Daily Market Outlook, May 15, 2025
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute…
Asian markets fell on Thursday, experiencing their first decline in five sessions, as the gains on Wall Street spurred by US-China trade talks appeared to be losing momentum. Both Japanese and Chinese stock markets, alongside US futures, saw decreases, reflecting a cautious mood following a week marked by a robust rebound in risk assets driven by progress in trade discussions and economic stability. There are ongoing worries that stock prices may have risen too high, leaving them susceptible to sudden changes. European stock futures also saw minor dips. Despite this, the developing US-China trade agreement, a deal in the UK, and major transactions in the Gulf have reassured investors. The S&P 500 recorded a slight increase of 0.1% overnight, while the Nasdaq 100 climbed 0.5%, boosted by Nvidia's strong performance that recovered its losses for 2025. The dollar index fell on Thursday, undoing a rally from Wednesday, as the US dollar weakened against most of the Group of 10 currencies. The yen appreciated to about 146 per dollar, and the Australian dollar strengthened following better-than-expected employment figures.
China's recent credit report highlights ongoing worries about the transmission mechanism, showing a further shortfall compared to expectations in April. While there is some seasonal variation to take into account—April traditionally being a weaker month for overall lending—the total growth in social financing of RMB1,630bn remains subdued. Even when adjusting for seasonality, it is evident that State institutions are the main drivers of credit demand, with local government bond issuance exceeding three times the rate observed from January to April last year (RMB4,850bn compared to RMB1,250bn in 2024). This trend extends to other components, as State-owned banks, which facilitate SOE borrowing, continue to dominate total bank lending. This situation is likely to continue after a recent 50bps reduction in the Required Reserve Ratio for large banks (down to 9%) and a 10bps cut to the 7-day reverse repo rate (now at 1.4%), as the PBoC maintains a stance aimed at fostering accommodative monetary conditions. Private sector confidence has already been fragile, and trade tensions are expected to deepen these trends, even following the decrease from the severe 145% retaliatory tax. Additional policy measures to boost domestic consumption are necessary. However, it seems that Beijing is still reluctant to implement significant reforms, choosing instead to gradually introduce measures aimed at supporting its broader growth objectives. Without such reforms, achieving results from this strategy will only become more challenging.
This morning, the ONS reported that the UK economy grew by 0.7% quarter-on-quarter in Q1, slightly above market expectations and the BoE's recent forecast. This growth exceeds the potential rate, but appears to be temporary. Exports surged by 3.5%, likely due to pre-tariff frontloading, which is expected to reverse. Additionally, April's PMI surveys fell below 50, indicating contraction due to US trade policy impacts. Despite some tariff moderation, a sustained Q1 growth rate seems unlikely. The BoE noted that 'underlying' GDP growth was near zero in Q1 2025, with only 0.1% expected in Q2. May's PMI data will provide clearer insights, and the BoE will focus on broader trends, considering past growth was often 0.3% or less.
Today's macro slate features key events including Euro area Q1 GDP, US PPI, Empire State Index, Jobless Claims, Philly Fed index, NAHB housing market index, and retail sales figures. Central bank officials speaking today include Fed's Powell and Barr, BoE's Dhingra, and ECB representatives Cipollone, Elderson, and Gundos.
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.1090-1.1095 (1.9BLN), 1.1100-05 (3.5BLN), 1.1125-35 (782M)
1.1150 (1BLN), 1.1160-65 (1.2BLN), 1.1175 (582M), 1.1200 (1.6BLN)
1.1250 (607M) 1.1300-05 (1.1BLN)
USD/CHF: 0.8335 (448M), 0.8365 (320M)
EUR/CHF: 0.9400 (305M) , 0.9450 (338M), 0.9500 (620M)
EUR/GBP: 0.8375 (322M), 0.8450 (500M), 0.8550 (541M)
GBP/USD: 1.3230-35 (760M), 1.3450 (223M), 1.3500 (657M)
AUD/USD: 0.6355 (556M), 0.6450 (325M), 0.6475 (2.6BLN), 0.6500 (718M)
AUD/NZD: 1.0950 (556M). NZD/USD: 0.5880 (1BLN)
USD/CAD: 1.3860 (476M), 1.3900 (531M), 1.3960 (376M), 1.4075 (478M)
USD/JPY: 145.00 (3.2BLN), 145.25-35 (1BLN), 145.80 (730M), 146.00 (393M),
146.75 (598M), 146.95-147.00 (1.8BLN), 147.15 (355M), 147.30-35 (543M)
EUR/JPY: 162.50 (565M). AUD/JPY: 94.50 (732M)
CFTC Data As Of 9/5/25
Speculators raised their net short position in CBOT US Treasury bonds futures by 10,233 contracts to a total of 95,789. They also increased their net short position in CBOT US Ultrabond Treasury futures by 13,381 contracts, bringing it to 264,775.
In addition, speculators elevated their net short position in CBOT US 2-year Treasury futures by 14,416 contracts, resulting in a total of 1,220,793. The net short position for CBOT US 5-year Treasury futures went up by 3,952 contracts to 2,296,496. The net short position for CBOT US 10-year Treasury futures increased by 81,631 contracts, reaching 953,168.
Equity fund managers reduced their net long position in the S&P 500 CME by 13,088 contracts, bringing it to 813,162. Meanwhile, equity fund speculators raised their net short position in the S&P 500 CME by 6,469 contracts, totaling 255,931.
The net long position for the Japanese yen stands at 176,859 contracts, the euro at 75,719 contracts, and the British pound at 29,235 contracts. The Swiss franc has a net short position of -23,574 contracts, and Bitcoin's net short position is -1,781 contracts..
Technical & Trade Views
- SP500 Pivot 5750
Daily VWAP bullish
Weekly VWAP bullish
Above 5790 target 5900
Below 5500 target 5385
- EURUSD Pivot 1.11
Daily VWAP bearish
Weekly VWAP bearish
Above 1.12 target 1.19
Below 1.1070 target 1.0945
- GBPUSD Pivot 1.28
Daily VWAP bullish
Weekly VWAP bullish
Above 1.34 target 1.38
Below 1.29 target 1.27
- USDJPY Pivot 147.70
Daily VWAP bearish
Weekly VWAP bullish
Above 1.52 target 153.80
Below 146.53 target 139
- XAUUSD Pivot 3100
Daily VWAP bearish
Weekly VWAP bullish
Above 3200 target 3640
Below 3000 target 2950
- BTCUSD Pivot 96.7k
Daily VWAP bearish
Weekly VWAP bullish
Above 97k target 105k
Below 95k target 65kDaily Market Outlook, May 15, 2025
Daily Market Outlook, May 15, 2025
Patrick Munnelly, Partner: Market Strategy, Tickmill Group
Munnelly’s Macro Minute…
Asian markets fell on Thursday, experiencing their first decline in five sessions, as the gains on Wall Street spurred by US-China trade talks appeared to be losing momentum. Both Japanese and Chinese stock markets, alongside US futures, saw decreases, reflecting a cautious mood following a week marked by a robust rebound in risk assets driven by progress in trade discussions and economic stability. There are ongoing worries that stock prices may have risen too high, leaving them susceptible to sudden changes. European stock futures also saw minor dips. Despite this, the developing US-China trade agreement, a deal in the UK, and major transactions in the Gulf have reassured investors. The S&P 500 recorded a slight increase of 0.1% overnight, while the Nasdaq 100 climbed 0.5%, boosted by Nvidia's strong performance that recovered its losses for 2025. The dollar index fell on Thursday, undoing a rally from Wednesday, as the US dollar weakened against most of the Group of 10 currencies. The yen appreciated to about 146 per dollar, and the Australian dollar strengthened following better-than-expected employment figures.
China's recent credit report highlights ongoing worries about the transmission mechanism, showing a further shortfall compared to expectations in April. While there is some seasonal variation to take into account—April traditionally being a weaker month for overall lending—the total growth in social financing of RMB1,630bn remains subdued. Even when adjusting for seasonality, it is evident that State institutions are the main drivers of credit demand, with local government bond issuance exceeding three times the rate observed from January to April last year (RMB4,850bn compared to RMB1,250bn in 2024). This trend extends to other components, as State-owned banks, which facilitate SOE borrowing, continue to dominate total bank lending. This situation is likely to continue after a recent 50bps reduction in the Required Reserve Ratio for large banks (down to 9%) and a 10bps cut to the 7-day reverse repo rate (now at 1.4%), as the PBoC maintains a stance aimed at fostering accommodative monetary conditions. Private sector confidence has already been fragile, and trade tensions are expected to deepen these trends, even following the decrease from the severe 145% retaliatory tax. Additional policy measures to boost domestic consumption are necessary. However, it seems that Beijing is still reluctant to implement significant reforms, choosing instead to gradually introduce measures aimed at supporting its broader growth objectives. Without such reforms, achieving results from this strategy will only become more challenging.
This morning, the ONS reported that the UK economy grew by 0.7% quarter-on-quarter in Q1, slightly above market expectations and the BoE's recent forecast. This growth exceeds the potential rate, but appears to be temporary. Exports surged by 3.5%, likely due to pre-tariff frontloading, which is expected to reverse. Additionally, April's PMI surveys fell below 50, indicating contraction due to US trade policy impacts. Despite some tariff moderation, a sustained Q1 growth rate seems unlikely. The BoE noted that 'underlying' GDP growth was near zero in Q1 2025, with only 0.1% expected in Q2. May's PMI data will provide clearer insights, and the BoE will focus on broader trends, considering past growth was often 0.3% or less.
Today's macro slate features key events including Euro area Q1 GDP, US PPI, Empire State Index, Jobless Claims, Philly Fed index, NAHB housing market index, and retail sales figures. Central bank officials speaking today include Fed's Powell and Barr, BoE's Dhingra, and ECB representatives Cipollone, Elderson, and Gundos.
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.1090-1.1095 (1.9BLN), 1.1100-05 (3.5BLN), 1.1125-35 (782M)
1.1150 (1BLN), 1.1160-65 (1.2BLN), 1.1175 (582M), 1.1200 (1.6BLN)
1.1250 (607M) 1.1300-05 (1.1BLN)
USD/CHF: 0.8335 (448M), 0.8365 (320M)
EUR/CHF: 0.9400 (305M) , 0.9450 (338M), 0.9500 (620M)
EUR/GBP: 0.8375 (322M), 0.8450 (500M), 0.8550 (541M)
GBP/USD: 1.3230-35 (760M), 1.3450 (223M), 1.3500 (657M)
AUD/USD: 0.6355 (556M), 0.6450 (325M), 0.6475 (2.6BLN), 0.6500 (718M)
AUD/NZD: 1.0950 (556M). NZD/USD: 0.5880 (1BLN)
USD/CAD: 1.3860 (476M), 1.3900 (531M), 1.3960 (376M), 1.4075 (478M)
USD/JPY: 145.00 (3.2BLN), 145.25-35 (1BLN), 145.80 (730M), 146.00 (393M),
146.75 (598M), 146.95-147.00 (1.8BLN), 147.15 (355M), 147.30-35 (543M)
EUR/JPY: 162.50 (565M). AUD/JPY: 94.50 (732M)
CFTC Data As Of 9/5/25
Speculators raised their net short position in CBOT US Treasury bonds futures by 10,233 contracts to a total of 95,789. They also increased their net short position in CBOT US Ultrabond Treasury futures by 13,381 contracts, bringing it to 264,775.
In addition, speculators elevated their net short position in CBOT US 2-year Treasury futures by 14,416 contracts, resulting in a total of 1,220,793. The net short position for CBOT US 5-year Treasury futures went up by 3,952 contracts to 2,296,496. The net short position for CBOT US 10-year Treasury futures increased by 81,631 contracts, reaching 953,168.
Equity fund managers reduced their net long position in the S&P 500 CME by 13,088 contracts, bringing it to 813,162. Meanwhile, equity fund speculators raised their net short position in the S&P 500 CME by 6,469 contracts, totaling 255,931.
The net long position for the Japanese yen stands at 176,859 contracts, the euro at 75,719 contracts, and the British pound at 29,235 contracts. The Swiss franc has a net short position of -23,574 contracts, and Bitcoin's net short position is -1,781 contracts..
Technical & Trade Views
- SP500 Pivot 5750
Daily VWAP bullish
Weekly VWAP bullish
Above 5790 target 5900
Below 5500 target 5385
- EURUSD Pivot 1.11
Daily VWAP bearish
Weekly VWAP bearish
Above 1.12 target 1.19
Below 1.1070 target 1.0945
- GBPUSD Pivot 1.28
Daily VWAP bullish
Weekly VWAP bullish
Above 1.34 target 1.38
Below 1.29 target 1.27
- USDJPY Pivot 147.70
Daily VWAP bearish
Weekly VWAP bullish
Above 1.52 target 153.80
Below 146.53 target 139
- XAUUSD Pivot 3100
Daily VWAP bearish
Weekly VWAP bullish
Above 3200 target 3640
Below 3000 target 2950
- BTCUSD Pivot 96.7k
Daily VWAP bearish
Weekly VWAP bullish
Above 97k target 105k
Below 95k target 65kPublication date:
2025-05-15 10:27:06 (GMT)
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