Following the declines of recent weeks, and the initial selling yesterday, equities bulls will be relieved to note a change in tone this week. We’ve seen a broad improvement in risk sentiment over recent session, linked mainly to reports that China will end the current Shanghai lockdown as of June 1st. The lockdown, which has run for around 6 weeks and seen tens of millions of people confined to their homes, has wreaked havoc on the Chinese economy. Recent data prints have highlighted the impact of the restrictions, fuelling fears of a broader slowdown in the world’s second largest economy. However, with restrictions to be scaled back from June 1st, investors are now focused on the post-lockdown recovery and a surge in demand, which is helping lift stocks on Tuesday.

Looking ahead today, US retail sales data will be on watch. With inflation surging, interest rates lifting and covid disruptions still abounding, the market is looking for retail activity to have declined last month. This would confirm the dismal consumer sentiment reading issued last week. Fed chairman Powell speaks later today and on the back of last week’s comments, markets will be looking for any further details regarding the Fed’s outlook and assessment as we approach the June FOMC next month.

Technical Views


Following the rebound off the 13672.31 level, the DAX is now testing the upper limit of the bear channel from recent highs, along with the 14170.79 resistance. With both MACD and RSI turned higher here, the focus is on a breakout above said levels and a continuation towards the 14791.27 level next.

S&P 500

The S&P is rebounding today off the bear channel low, finding support between 3845.25 and 3961.50. While both MACD and RSI remain negative, flagging risks of a further move lower, there is room for a fuller recovery towards 4221.25 if bulls can get back above 4062.25 today.


The reversal from the recent test below the bull channel has seen the FTSE rebounding strongly over recent days. Price has soared off the 7241 level support and is now sitting mid channel, approaching 7558.7 resistance next. With both MACD and RSI turning bullish, the focus is on a continuation higher towards 7691.6 if we take out local resistance.


Recent choppy action continues in the Nikkei with price now once again trading in the middle of the 26246 – 27422.9 range. The larger market action remains framed by the falling wedge pattern which suggests an eventual breakout higher in the medium term, putting focus on a break of the upper limit of the range and a test of the wedge top ahead of 28356.6 above.