The IndeX Files 25-04-2023

Equities Softer Amidst Hawkish Central Bank ExpectationsGlobal equities benchmarks have seen a mixed start to the week with most indices trading a little in the red across the European open on Tuesday. On the back of the upside momentum we’ve seen across asset markets in recent weeks, stocks have lost a little steam recently amidst a fresh uptick in Fed tightening expectations. Stronger than expected US earnings, along with some better US data points, have seen the market rebuilding its expectations for the May FOMC with a further .25% now seen as highly likely and pricing for a further hike in June increasing also.Alongside hawkish Fed expectations, markets are also dealing with hawkish outlooks for both the ECB and BOE too. Stickiness in UK inflation at high levels is fuelling the view that the BOE will need to push ahead with further tightening, which is keeping the FTSE pressured for now. Similarly, the ECB has been heard this week reaffirming its support for further tightening which has curtailed upside in the Dax and other European indices.US earnings season is being closely watched currently. Generally, performance has been strong with the vast majority of companies seen beating forecasts. However, some misses from big names such as Goldman, Tesla and Netflix are adding to uncertainty. This week focus will be on the major tech names with Alphabet and Microsoft due today followed by Meta and Amazon later in the week.Technical ViewsDAXThe rally in the DAX has seen the index breaking out above the 15642.76 level. While above here, the focus is on a further push higher within the overall bull channel framing price action targeting 16278.35 next. To the downside, 15163.41 and the bull channel lows are the key support to note.S&P 500The rally in the S&P has stalled for now into the latest test of the 4153.50 level. Momentum studies are turning bearish here, highlighting risks of a reversal lower. If seen, 3910 is the next big support to note. To the topside, any breakout will target 4305 initially.FTSEFollowing the breakout above the bear trend line from YTD highs, the FTSE has stalled just above the 7834.7 level. While above here however, focus remains on a further push higher back towards the YTD highs at 8023.5. Back under this level, however, 7678.8 will be the next support to note.NIKKEIFor now, the rally in the Nikkei has stalled around the 28356.6 level highs. With momentum studies still bullish, however, focus remains on further upside while price holds above this level. Back below here, however, focus shifts to support at the 27422.9 level next.