Benchmark global equities indices have started the week in a mixed fashion. The main focus here continues to be on rising energy prices, supply-chain issues and inflationary concerns. With this in mind, the market is growing more expectant that we will see US tapering announced ahead of the end of the year. Indeed, these expectations remain firm despite another NFP miss in September. However, with inflation soaring and the backdrop of issues looking unlikely to be resolved in the near term, focus is shifting to the central banks.

The BOE is also tipped to move on rates, possibly as soon as the next meeting, according to two senior policymakers over the weekend. Sentiment at the bank has turned increasingly hawkish in the wake of the developing prices pressures in the UK with BOE governor Bailey himself saying the bank is prepared to move on rates this year if necessary. With the general tide among central banks shifting more to the hawkish side, as a result of rising cost pressures, the near-term outlook for equities markets appeared fraught with downside risks.

Technical Views

DAX

Following the sell off from 16015.97 highs, the DAX continues to grind lower within a corrective bear channel. Price is currently testing below the 15078.83 level, putting the focus on the 14791.27 lows once again. With both MACD and RSI bearish here, there are clear downside risks.

S&P500

The market continues to grind lower within the corrective bear channel which has framed the sell off from highs. For now, price is holding at the big 4295.75 lows. While this region holds, a rotation higher is still viable. Below there, however, focus turns to the 4236.50 level next.

FTSE

It’s been a frustrating few months for FTSE traders and the broad 6856.6 – 7241.0 range continues to hold firm here. Price is currently sitting atop the rising trend line, capped by the 7137 resistance for now. To the downside, 6968.7 is the next support to note.

NIKKEI

The bounce off the 26932.1 lows has seen the market trading back up to retest the bearish trend line at 28356.6 which is holding as resistance for now. With both MACD and RSI bearish here, there are risks of a continuation lower unless bulls can clear the current hurdle.