.
S&P 500
The recovery in the S&P has seen the market breaking out above the bear channel which has framed price action over the decline from YTD highs. Price is now testing the 4475.25 level and with both MACD and RSI bullish here, the focus is on a break higher and a test of the 4575.50 level next.
FTSE
The rally off the 6818.3 level has seen the market recovering ferociously with the index now fast approaching the 7558.7 level. With both MACD and RSI bullish here, the focus is on a continued push higher and a break of the 7558.7 level next, targeting 7691.6 and the channel top next.
NIKKEI
The rally off the 24619.3 level has seen the market breaking above the recent bear channel and moving back up into the upper part of the broader bear channel. Price is currently testing 27422.9 and, with both MACD and RSI bullish here, the focus is on a further push higher and a test of the channel top and 28356.6 next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.