–
OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 28/02/20 (as at 8:15am AEDT)
- SPI200 (Mar) overnight futures down 164 pts to 6452
- SP500 down 137.91 pts to 2978.48
- NASDAQ down 414.29 pts to 8566.48
- Dow Jones down 1190.95 pts to 25,766.64
- FTSE100 down 246.07 pts to 6796.40
- DAX30 down 407.42 pts to 12,367.46
- GOLD futures (April Contract) down $1.70 to $1641.40 an ounce
- COPPER futures (Comex May) down $0.017 to $2.557 a pound
- OIL futures US Session (Nymex Apr) down $2.25 to $46.48 a barrel
- CRB Index down 3.16 pts to 163.12
- AUDUSD trading at 0.6582
- EURUSD trading at 1.0995
- GBPUSD trading at 1.2891
- USDJPY trading at 109.6700
- USD Index US Session (ICE March) down 0.540 to 98.398
US Indexes were again dragged lower by coronavirus fears as more buyers are squeezed out of the market. Data out in the US showed that the economy continued to grow at a moderate pace but all concerns are now on the fast spreading virus and traders are looking to the potential impact this will have on the worlds largest economy. The biggest support for global growth has been the US and if the brakes are suddenly put on growth, then expect a decent correction as companies continue to warn of weaker earnings. The move lower has broken records for the fastest correction ever showing how trigger happy the bulls are to lock away gains from the biggest bull market in recent history. The DOW closed down a massive 4.42% and the broader SP500 was also hit hard down 4.43% along with the Nasdaq which ended down 4.61% for the session. In Europe, major Indexes took another beating along with the US and Asian markets. Traders are still trying to ‘catch a falling knife’ which is fraught with danger as no-one yet knows the impact to the global economy and the spread of the virus is yet to be contained to start to make assessments.
The USD Index fell over again as the share market rout continues. There is a big problem now with many funds that have been selling volatility in search of yield and trading in less liquid and riskier assets as interest rates are at such low levels. This would mean that there are a lot of traders expecting the central banks will step in and cut rates to continue to support markets. The problem is that they may be out of ammunition. If this is the case then there may still be a lot of ‘unwinding’ of risk assets to play out. Generally in times of global share market weakness, such as the GFC, traders have flocked to the USD for safety and it seems that a lot are caught off guard by the dollar weakness (Click Here for Reuters Article). The EURUSD continued to benefit from the dollar weakness as sellers were continually squeezed out of the action. There may still be a lot of unwinding to come as short Euro bets are closed which cold lead to a further spike higher. The GBPUSD did not fair so well as price continued to come under pressure. Price is now trading down at key support around 1.2890 that if broken, could open the door to a big move lower. The AUDUSD managed to bounce back from the previous sessions sell off as the USD fell apart. The trend is still lower and we expect that to continue as buyers may step back into the USD off support in the short term. The USDJPY followed the dollars decline into support where buyers stepped in to soak up some selling pressure.
SPOT GOLD still did not see much of a reaction from the bulls as share markets continued to go into meltdown. We expect that price still has some work to do to build and hold support before a spike into highs. Crude Oil continued to be sold lower in line with share market weakness as expectations are that demand will continue to come under fire globally. Copper bulls are doing their best to hold price up off support as a spike lower was met with some strong buying pressure to lift price and make back all the losses plus a little more. If the share market selloff continues then it will be a tough job for the bulls to support price further as demand will wane.
Cryptocurrencies made back some of the previous sessions losses to keep the bulls happy as Bitcoin is currently trading at $8901.6 up 0.79%. Ethereum is at $233.83 up 1.69% while Ripple is performing better and is trading at $0.24328 up 3.93%.
The ASX200 started the session relatively flat yesterday but struggled to find buying support as investors remained wary of another potential news driven selloff. The index drifted lower all day and ended down 50.2 points to 6657.9. The IT and Energy sectors weighed most on the market while Gold and Healthcare went against the flow to end with gains. Falling stocks outnumbered advancing ones by 762 to 451 and 300 ended unchanged.
The ASX200 is expected to open down another 160 points as the overnight markets went into meltdown mode.
–
ECONOMIC DATA OUT TODAY (AEDT)
JPY CPI Data and Unemployment Rate 10:30am
JPY Prelim Industrial Production 10:50am
AUD Private Sector Credit 11:30am
EUR German Import Prices 6pm
EUR German Prelim CPI All Day
EUR German Unemployment Change 7:55pm
EUR Buba President Weidmann Speaks 9pm
CAD GDP Data 12:30am
USD PCE Price Index, Personal Spending and Goods Trade Balance 12:30am
USD Wholesale Inventories 12:30am
USD Chicago PMI 1:45pm
CNY Manufacturing PMI Data 12pm Sat
–
SPI200 INTRADAY LEVELS TO WATCH
