Eurostoxx futures increased by 0.5% in early European trading, suggesting modest gains for the session. German DAX futures rose by 0.6%, while UK FTSE futures edged up by 0.2%.

These gains mirror the positive momentum from Wall Street, where indices nearly touched record highs. As the month-end nears, the sentiment remains optimistic, with S&P 500 futures also up by 0.2%.

That early uptick in Eurostoxx futures points to a generally brighter tone as markets opened in Europe, continuing the lead taken from Wall Street by carrying forward appetites for risk. The DAX and FTSE followed suit, albeit at varying intensities, reflecting different sectoral pressures and currency considerations.

What this essentially signals is that traders expect continued resilience in equity markets, buoyed by the upward push in major US indices, which have flirted with all-time highs. In other words, we’re seeing an extension of the rally that has been fed by strong earnings data and consistent economic indicators. US developments remain the leading influence across equity derivatives, filtering through via sentiment and positioning.

Month-end flows should not be understated. When we get this close to the turn of the calendar, portfolio rebalancing tends to add a layer of predictability to index futures demand — especially among funds tracking a benchmark. So, this increase in futures pricing ahead of month-end likely reflects tactical positioning among institutions aligning their portfolios rather than any material change in the macro backdrop. It’s important to understand what has driven this reactive buying so far.

Looking at where we stand, the marginal rise in US futures provides support for symmetrical movements in European contracts. That said, the S&P moving just 0.2% suggests there’s caution beneath the optimism — a measured approach, rather than enthusiasm. From our vantage point, that makes perfect sense. Volatility, while contained, has not disappeared; traders have remained sensitive to slight shifts in macro announcements and rate expectations.

Now, for practical steps in the short term — where a few misjudgements can eat into the week’s gains — we think it makes sense to pay more attention to intraday volume patterns and cross-asset correlations. For example, if yields continue ticking upward while futures hold their ground, that divergence can flag underlying strength in equity demand. Conversely, if futures wobble despite falling yields, it may warn of waning participation ahead.

Müller’s team has already hinted at the residual buying pressure in large-cap names, which could dampen any attempts at selling into strength before quarter-end. That shouldn’t be ignored. Short-term strategies based on fading rallies may underperform unless supported by macro shock or a reversal in US equity momentum.

Also worth noting is the slow pace of movement in the FTSE contracts — just a 0.2% lift — which suggests oil and commodity price developments are being weighed carefully. With sterling firming up recently, international earnings exposure in the index remains a drag, and we’ve observed hedging levels creeping up.

We’ve also seen a mild steepening bias in overnight implieds, which could create some tailwinds for holders of gamma-positive structures. However, traders should reassess delta exposures regularly during sessions like these, particularly when sentiment shifts quickly following news from Washington or Frankfurt.

As for the technical side, we’re sitting above key moving average levels in several contracts. Short-term traders may want to watch for signs of exhaustion in RSI readings as the week progresses, especially if futures open higher repeatedly without fresh data justifying the push. That kind of behavior can often lead to sharp intraday reversals.

In terms of sector flows, Schneider and his group have pointed out a rotation back into defensives over the past three sessions, despite the general lift in benchmarks. This implies traders are still hedging a possible reversal late in the week, likely triggered by macro surprises or changed central bank rhetoric. That setup opens the door for options-related flows to drive sharp moves—even in otherwise muted volume days.

Holding exposure through the end of the quarter will require more careful balancing between outright direction and volatility plays. We are actively adjusting ratio spreads and leaning away from naked positioning where liquidity dries up. Keep an eye on bid-ask skews in less-traded contracts—they’re starting to widen in pre-market again, especially outside of core hours.