Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
You can access both of our platforms from a single Saxo account.
Technical Update - US and EU Banking Sector turning bearish. Further downside in the cards
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: SVB Financials difficulties spreading to rest of banking sector in Europe and US. European Banking Sector seems to form top and reversal patterns whereas US Banking Sector taking out or testing key supports. SVB share price indicated open below 2016 level
The Europe Stoxx 600 Banks sector has been hard hit this morning after bad news and heavy selling in US banks last night. The uptrend has been weakening past few weeks as indicated by the Divergence on RSI.
The Lyxor Europe Stoxx 600 Banks ETF opened more than 5% down at the key support at around 22.75 and the 55 daily Moving average. At the time of writing buyers are lifting the Sector EFT from the support.
If the Europe Stoxx 600 Banks ETF closes below 22.75 and RSI closes below 40 threshold downtrend is confirmed with a move down to support and 0.382 retracement at around 21.72-21.52 to be the likely scenario.
To get Europe Stoxx 600 Banks ETF back to bullish trend minimum requirement is a close of the gap this morning.
On weekly chart the ETF has formed a potential Bearish Engulfing top and reversal candle (unless it closes above 23.84 today Friday) testing lower steep rising trendline . A close below could pave the way for a downtrend to strong support area around 20.26-19.58. 19.58 is also the 0.618 retracement of the uptrend.
To demolish and reverse the top and reversal scenario a close above 24.60 is needed. First singal of this to play out would be a close of the gap created with the opening this morning
The SPDR S&P Regional Banking ETF (KRE) was hard hist yesterday following the news in SVB Financial. SVB was the largest holding in the ETF.
The Regional Banking ETF has broken below key support at 56 thus breaking bearish out of a medium-term Descending triangle like pattern – see weekly chart. The downside potential, given that KRE closes the week below 56, is between 42 and 33 i.e., the Consolidation area from 2020. Illustrated by the vertical arrows.
RSI is currently below 40 supporting the negative outlook for KRE.
To reverse the bearish picture a close above 62.55 is needed.
The SPDR S&P Banking ETF (KBE) closed bang on the key support at 42.60. Otherwise the technical picture is identical to the Regional Banking ETF KRE.
RSI is below 40 i.e., in negative sentiment supporting the bearish outlook where KBE is likely to trade lower. Strong support at around 35.
To reverse the bearish picture a close above 50.82 is needed.
SVB Financial Group share price is back to 2016 levels. Pre-market it is indicated lower around 60 USD which is around the 2011-2013 level.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer