Europe

The United States is about to activate its missile systems across Europe, despite Russia warning against increasing US-led arms deployment near its borders. The missile defence shield that cost billions of dollars will go live tomorrow almost a decade after Washington proposed protecting NATO from Iranian rockets. American and NATO officials will declare the shield, which is located at a remote air base in Deveselu, Romania, is operational despite Russian warnings that the West is threatening the peace in central Europe.

Following months of appeasement of Turkey's dictator Recep Erdogan, Europe has found itself surprised that as it yields to every incremental demand, Turkey simply asks for more and more. One such example was chronicled by the FT earlier today in "Turkey demands EU hands over €3bn for refugees" in which we read that "a row has erupted between Turkey and the EU over billions of pounds in aid for Syrian refugees, casting fresh doubt on a fragile deal to halt the flow of people towards Europe."

Refugees escaping war and hardship in the Middle East who risked their lives and paid smugglers 1000’s of dollars to reach the safety of Europe, are now trying to swim their way back to Turkey. They are leaving behind asylum detention centers described by some as unfit for animals. Some migrants weary of deportation back to Turkey and an uncertain welcome by the authorities have pre-empted the process to avoid facing Turkish interrogation and detention.

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The STOXX Europe 600 is trending below declining and bearishly positioned 26 and 40-week moving averages, and as BofAML's Stephen Suttmeier warns, ECB quantitative easing has not reversed this bearish trend.

The 2016 set-up is similar to early 2001 and early 2008 with important resistance at 350 and important support at 300. Both 2001 and 2008 saw rebounds into bearishly positioned and falling 26/40-week MAs that formed important lower tops in May.