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Equities Head Higher As Traders Return From Easter Break

Global equities benchmarks are starting the day with an air of cautious optimism, seeing most indices tracked here trading in the green across the European open on Tuesday. Traders returning from the long Easter weekend are seemingly buoyed, rather than concerned by last week's better-than-forecast US jobs report.

The headline NFP reading came in at 236k vs 228k expected while the unemployment rate was seen ticking back down to 3.5% from 3.6% prior. Average hourly earnings held unchanged at 0.3%. On the whole, the data was bullish and no doubt creates room for the Fed to press ahead with a further .25% hike in May. However, this week’s US CPI data (released tomorrow) will be seen as the key decider.

If inflation is seen cooling further last month, equities are likely to continue higher into the back end of the week as traders dial back their Fed rate-hike expectations. However, should inflation be seen rising unexpectedly last month, this will add to hawkish expectations leading to some giveback in equities markets.

Eurozone retail sales will also be on watch today. The reading is forecast to have fallen 0.8% last month, down from 0.3% the prior month, reflecting the negative impact of higher prices in the eurozone.
 

Technical Views

DAX

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The index is holding above the 15642.76 level for now and with momentum studies still bullish, while the market holds above here the focus is on a further push higher towards the 16278.35 level next. To the downside, should the index break back below current support, focus will turn to the 15163.41 level next. 

S&P 500

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The S&P is currently testing the 4153.50 level yet again. This marks the latest in a string of attempts to break the level and, with momentum studies bullish, should price breach the region, focus will turn to the 4305 level as the next resistance to note. To the downside, 3910 is the next key support to note.

FTSE

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The rally in the FTSE continues to gather pace today. The index has made strong gains off the 7337.6 lows and is now close to testing the 7834.7 level after breaking above the 7678.8 level. Should price continue to break higher, the YTD highs at 8023.5 will become the bigger target for bulls.

NIKKEI

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The recent turn lower in the index has seen strong support kicking in on a retest of the 27422.9 level. Price has since bounced and is holding above the level. While above that support, and with momentum studies bullish, focus is on a further push higher towards the 28356.6 level next.

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