FTSE +15 points at 7450
DAX +45 points at 12815
CAC +9 points at 5414
Euro Stoxx +7 points at 3644
A massive global cyber-attack hit more than 200,000 computers in 150 countries since Friday and could get worse with employees returning to work on Monday. Businesses across all industries could be affected. The UK’s NHS (National Health Service) warned that many of 8,000 GP surgeries could be disrupted for the first time.
The risk sentiment is dull due to cyber uncertainties. The Bitcoin is exchanged below $1,800, as cyber-attack hackers claim their victims’ payments in bitcoins. The total value of the bitcoin market hit $50 billion, which raise questions on the sustainability of the growth in this perfectly deregulated market. Given the size of the recent attack and the widespread implications caused by the use of the decentralized, non-government controlled digital currency, the bitcoin could be the target for new measures and regulations. The bitcoin was worth $10 in 2012.
Gold consolidated gains between $1,227/$1,231 in Asia. Limited global risk appetite and softer US yields are supportive of a further recovery to $1,233 (minor 23.6% retracement on April – May sell-off), then to $1,245/1,247 (major 38.2% retrace / 200-day moving average). Intra-day support is eyed at $1,227 (100-day moving average).
Besides the cyber-attack, China’s Belt and Road initiative occupy the global headlines. China pledged to invest an additional 540 billion yuan ($78 billion) in infrastructure spending to boost growth in its peripheral provinces, to increase its global influence, to stabilize the yuan and to temper the capital outflows.
Hang Seng Index (+0.56%) and Shanghai's Composite (+0.28%) diverged positively at the start of the week, copper futures traded in the green for the third consecutive session. The weak Chinese data somewhat dented the appetite. The industrial production grew by 6.5% on year to April, slower than 7.0% expected by analysts and down from 7.6% printed a month earlier. Still, the Belt and Road project keeps investors away from overthinking the Chinese slowdown story.
Firmer commodity prices were supportive of the Aussie in the early trading hours. The AUD/USD is set for a renewed test of 0.7427 (minor 23.6% retrace on March – May drop). Yet, the death cross formation (50-day moving average crosses below the 200-day moving average) on the daily chart could weigh on the positive momentum. The key resistance is eyed at 0.7488/0.7500 (major 38.2% retrace / psychological resistance).
In Japan, the sentiment was bitter as the cyber-attack certainly prevented the safe haven yen from depreciating against the US dollar. Nikkei (-0.24%) and Topix (-0.28%) remained on the back foot as the yen traded below 113.50 against the US dollar. The USD/JPY buyers are touted pre-112.90/112.33 (minor 23.6% retracement on April – May recovery / 100-day moving average). The key support to the positive momentum stands at 112.00 (major 38.2% retracement). The natural target for the USD/JPY bulls is the 115.00 mark. Decent option calls at/above 114.00 are due for expiry throughout this week.
The weaker appetite in the US dollar pulled the DXY index below its 200-day moving average (99.31).
The EUR/USD consolidated gains above the 1.0920 in Asia, boosted by news that German Chancellor Angela Merkel’s CDU defeated its rivals in one of the most populist states of the country. The pair could benefit from a renewed positive wave toward 1.1020 (post-Macron high), after having successfully held the ground near the 38.2% retracement on April – May advance, 1.0849, last week. The key mid-term resistance is eyed at 1.1074 (minor 23.6% retrace on post-Trump sell-off).
Across the Channel, the snap election talks are in focus. The GBP/USD closed the week below 1.2900 after the Bank of England (BoE) disappointed the hawks at last week’s monetary policy meeting. The failure to fight back the 1.3000 offers could encourage a deeper downside correction in cable. The key supports to the actual positive trend stand at 1.2278 (minor 23.6% retracement on March – May rise) and 1.2650 (major 38.2% retrace).
Softer pound should encourage the FTSE 100 to renew record. The FTSE 100 traded at 7435p on Friday and is set for an open nearby the 7447p level, the all-time high reached on March 17th. Improved commodity prices and firmer oil (+1.67%) hint at a trading session through uncharted territories in London at the start of the week.
Saudi Arabia and Russia said to be in favour of extending production cuts on May 25 meeting. WTI advanced to $48.70.
Quick glance at technicals on LCG Trader:
USD/CAD intraday: Short positions below 1.3700 (pivot) with targets at 1.3645 & 1.3625 in extension. Above 1.3700, upside potential to 1.3720 & 1.3745.
NASDAQ 100 intraday: Long positions above 5670.00 (pivot) with targets at 5700.00 & 5710.00 in extension. Below 5670.00, downside potential to 5656.00 & 5650.00.
Copper (CME) (N7) intraday: Long positions above 2.5180 (pivot) with targets at 2.5440 & 2.5530 in extension. Below 2.5180, downside potential to 2.5120 & 2.5050.