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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 6/03/20 (as at 8:15am AEDT)
- SPI200 (Mar) overnight futures down 136 pts to 6271
- SP500 down 106.64 pts to 3023.48
- NASDAQ down 279.49 pts to 8738.59
- Dow Jones down 969.58 pts to 26,121.28
- FTSE100 down 110.16 pts to 6705.43
- DAX30 down 182.97 pts to 11,944.72
- GOLD futures (April Contract) up $30.70 to $1673.70 an ounce
- COPPER futures (Comex May) down $0.019 to $2.567 a pound
- OIL futures US Session (Nymex Apr) down $0.83 to $45.95 a barrel
- CRB Index down 2.30 pts to 162.37
- AUDUSD trading at 0.6605
- EURUSD trading at 1.1233
- GBPUSD trading at 1.2961
- USDJPY trading at 106.0800
- USD Index US Session (ICE March) down 0.725 to 96.582
US Indexes were again beaten down to take the shine out of the recent rally as the bulls ran for cover. Travel and leisure stocks came under fire as coronavirus linked shares were targeted by investors. The economic impact of the virus and the resultant downturn remains to be the main concern on traders minds making it hard to dive back into the action longer term. Traders are unable to model any potential outcome as there are too many unknowns and there are no fundamentals to peg an analysis on. Traders are expecting to see further volatility until economic data starts to flow out of China along with the EU and US to show the impact that traders will have to deal with. Until then both buyers and sellers will fight it out to attempt to factor in the uncertain future. US unemployment data out did show that the labour market is on a solid footing although any dramatic change in the numbers will be delayed. The DOW ended down 3.58% while the broader SP500 was also down 3.41% and the Nasdaq ended down 3.10% for the session. In Europe, major stock Indexes were again under pressure and will have some catchup to do with the US markets as the DOW was down another 500 points from the time the FTSE and DAX closed. The mining sector led the charge lower on virus concerns while Brexit continues to weigh on the market as the EU says the UK is trying to undermine negotiations by talking to individual member states.
The USD Index was initially trading sideways through Asian trade before turning south to put recent buyers under pressure during European trade and accelerated lower into the US close. Traders were also betting that there will be further rate cuts to come from the US Fed Reserve. The EURUSD benefited from the dollar weakness again and rallied higher within striking distance of the 1.1240 resistance level. We will be watching for a potential spike through and then some profit taking by the bulls although this will depend on whether the stock market rout continues in the near term without a bounce. The GBPUSD also rallied hard on the back of dollar weakness and on waning expectations for a BOE rate cut after BoE governor Andrew Bailey said the central bank should wait until it has more clarity about the economic hit from the outbreak. The AUDUSD came under pressure as share markets headed south with the main concern being for the impact to China. Traders are also potentially factoring in further cuts from the RBA as global central banks apply co-ordinated stimulus. The USDJPY fell like a stone on dollar strength and YEN safe haven buying.
SPOT GOLD spiked hard with bulls coming out of the gate charging once the USD started to tank. It seems that traders are expecting a lot more volatility to come and lower prices in the major share indexes and looking to gold for a traditional safe haven. Crude Oil also came under pressure even after OPEC agreed to deeper production cuts to attempt to support prices. Copper also came under pressure but only after a rally through the Asian session. Price retested minor highs at 2.6000 before heading south although bulls continued to soak up the spikes from sellers into key support.
Cryptocurrencies were buoyed in European and US trade to finally find some safe haven action. Bitcoin is currently trading at $9126.0 up 4.25% while Ethereum is trading at $232.12 up 4.17% and Ripple is at $0.24126 up 3.67%.
The ASX200 got off to a good start yesterday but then gave back a lot of the gains into the close as Asian markets struggled and the US overnight session moved lower. The Aussie Trade Balance came out better than expected which took some heat out of the rally on expectations that there may not be any need for another rate cut from the RBA. In the end the index ended up 70.3 points to 6395.7 with all sectors ending in the green. Rising stocks outnumbered declining ones by 754 to 454 and 307 ended unchanged.
The ASX200 is expected to open down 140 points after another overnight beating in the US markets.
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ECONOMIC DATA OUT TODAY (AEDT)
USD FOMC Member Kaplan Speaks 10:30am
AUD Retail Sales 11:30am
EUR German Factory Orders 6pm
CAD Employment Change, Trade Balance and Unemployment Rate 12:30am
USD Non-Farm Employment Change and Unemployment Rate 12:30am
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SPI200 INTRADAY LEVELS TO WATCH
