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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 29/01/20 8:30am AEDT
- SPI200 (Mar) overnight futures up 38 pts to 6977
- SP500 up 32.61 pts to 3276.24
- NASDAQ up 130.37 pts to 9269.68
- Dow Jones up 187.05 pts to 28,722.85
- FTSE100 up 68.64 pts to 7480.69
- DAX30 up 118.92 pts to 13,323.69
- GOLD futures (April Contract) down $11.40 to $1572.30 an ounce
- COPPER futures (Comex Mar) down $0.008 to $2.588 a pound
- OIL futures US Session (Nymex Mar) up $0.65 to $53.79 a barrel
- CRB Index up 0.62 pts to 173.80
- AUDUSD trading at 0.6762
- EURUSD trading at 1.1022
- GBPUSD trading at 1.3024
- USDJPY trading at 109.1700
- USD Index US Session (ICE March) up 0.013 to 97.780
It was a reversal of fortunes overnight as the US bounced back from the previous sessions beating to make back some of the lost ground. US bonds gave up recent gains through the European session as bargain hunters were out in force supporting the share markets. Safe haven assets reversed as traders were happy to be risk on back into shares as they see the previous move lower as being ‘overcooked’. The US was on track to make back all the losses but concerns on how China’s growth will be affected by the virus outbreak continued to cap the action. China’s President Xi Jinping said the country was sure of defeating the “devil” virus. Apple came out with results after market posting record revenue and a return to profit growth. The DOW bounced back to close up 0.66% while the broader SP500 was up 1.01% and the Nasdaq also closed up 1.43% for the session. In Europe, major Indexes recovered from some of the virus-fueled selloff as traders searched for bargains. Traders were still tentative to recover all the losses as they will need to let the story play out a little more but the fact that the virus is not getting exponentially worse is a positive sign that it is being contained. The next few sessions will be the decider as to whether the recovery was buyers stepping back in or short-covering from the selloff.
A forecast by the non-partisan Congressional Budget Office overnight said that they expect the US economy will grow at a solid 2.2% this year but will also pressure the budget deficit to $1.015 Trillion. They expect that the economy will be on a good footing during the election year and that inflation will be noticed and will continue through to 2022. They expect that inflation will be supported by rising wages and consumer spending.
The USD spiked into the start of the US session only to be sold lower from the open. The move may be seen as a ‘blow-off’ prior to a change in trend lower but only time will tell. The EURO moved to test the 1.0990 as the USD spiked but then the buyers stepped in to push the Euro back up into the close of the US session. Lower highs are still pressuring the pair lower so buyers will need to make a break higher taking out a few minor resistance levels to change the tone. It will depend on whether the USD is going to head lower. The GBP also spiked lower to test recent lows on the dollar strength but then made back some of the losses into the close. The AUD managed to absorb most of the dollar strength as shares were on the move higher and the markets had a less negative tone to the China virus. We expect to see a potential short squeeze as sellers cover positions. The USDJPY was supported through the Asian session as safe haven YEN traders eased out of the action leaving the stronger USD to support the pair.
Gold started to come under pressure during the Asian session and the pressure continued to push prices lower through to the US close as safe haven buyers were squeezed out of the action. We may see some buyers hold their ground around the 1565 zone on the Spot price to build some support. Crude Oil also reversed the previous move lower but its not out of the woods yet. Buyers were happy to step in and sellers close out shorts as price started to hold above key major lows around the 51.50 zone. Talk of OPEC cutting output further to stem the selloff may bring in further buyers. Copper remained under pressure as traders assess the potential impact on the demand for the commodity due to the virus.
Cryptocurrencies continued to move higher with bitcoin pushing up above the 9000 mark to drag others along with it. Bitcoin is currently trading at $9073.9 up 1.86% while Ethereum is at $172.32 up 0.64% and Ripple is trading at $0.23681 up 1.58%.
The ASX200 was hammered on the open yesterday as the AUDUSD kept sliding lower and commodities came under pressure from fear that demand form China will ease. The move down was soaked up all day and may be overextended but only time will tell. The Energy, Mining and Resources sectors were the biggest drag on the action while Gold was stronger as expected. At the close the Index was down 96 points to 6994.5 with falling stocks outnumbering advancing ones by 976 to 297 and 277 ended unchanged.
The ASX200 is expected to open up around 40 points as the SPI200 was dragged higher by a bounce in the European and US markets.
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ECONOMIC DATA OUT TODAY (AEDT)
CNY Bank Holiday All Day
AUD CPI Data 11:30am
JPY Consumer Confidence 4pm
EUR German Import Prices 6pm
USD Goods Trade Balance and Prelim Wholesale Inventories 12:30am
USD Pending Home Sales 2am
USD Crude Oil Inventories 2:30am
USD FOMC Statement and Fed Funds Rate 6am
USD FOMC Press Conference 6:30am
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SPI200 INTRADAY LEVELS TO WATCH
