European Open: Alibaba shares rally over 16% on news of company split

Asian Indices:

• Australia's ASX 200 index rose by 16.2 points (0.23%) and currently trades at 7,050.30
• Japan's Nikkei 225 index has risen by 225.58 points (0.82%) and currently trades at 27,743.83
• Hong Kong's Hang Seng index has risen by 380.45 points (1.92%) and currently trades at 20,165.10
• China's A50 Index has risen by 19.49 points (0.15%) and currently trades at 13,085.39

UK and Europe:

• UK's FTSE 100 futures are currently up 6 points (0.08%), the cash market is currently estimated to open at 7,490.25
• Euro STOXX 50 futures are currently up 16 points (0.39%), the cash market is currently estimated to open at 4,184.21
• Germany's DAX futures are currently up 59 points (0.39%), the cash market is currently estimated to open at 15,201.02

US Futures:

• DJI futures are currently up 126 points (0.39%)
• S&P 500 futures are currently up 19.25 points (0.48%)
• Nasdaq 100 futures are currently up 55.75 points (0.44%)

• Alibaba (BABA) shares rose as much as 16% overnight and led Chinese tech firms higher, on reports the company was planning to split into six units and explore fundraisings or listings for most of them
• This helped the Hang Send rise over 2% on signs that the crackdown on the Chinese tech sector was at the beginning of the end
• Australia’s annual rate of inflation was 6.8% y/y, below the 7.1% forecast and 7.4% prior. In our view this likely cements a policy pause from the RBA, even if some economists remain unconvinced and are still calling for a 25bp hike to 3.8%
• The BOE (Bank of England) release their systematic risk survey and Financial Policy Summary and Record at 10:30 BST, although neither is expected to be a market mover.
• The SNB (Swiss National Bank) release their quarterly bulletin at 14:00 BST for Q1 2023. The Q4 report noted that annual CPI remained “significantly above the range consistent with price stability”, and since then the SNB have hiked by another 50bp to a ‘mere’ 1.5% and warned that there could be more hikes to follow. Therefore, revisions to the inflation forecast are a key metric to watch in today’s bulletin.
• FOMC member Barr testifies before the U.S. House Financial Services Committee, although his pre-prepared remarks to the Senate yesterday suggest he’ll simply blame bad management for the demise of Silicon Valley Bank and send assurances that US banks remains ‘sound’
• BOC deputy governor speaks at 17:45 on the “market liquidity measures we took during COVID”, which is unlikely to be a market mover given its backward looking nature

GBP/USD 1-hour chart:

The pound has established an uptrend on the 1-hour chart, although prices have pulled back from their weekly highs and forming a potential bullish continuation pattern. Should momentum turn higher form current levels and breakout from consolidation, the daily R1 around 1.2360 comes into focus for bulls. If prices instead move lower after the open, bears can either target the 1.2300 area, around the bullish trendline, daily S1 and 50-bar EMA. Or bulls can wait for a potential long signal around lower support levels to see if momentum can realign with the 1-hour bullish trend.

Economic events up next (Times in GMT+1)

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge