Weekly Technicals Essentials

Where are markets on risk appetite? 

In this week’s short edition of Essentials we look at risk attitudes. Risk appetite has weakened in terms of equities versus bonds and across multi-asset markets. Less sharp moves in global sectors may be masking underlying caution. 

US small-caps have reached an important inflection point.

Recent overbought volatility and oversold short-term momentum is consistent with support emerging for Russell 2000 around 2130. Stretched pessimism on Russell 2000 versus 1000 also points to contrarian support in a relative context. 

Watch metals ties to US30Y (now below key yield support)

Copper has recently found support versus Gold. This is worth watching from a bond perspective given historic inverse correlations. Especially at a time when the US30Y yield has dropped below key support around 1.78%.

Weekly Technicals Essentials