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OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)
- SPI200 (Sep) overnight futures up 11 pts to 6611
- SP500 up 38.22 pts to 2976.00
- NASDAQ up 139.95 pts to 8116.83
- Dow Jones up 372.68 pts to 26728.15
- FTSE100 down 40.09 pts to 7271.17
- DAX30 up 101.74 pts to 12,126.78
- GOLD futures US Session (December) down $33.30 to $1527.10 an ounce
- COPPER futures US Session (Comex Dec) up $0.0360 to $2.6310 a pound
- OIL futures US Session (Nymex Oct) down $0.08 to $56.18 a barrel
- CRB Index down 0.35 pts to 172.35
- AUDUSD trading at 0.6816
- EURUSD trading at 1.1035
- GBPUSD trading at 1.2333
- USDJPY trading at 106.9700
- USD Index (ICE Sept) trading at 98.350 down 0.043
US Indexes up strong again and back in rally mode as the bulls came out to play on the back of China and the US agreeing to continue the trade talks. Buyers are not being deterred even by risks to growth after a research paper from the Fed Reserve suggests hundreds of billions of dollars in lost US output and a hit to GDP. The news of talks to be held in early Oct saw buyers start the march higher with the move being backed by better than expected Jobs data. The US The DOW closed up 1.41% while the broader SP500 was up 1.30% and the Nasdaq also ended up 1.75%. In Europe, Indexes were higher on renewed trade hopes as US bond yields surged to take pressure off the inverted yield curve. The FTSE was weaker on intensifying uncertainty over what path Brexit will take.
The broader market SP500 has made back the bulk of the losses from the move lower that started late July and we do not see that much has changed. Labour data remains steady although inflation is easy and may remain weak as the economy is constrained by tariffs. That means tariffs are the key and nothing has changed there either. The US and China seem to be going through the motions to support the market yet not ever coming to an agreement to end the trade war…and may not anytime soon. If anything, tariffs are set to increase and further constrain growth. If a deal is unexpectedly done, then it will be interesting if buyers keep up the momentum higher. Jobs data tonight will be in focus and traders will be watching closely to see if the economy really is teetering on recession or whether headwinds are just in manufacturing.
The USD ended the session higher with a rally on the US open to make back most of the losses from the European session. Positive data out in the US supported the bulls although does point to less stimulus from the US Fed Reserve in the way of rate cuts. The EURO spiked higher on the open of the European session as a potential end to the trade wars supported the currency and provided the fuel for a further short squeeze. The GBP found further buying support as the prospects for a disorderly no-deal brexit are going to be avoided. The AUD held onto recent gains and looks supported for an extension up through recent highs. The USDJPY moved higher as safe haven YEN buyers ran for the hills to offset any weakness in the USD and price smashed up through the 106.750 resistance zone.
Gold was hit lower as safe haven buyers had to re-assess the action as risk continued into the equity markets. The hopes for an end to the trade war have buyers steaming back into shares and safe haven traders locking away gains. Oil was volatile as gains from a spike into 57.50 were given back after weaker than expected inventory data was released with price ending relatively flat into the close and holding in the range with support around 53.00 and resistance around 57.50. Copper continues to find selling pressure released as buyers moved price higher on the hopes for a rise in demand.
Cryptocurrencies again had a relatively uneventful session as Bitcoin hovers around $10514.1 down 0.81%. Ethereum is weaker as it currently trades at $172.12 down 2.25% and Ripple is at $0.25440 down 2.05%.
The ASX200 opened strong yesterday and got a little boost during the session as China announced that they will hold ‘high level’ trade talks with the US in early October (again no date given) which the market liked. The Index ended the session up 60.2 points to 6613.2 with all sectors ending in the green accept Gold which saw a bout of profit taking. Rising stocks outnumbered declining ones by 751 to 470 and 349 ended unchanged.
The ASX200 is expected to open up 10 points as the bulls come out to play overnight on the back of another pump up for trade talks.
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ECONOMIC DATA OUT TODAY (AEST)
JPY Average Cash Earnings and Household Spending 9:30am
EUR German Industrial Production 4pm
GBP Consumer Inflation Expectations 6:30pm
EUR Final Employment Change and Revised GDP 7pm
USD Non-Farm Employment Change and Unemployment Rate 10:30pm
USD Fed Chair Powell Speaks 2:30am
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SPI200 INTRADAY LEVELS TO WATCH
