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OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)
- SPI200 (Sep) overnight futures down 39 pts to 6515
- SP500 down 20.19 pts to 2906.27
- NASDAQ down 88.72 pts to 7874.16
- Dow Jones down 285.26 pts to 26118.02
- FTSE100 down 13.75 pts to 7268.19
- DAX30 down 42.92 pts to 11,910.86
- GOLD futures US Session (December) up $28.50 to $1557.90 an ounce
- COPPER futures US Session (Comex Dec) down $0.0220 to $2.5290 a pound
- OIL futures US Session (Nymex Oct) down $1.13 to $53.97 a barrel
- CRB Index down 1.17 pts to 169.19
- AUDUSD trading at 0.6761
- EURUSD trading at 1.0974
- GBPUSD trading at 1.2099
- USDJPY trading at 105.9400
- USD Index (ICE Sept) trading at 98.938 up 0.078
US Indexes came back from the long weekend to start the week on a low note. Traders exited some riskier assets as concerns grew for global growth prospects after data showed US factory activity shrank in August for the first time since 2016. New orders and hiring declined sharply as trade tensions weighed on business confidence. Business investment contracted in the second quarter for the first time in more than three years. The data points to the importance of consumers and that they continue to spend and prop up the economy but with the new round of tariffs and potentially more to come, the pressure is on. The DOW closed down 1.08% while the broader SP500 was down 0.69% and the Nasdaq also ended down 1.11%. In Europe, Indexes edged lower after starting the session relatively flat. They may play catch up tonight as the US moved lower after the European close. European equities are being weighed down by evidence of slower global growth and also as the chances of a ‘chaotic’ Brexit increased as Boris Johnson lost his working majority in parliament. Johnson on Monday implicitly warned lawmakers to back him on Brexit or face an election as opposition began a bid to stop and block a no-deal Brexit. Also, The ECB has all but promised to announce more stimulus after its Sept 12 meeting to support a slowing eurozone economy.
The USD was pushed lower after the manufacturing data release to give up most of the gains built up into the US open. Initial strength came from safe haven buying as markets came under pressure and gold moved higher. The EURO moved higher as the USD was sold off and managed to hold onto the gains into the close. The longer term trend is still lower and buyers will need to make a big effort to support price with a weakening Eurozone. The GBP found some support amid Brexit tensions and the prospect for a more orderly exit or delay to Brexit if parliament take control. The expectations saw sellers lock away some gains and pressure buyers which was later supported by the fall in the USD. The AUD rallied hard after local Current Account data came out a lot better than expected and the RBA left rates on hold. Price sharply rejected the 0.6690 zone and looks set to target some of the recent lower highs. The USDJPY came under pressure on the USD fall and was also helped lower by some safe haven YEN buying. The choppy mood into risk appetite continues to see some choppy moves into the YEN but we expect to see some lower prices if the Dollar continues to come under pressure.
Gold had a strong rally as safe haven buyers jumped back in to the action to push price higher after US data pressured risky assets. Oil also took a hit as demand is expected to dwindle on global growth issues and pressure from the likelihood that a trade deal is not coming anytime soon. Price was hit hard at the start of the European session but managed to make back some of the losses once the US opened for trade. Copper also found sellers to pressure prices at the start of the European session but bounced back to make back some of the losses as the USD fell on negative data.
Cryptocurrencies continued to edge higher with Bitcoin currently trading at $10694.5 up 2.94% while Ethereum is at $180.97 up 0.72% and Ripple is also up, currently at $0.26301 up 0.19%.
The ASX200 saw a choppy session yesterday as price moved between gains and losses for most of the session. In the end the index ended down 6 points to 6573.4 thanks to a 10 point pop in the final match. Sectors were generally slightly lower or slightly higher in an uneventful day as traders lacked the direction from the overnight US session. The RBA left rates unchanged as expected and sees a low interest rate environment for some time to come and will move to cut again if the need required.
The ASX200 is expected to open down 40 points after the SPI200 moved lower along with the US overnight.
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ECONOMIC DATA OUT TODAY (AEST)
AUD GDP 11:30am
CNY Caixin Services PMI 11:45am
EUR Final Services PMI 6pm
GBP Services PMI 6:30pm
CAD Trade Balance 10:30pm
USD Trade Balance 10:30pm
GBP Inflation Report Hearings 11:15pm
CAD BOC Rate Statement and Overnight Rate 12am
USD Beige Book 4am
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SPI200 INTRADAY LEVELS TO WATCH
