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Asian equity markets experienced mixed trading on the back of positive momentum from Wall Street, where the S&P 500 achieved its highest close of the year and the Russell 2000 saw gains driven by regional banks. The VIX index dropped to its lowest level since early 2020, reaching a 14-handle. Several prominent large-cap companies, including Apple, Microsoft and Nvidia faced selling pressure, Nvidia, in particular, saw its shares decline for the third consecutive day after reaching all-time highs. Coinbase encountered a significant setback as it faced a lawsuit from the SEC, while Bitcoin managed a slight recovery following recent selling.

The Nikkei 225 initially made gains but later erased them in a significant swing, briefly dipping below the key 32k handle before finding some support. The Hang Seng rose, supported by reports of China's request for major banks to lower deposit rates to stimulate the economy, while the Shanghai Composite remained relatively flat. Price movements on the mainland were less conclusive, influenced by disappointing Chinese trade data, including a wider-than-expected contraction in dollar-denominated exports.

The data docket for today is relatively light, with no significant releases in the UK. In the Eurozone, the May Italian retail sales data will offer insights into consumer activity in one of the region's larger economies, but it is not expected to have a substantial impact on interest rate expectations. The main focus for European investors will be on ECB speakers, with several notable appearances. Vice President de Guindos is scheduled to speak at a conference, providing insights on relevant topics. ECB's Knot will present a briefing on financial sector stability to the Dutch parliament, sharing his expertise and analysis. Additionally, ECB's Panetta will participate in a panel discussion, offering valuable perspectives on relevant issues. The remarks and discussions from these ECB speakers are anticipated to garner attention and provide valuable insights into the central bank's stance and future policy direction.

Stateside, preliminary data on trade in goods indicates that the overall trade deficit likely widened significantly in April. The initial figures showed a 1.8% increase in goods imports for the month, while goods exports declined by 5.5%. These early indications suggest that international trade is unlikely to contribute significantly to GDP growth in the second quarter.
 

CFTC Data As Of 02-06-23

• USD IMM net spec short pared in May 24-30 reporting period; $IDX +0.51%
• EUR$ long -8,011 contracts to +165,725; EUR$ -0.35% in period
• $JPY +0.88% in period, specs +15,533 contracts now -96,193
• GBP$ -0.05% in period, specs +1,646 contracts now long 13,235
• $CAD +0.74%, specs sell into USD rise +18,612 contracts short cut to 29,914
• AUD$ largest loss in period -1.41%, specs buy 4,955 on dip now -44,126
• BTC +2.04% in period, specs -706 contracts now long 187 (Source: Reuters)
   

FX Options Expiries For 10am New York Cut 

(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)

• EUR/USD: 1.0615-25 (1.4BLN), 1.0645-50 (605M), 1.0680-90 (737M)
• 1.0730 (1.2BLN), 1.0745-50 (469M), 1.0795-00 (486M)
• USD/JPY: 139.00 (1.3BLN), 140.00 (1.1BLN)
• USD/CHF: 0.9025 (901M), 0.9040-50 (447M), 0.9100 (683M), 0.9130 (375M)
• EUR/CHF: 0.9700 (290M)
• GBP/USD: 1.2580-85 (290M). EUR/GBP: 0.8630-35 (250M)
• AUD/USD: 0.6620-30 (909M), 0.6650 (440M), 0.6690-0.6700 (1.6BLN)
• 0.6750 (460M). NZD/USD: 0.6200 (715M)
   

Overnight News of Note

• China Exports Drop More Than Expected, Adding To Economic Risks
• BoJ Policy Tweak Pressure Eases As JGB Market Liquidity Improves
• RBA’s Lowe: Too Early To Declare Victory In The Battle Against Inflation
• Goldman Boosts RBA Peak Rate Forecast To 4.85%, From 4.35%
• Morgan Stanley’s Australia Head Sees Just One More RBA Rate Hike
• Australia’s Economy Cools As Aggressive Rate Hikes Take Toll
• US Cash Pile Leaps By Most Since Tax Day After Debt-Limit Suspension
• Dollar Adrift As Traders Assess Fed Options; Aussie Buoyant
• Oil Extends Drop As Demand Concerns Overshadow Saudi Output Cut
• Rally In Hong Kong Stocks Bolsters Asian Equities
• EU Considers Mandatory Ban On Using Huawei To Build 5G

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4250

• Below 4240 opens 4190
• Primary support is 4160
• Primary objective is 4384
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

EURUSD Bias: Intraday Bullish Above Bearsih Below 1.0750

• Above 1.0765 opens 1.0840
• Primary resistance is 1.0840
• Primary objective is 1.0840
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

GBPUSD Bias: Intraday Bullish Above Bearish Below 1.2440

• Below 1.23 opens 1.2234
• Primary support  is 1.23
• Primary objective 1.2680
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

USDJPY Bias: Bullish Above Bearish Below 139.60

• Below 139.50 opens 138.90
• Primary support  is 137.40
• Primary objective is 141
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

AUDUSD Bias:Intraday Bullish Above Bearish Below .6580

• Below .6490 opens .6450
• Primary resistance  is .6680
• Primary objective is .6450
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

BTCUSD Bias: Intraday Bullish Above Bearish below 26000

• Below 26000 opens 25000
• Primary resistance  27500
• Primary objective is 25000
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

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