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OVERNIGHT MARKET SNAPSHOT (as at 8am AEDT)
- SPI200 (Dec) overnight futures up 27 pts to 6769
- SP500 up 23.23 pts to 3133.54
- NASDAQ up 112.60 pts to 8632.49
- Dow Jones up 190.85 pts to 28,06647
- FTSE100 up 69.48 pts to 7396.29
- DAX30 up 82.57 pts to 13,246.45
- GOLD futures US Session (Feb Contract) down $8.70 to $1461.80 an ounce
- COPPER futures US Session (Comex Mar) up $0.003 to $2.6620 a pound
- OIL futures US Session (Nymex Jan) up $0.21 to $57.98 a barrel
- CRB Index up 0.20 pts to 180.57
- AUDUSD trading at 0.6777
- EURUSD trading at 1.1010
- GBPUSD trading at 1.2901
- USDJPY trading at 108.9400
- USD Index US Session (ICE Dec) up 0.062 to 98.238
US Stock Indexes continued higher as traders followed the trend up on the back of further ‘positive’ trade news. A Chinese state-backed tabloid said Beijing and Washington were ‘very close’ to an initial pact which lifted expectations that a deal is still possible by the end of the year. The broader market SP500 managed to push up into new all time highs along with the Nasdaq as tech stocks found support on China comments. The DOW closed up 0.39% while the broader SP500 was up 0.22% and the Nasdaq ended up 0.16%. In Europe, Indexes had another good session with shares being pushed higher on trade sentiment. Merger and Acquisition activity also buoyed sentiment going into the year end. With China appearing to be willing to relent on a few key issues such as intellectual property, we may see a Xmas rally to end out 2019 (if it hasn’t already started). Data out in Germany pointed to improved business morale in November although also indicated that manufacturing was still stuck in a recession.
The New York Fed Reserve Bank released a study on the affects of the tariffs stating that US companies and consumers are paying the tariff costs. The costs, which is estimated to be around $40B annually, was supposedly going to be paid by China according to the Trump administration. It was implied that Chinese manufacturers were going to cut their prices to absorb import taxes which has not been the case. This would suggest that the US will need to do a deal as the Consumer is their top priority to continue to support the economy. The report also found that China is feeling the impact of the higher prices as they lose market share to other nations who are better able to compete.
The USD continued to be buoyed as sellers are squeezed out of the action and positive trade sentiment led shares higher. The EURO continued to be put under pressure from sellers as the USD moved higher. The GBP gained back some lost ground as price rallied on the back of polls which continued to show the ruling Conservatives as runaway favourites to win the Dec 12th election with a pledge to implement Brexit and halt three and a half years of political uncertainty. The AUD continued to move lower and push through recent lows around 0.6769 on USD pressure. We expect to see a reaction higher as some shorts cover gains. The USDJPY continues to look strong as traders prefer the USD over other majors. We expect that the YEN is still finding minor safe haven buying as trade news could change at any moment.
Gold continued lower as the dollar rallied and traders continued to be risk on into shares. Gold looks set to test the key lows around $1448 on the futures. Aussie gold looks heavy which will put our local gold stocks under pressure. Crude Oil ended the night where it started after a clean out lower of some recent buyers. We expect that Crude will continue to gain ground on positive trade sentiment as recent action looks corrective in nature prior to another run higher. Copper saw a choppy session as bulls ramped price higher through the European session until bears, thanks to strength in the USD, pushed price back down into the US close.
Cryptocurrencies managed to make back some of the lost ground from the recent run lower as Bitcoin hovers around the $7215.2 level up 2.35%. Ethereum is currently at $147.44 up 2.04% while Ripple lags and is at $0.22016 down 2.42%.
The ASX200 opened stronger than expected yesterday but faded into the close to end up 21.6 points to 6731.4. Positive trade news helped support the markets as Asian stocks also rallied in morning trade. The Telecom Services sector was the best performer followed closely by Energy while Gold stocks were lower. Falling stocks outnumbered advancing ones by 608 to 500 and 378 ended unchanged.
The ASX200 is expected to open up 30 points after the SPI200 grinded higher overnight to end on its highs.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD RBA Deputy Gov Debelle Speaks 10:50am
EUR German Consumer Climate 6pm
AUD RBA Gov Lowe Speaks 8:05pm
GBP High Street Lending 8:30pm
USD Goods Trade Balance and Prelim Wholesale Inventories 12:30am
USD Consumer Confidence and Richmond Manufacturing Index 2am
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SPI200 INTRADAY LEVELS TO WATCH
