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OVERNIGHT MARKET SNAPSHOT
- SPI200 (Dec) overnight futures up 12 pts to 6732
- SP500 up 6.75 pts to 3110.29
- NASDAQ up 13.67 pts to 8519.89
- Dow Jones up 109.33 pts to 27,875.62
- FTSE100 up 88.26 pts to 7326.81
- DAX30 up 26.18 pts to 13,163.88
- GOLD futures US Session (December) flat to $1463.60 an ounce
- COPPER futures US Session (Comex Mar) up $0.021 to $2.6450 a pound
- OIL futures US Session (Nymex Jan) down $0.81 to $57.77 a barrel
- CRB Index down 0.36 pts to 180.37
- AUDUSD trading at 0.6786
- EURUSD trading at 1.1021
- GBPUSD trading at 1.2834
- USDJPY trading at 108.6600
- USD Index US Session (ICE Dec) up 0.276 to 98.175
US Stock Indexes regained momentum to continue their move higher into the weekend. Indexes were buoyed by some positive economic data and positive messages from both China and the US on trade. Markets were supported by China’s renewed offer to reach a trade deal after President Xi said China wanted to work out an initial pact. Even when the news on trade is not so great, markets remain ‘bid’ as buyers continue to look to new highs. Bond markets remain pessimistic towards the trade deal as traders try to decipher what is real and what is not in the way of trade comments as more tariffs are due to kick in on Dec 15th. The DOW closed up 0.39% while the broader SP500 was up 0.22% and the Nasdaq ended up 0.16%. In Europe, Indexes were also supported by trade comments from Trump that a deal is ‘potentially very close’ even after economic data out showed Eurozone growth continues to be under pressure. Traders found comfort in the fact that they numbers may be showing that the downturn in global trade and manufacturing may be approaching the bottom.
The mood could easily change as we expect to see tensions increase between the US and China after China attacks the US at G20 on the weekend. China’s top diplomat said on Saturday, the US is the world’s biggest source of instability and its politicians are going around the world ‘baselessly smearing China’. Even though the latest trade rhetoric was positive, a deal could be called off if President Donald Trump signs into law a bill supporting Hong Kong’s pro-democracy protesters or if US warships keep sailing near islands China claims in the South China Sea.
The USD continued to move higher being supported by positive data showing resilience of the US economy compared to other countries. The move shows that traders prefer the USD over riskier currencies and are happy to hold dollars until further progress is made on the trade front, not just talk and mixed messages. The EURO came under pressure as the dollar rallied and Manufacturing data in the Eurozone continued to lag. The GBP was hit after economic data showed business suffered a deep downturn thanks to uncertainty in Brexit. The weakness in the Pound did help to support the export heavy Index. The AUD also came under selling pressure and was not convinced by trade news. The trend has been down of late as traders may be factoring in further tariffs on Dec 15th as the US and China continually fail to come to terms for a phase 1 deal. The USDJPY is looking buoyant as the dollar rallies but a safe haven Bid into the YEN may push price lower through the 108.255 lows.
Gold went lower as the dollar strength pressured prices. The move in gold supports the risk on tone into equities as traders remain convinced that a trade deal will be done…sooner or later. Crude Oil was not so convincing as price fell away from highs under dollar strength. The move is more due to buyers locking away gains into the weekend than negativity for trade after a run up from the $55 mark in recent days. Copper was happy to lift off support in a sign that buyers are willing to hold support as long as trade news does not take a turn for the worse.
Cryptocurrencies had a choppy session as sellers remain in control and pressure prices lower. Bitcoin is currently trading at $7061.1 down 3.16% while Ethereum is at $144.63 down 4.57% and Ripple is trading at $0.22575 down 3.03%. Bitcoin is down over 17% in the last week pressuring key support levels which, if broken, may trigger further selling.
The ASX200 went into the weekend on a positive note after a few sessions that the bulls would prefer to forget. At the close the index was up 36.9 points to 6709.8 with the Info Tech, Energy and Resources sectors leading the way. Buyers were also active in the Metals and Mining and Materials sectors while Gold found some selling pressure. Rising stocks outnumbered declining ones by 608 to 507 and 335 ended unchanged.
The ASX200 is expected to open up 10 points after the SPI200 held onto the gains made during the day session into the weekend.
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ECONOMIC DATA OUT TODAY (AEDT)
EUR German Ifo Business Climate 8pm
CAD Wholesale Sales 12:30am
CNY CB Leading Index 1am
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SPI200 INTRADAY LEVELS TO WATCH
