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OVERNIGHT MARKET SNAPSHOT
- SPI200 (Dec) overnight futures down 35 pts to 6786
- SP500 down 1.86 pts to 3120.17
- NASDAQ up 20.72 pts to 8570.66
- Dow Jones down 102.20 pts to 27,934.02
- FTSE100 up 16.10 pts to 7323.80
- DAX30 up 14.11 pts to 13,221.12
- GOLD futures US Session (December) up $0.80 to $1472.70 an ounce
- COPPER futures US Session (Comex Mar) up $0.037 to $2.6570 a pound
- OIL futures US Session (Nymex Dec) down $1.85 to $55.20 a barrel
- CRB Index down 2.02 pts to 177.16
- AUDUSD trading at 0.6826
- EURUSD trading at 1.1076
- GBPUSD trading at 1.2924
- USDJPY trading at 108.5400
- USD Index US Session (ICE Dec) up 0.064 to 97.727
US Stock Indexes moved lower from the open as a change in tone on the trade front saw a wave of profit taking as major Indexes trade at all time highs after the recent solid run up. Trump, in a cabinet meeting, said that he will simply have to raise tariffs even higher if there is no deal with China and also one that he likes. The news offset recent positive news on the Huawei 90-day extension for US companies doing business with the Chinese tech company. We expect that there is a lot of positive news already build into the price so traders will have there fingers on the trigger ready to sell down risk assets if any negative news expectations start to build. The DOW closed down 0.36% while the broader SP500 was down 0.06% and the Nasdaq ended up 0.24%. In Europe, Indexes gave up earlier gains in a choppy session as news on trade hit the wires. Sticking points for a deal continue to be centered around how and when to reduce tariffs and how much US agricultural products China would commit to buy.
Trumps impeachment continues to gather steam as further witnesses testify that aide was being used as a blackmail tool to request push Ukraine to investigate Joe Biden. US Consumer spending came into question after dour forecasts from Home Depot and Kohl’s Department stores eroded confidence on the strength of US consumer spending ahead of the all important holiday shopping season. These factors, along with sentiment on a trade deal, will have bulls considering whether to add risk at such high levels or whether to lock away some gains.
The USD managed to end higher in a choppy session where safe haven buyers flowed back into the dollar as trade deal hopes were dashed. Traders will now be focused on the FOMC Minutes as they try to make sense of the Feds stance on the economy and the next step for interest rates. The EURO moved lock and step with the USD as the action was choppy and range bound with traders needing more clarity on the trade situation before making their next move. The GBP fell back from highs as further buyers were happy to lock away some gains off the highs at 1.2975. The AUD rallied hard after clearing out a few buyers on a spike lower in Asian trade. The Aussie managed to rally through the European and US sessions against the chop of the USD. It will be interesting to see whether price can continue the short term bullish move or whether sellers take charge on the potential for further RBA rate cuts. The USDJPY is starting to look heavy which would suggest further safe haven YEN buying and potential dollar weakness.
Gold is finding some buyers as higher lows hold above the 1450 level on the futures. If negative sentiment into trade continues then we expect to see safe haven buyers push price up through 1475 off the most recent higher low at 1465. Crude Oil took a nosedive through the support level around 56.50. The negative sentiment on trade and therefore future demand, had buyers running for cover and closing long bets on the commodity. We expect to see further downside as price searches for liquidity to build support. Copper managed to do well and end up on the highs for the session as buyers pushed prices up off support around 2.6165. We expect that price is a little stretched and may give back some of the gains in the near term.
Cryptocurrencies sank a little further overnight as bull sentiment waned. Bitcoin is currently trading at $8095.6 down 1.65% while Ethereum is at $173.59 down 3.09% and Ripple is trading at $0.24870 down 1.98%.
The ASX200 started the session slow yesterday but by midday, buyers started to increase the pressure and push prices higher into the close. In the end the index ended up 47.4 points to 6814.2 with all sectors, apart from IT, ending in the green. The best performing sectors were Consumer Staples then Telecommunication Services. Rising stocks outnumbered declining ones by 606 to 539 and 345 ended unchanged.
The ASX200 is expected to open down 35 points as the SPI200 fell like a stone on the back of the trade news overnight.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD MI Leading Index 10:30am
JPY Trade Balance 10:50am
EUR German PPI 6pm
EUR ECB Financial Stability Review 8pm
CAD CPI Data 12:30am
USD Crude Oil Inventories 2:30am
USD FOMC Meeting Minutes 6am
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SPI200 INTRADAY LEVELS TO WATCH
