The FP Markets research team produce First Light News during the early hours of the European session, ensuring traders and investors have the news needed to begin their day.

Good morning.

It was a positive close across European and US cash equity indices on Wednesday. S&P 500 sector performance saw defensive stocks take a back seat while cyclicals outperformed, led by a rally in tech (+2.1%) and consumer discretionary (+1.9%). The Dow gained 323 points (+1.0%) to 32,717, the S&P 500 added 56 points (+1.4%) to 4,027, the Nasdaq 100 jumped 235 points (+1.9%) to 12,846, and the Russell 2000 climbed 18 points (+1.0%) to 1.771. It should not surprise that we were also green across the board for FAANG stocks, snapping a two-day losing streak. Meta Platforms (META), Amazon (AMZN), Apple (APPL), Netflix (NFLX) and Alphabet (GOOGL) gained 2.3%, 3.1%, 2.0%, 2.6% and 0.5%, respectively.

It was a mixed day for US government Treasury yields; shorter-dated rates moderately gained, and longer-dated rates pulled back and snapped the recent two-day winning streak. The benchmark 10-year US Treasury yield remains above its 200-day simple moving average, testing 3.568%.

In terms of economic data, housing surprised to the upside yesterday. According to the National Association of Realtors, US pending home sales rose for a third month, up 0.8% in February (vs -2.9% expected).

‘After nearly a year, the housing sector’s contraction is coming to an end’, said NAR Chief Economist Lawrence Yun. ‘Existing-home sales, pending contracts and new-home construction pending contracts have turned the corner and climbed for the past three months’.

Markets Today

Asia Pac indices ended the session mixed in overnight trading. China’s Shanghai Composite took a small hit, down around 0.2%, amid fears of decreased economic growth. Japan’s Nikkei 225 and Hong Kong’s Hang Seng also fared poorly, down 0.8% and 0.7%, respectively. Australia’s ASX 200 outperformed, adding nearly 1.0% on the back of expectations that the Reserve Bank of Australia (RBA) is closing in on pausing rate hikes. In fact, current market expectations (85.0% probability) call for a hold at the next meeting on 4 April.

ASX 200 Sector Performance:

(Chart: TradingView)

In other markets, European equity index futures are mixed this morning ahead of the cash open, with a similar picture seen in US equity index futures. In FX, we see subdued price action ahead of the London open. The US Dollar Index is flat, though it remains comfortably south of its 50-day simple moving average at 103.48; we also see a mild downtick in USD/JPY (-0.2%). In the commodities space, spot gold (XAU/USD) and spot silver (XAG/USD) are mixed; WTI oil, although also flat at the time of writing, is testing a particularly interesting area of technical resistance (see today’s Chart of the Day).

Across the crypto market, BTC/USD continues to gnaw at major weekly resistance from $28,844; ETH/USD is currently carving out a consolidation between $1,845 and $1,718 (many may refer to this as a potential bull flag [for the technically minded]), and XRP/USD snapped a five-day winning streak, shedding 2.3% after touching gloves with highs of $0.58479.

Headline Events for the Day Ahead:

Year-Over-Year German (Preliminary) CPI for March at 1:00 pm GMT+1 (Expected: 7.3%; Previous: 8.7%).

US Initial Jobless Claims for the Week Ending 25 March at 1:30 pm GMT+1 (Expected: 196,000; Previous: 191,000).

Chart of the Day

Price action on the daily chart of WTI oil is crossing swords with a notable area of technical resistance around the $74.00 neighbourhood—made up of a 20-period SMA (inner band of the Bollinger Band’s structure), an ascending support-turned resistance taken from the low $70.24, a 100% projection (AB=CD construction), a 61.8% Fibonacci retracement and a horizontal resistance level denoting the upper boundary at around $75.31.

(Chart: TradingView)

Major Currency Markets as of around 7:00 am GMT+1:

(Trading View)

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