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OVERNIGHT MARKET SNAPSHOT FOR MONDAY 2/03/20
- SPI200 (Mar) overnight futures down 40 pts to 6334
- SP500 down 24.54 pts to 2954.22
- NASDAQ up 0.89 pts to 8567.37
- Dow Jones down 357.28 pts to 25,409.36
- FTSE100 down 215.79 pts to 6580.61
- DAX30 down 477.11 pts to 11,890.35
- GOLD futures (April Contract) down $75.80 to $1566.70 an ounce
- COPPER futures (Comex May) down $0.028 to $2.544 a pound
- OIL futures US Session (Nymex Apr) down $2.33 to $44.76 a barrel
- CRB Index down 3.67 pts to 159.45
- AUDUSD trading at 0.6515
- EURUSD trading at 1.1026
- GBPUSD trading at 1.2823
- USDJPY trading at 107.8900
- USD Index US Session (ICE March) down 0.401 to 98.060
US Indexes were mixed as all opened weaker although the Nasdaq managed to make back the losses into the close. The DOW was the weakest of the three as buyers struggled to defend the days lows. Traders will be looking to Central Banks to come to the rescue but many believe that the banks tools will not be enough if the selling accelerates. A US rate cut in March or even sooner will be the minimum expectation from investors but will it be enough to soothe the nerves. Many have expected a correction but it is interesting how many would not have been prepared for the sudden savage pullback in global markets. The DOW closed down 1.39% and the broader SP500 was also down 0.82% while the Nasdaq ended up 0.01% for the session. In Europe, major Indexes were again hit hard to follow in the foot steps of the Asian session as fears dominate the action and traders continue the selling frenzy. The World Health Organization (WHO) warned that the virus had pandemic potential, and ratings agency Moody’s said it would trigger a global recession in the first half of the year. European traders ramped up expectations for a rate cut as soon as June although the ECB said that they do not need to take immediate action.
The USD Index again came under pressure during the US session after buyers tried in vane to push the dollar higher during European trade. If share market pressure resumes this week, we expect to see the dollar continue to be under pressure as traders repatriate funds away from the USD and also factor in rate cuts from the US Fed Reserve. The EURUSD continued to trade inversely to the USD as buyers pushed price up to close on its highs. The next resistance level is up around the 1.1100 zone then up to 1.1240. The GBPUSD headed south and found no support from the weaker USD. Price spiked through 1.2770 support but managed to close above the level. The Pound is still digesting Brexit at a time when global markets are in meltdown so traders are expecting the worst. The AUDUSD traded lower although found some support from the USD weakness. Price is now down at major lows made around the GFC which may give some comfort to buyers if price can manage to find support. The USDJPY moved lower as safe haven traders jumped into the YEN.
SPOT GOLD was hammered as price broke down through support around the 1620 zone. The move has obviously caught a lot of Gold bulls off guard as they expect to see gold find safe haven support as shares fall over globally. The same situation happened through the GFC as Gold unexpectedly gave up gains before really getting a major bull run underway. Many are still attributing the sell off to margin calls as traders close winning gold positions to free up cash. Crude Oil trading was all one way and that was lower. Price recently broke below key support and has quickly pushed down towards another support level around 42.00. We expect that this zone should bring in some buying pressure for a squeeze higher. Copper was choppy around support as bulls try to hold price from capitulating. The pressure is still down and will continue to be as long as traders see demand issues globally for the metal.
Cryptocurrencies continued to come under pressure and look set to break down further as sellers hold lower levels. Bitcoin is currently trading at $8492.4 down 1.93% while Ethereum is at $214.61 down 4.65% and Ripple is at $0.22592 down 3.77%.
The ASX200 had is biggest fall yet off the all time highs as the index was hammered from the open Friday as the carnage continued. At the close the ASX200 was down 216.7 points to 6441.2. The Gold sector was smacked down 9.15% and we expect the woes to continue today after Spot Golds beating Friday night. The Metals and Mining sector was down 5.27% while Resources and IT were also hit hard. Falling stocks outnumbered advancing ones by 1289 to 149 and 209 ended unchanged.
The ASX200 is expected to open down 40 points from Saturday mornings close although the open could be a lot lower after weak Chinese Manufacturing data Saturday and an increased death toll outside of China.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD MI Inflation Gauge 11am
AUD Company Operating Profit and ANZ Job Adverts 11:30am
CNY Caixin Manufacturing PMI 12:45pm
AUD Commodity Prices 4:30pm
EUR German Final Manufacturing PMI 7:55pm
EUR Final Manufacturing PMI 8pm
GBP Final Manufacturing PMI 8:30pm
USD ISM Manufacturing PMI 2am
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SPI200 INTRADAY LEVELS TO WATCH
