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OVERNIGHT MARKET SNAPSHOT FOR MONDAY 9/03/20
- SPI200 (Mar) overnight futures down 93 pts to 6113
- SP500 down 51.57 pts to 2972.37
- NASDAQ down 162.98 pts to 8575.62
- Dow Jones down 256.50 pts to 25,864.78
- FTSE100 down 242.88 pts to 6462.55
- DAX30 down 402.85 pts to 11,541.87
- GOLD futures (April Contract) up $4.40 to $1672.40 an ounce
- COPPER futures (Comex May) down $0.019 to $2.554 a pound
- OIL futures US Session (Nymex Apr) down $4.62 to $41.28 a barrel
- CRB Index down 6.52 pts to 155.85
- AUDUSD trading at 0.6636
- EURUSD trading at 1.1284
- GBPUSD trading at 1.3048
- USDJPY trading at 105.3900
- USD Index US Session (ICE March) down 0.730 to 96.060
US Indexes continued to come under pressure on the open on the back of virus fears with the negative tone overshadowing the release of better than expected employment numbers. The numbers came out up 273K with expectations for up only 175K while the unemployment rate dropped to 3.5% from 3.6%. The numbers show continued strength in the US labour market but are not showing any potential slowdown yet from the coronavirus. Traders have their focus on the corporate-debt markets as the spread of the coronavirus chokes off crucial sales and revenues to companies. Problems could accelerate if these companies find themselves unable to obtain funding in the coming weeks and months. Returns for corporate bonds have contracted over the past few months as downgrades have overtaken upgrades. The downgrades could soon translate into higher borrowing costs for companies looking to refinance maturing debt or for credit to dry up completely in extreme cases. Much of the concern now in credit will be centered around airline, travel and leisure, and retail sectors and also potentially heavily indebted oil and gas producers. The DOW ended down 0.98% while the broader SP500 was also down 1.71% and the Nasdaq ended down 1.87% for the session. In Europe, major stock Indexes were hit hard as coronavirus fears took hold. Oil and Gas stocks came under severe pressure as Oil prices fell.
The USD Index continued to fall coming under further selling pressure during the European session as US bond yields pushed to new lows. The EURUSD continued to benefit from the USD weakness and spiked through the 1.1240 zone on its way now to 1.1400. The move up has been savage giving no relief to Euro bears and we expect to see more of the same of the dollar continues to crumble. Bond yields are the key as they factor in further US rate cuts and may be overstretched at current levels. The GBPUSD also rallied hard being all one way traffic for the session as the dollar fell. The pair also gained after the EU’s chief Brexit negotiator said that a trade deal is still possible this year. The AUDUSD also managed to gain some traction as the USD fell although price has opened sharply lower today in risk off tone. If we see a push below the 0.6580 zone we expect to see some bears pile into the action. The USDJPY also gapped down hard today on the open of the FX markets to continue the push lower from Friday.
SPOT GOLD saw some choppy price action up around highs at 1688. Price pushed up to the zone through the European session before getting smacked down over $25 after the US employment data release. We then saw the bulls back out to push price higher into the close to retest the same level. It seems that there was some serious selling at the resistance zone and someone did not want to see a break higher. Crude Oil was hit hard as a three year pact between OPEC and Russia ended on Friday after Moscow refused to support deeper oil cuts to cope with the outbreak of coronavirus and OPEC responded by removing all limits on its own production. Prices dropped 10% as the news revived fears of a 2014 style crash when the pair were fighting for market share with US shale producers. Copper continues to have problems finding buyers as bears pressure price lower on Friday. Expect more of the same action this week as coronavirus fears cap gains on expectations for a lack of demand.
Cryptocurrencies were hit lower over the weekend to give up the gains made over the previous few days. Bitcoin is set to push lower and test potentially towards the 7700 zone which will lead other crypto pairs to follow suit. Bitcoin is currently trading at $8304.7 down 7.04% while Ethereum is at $212.70 down 12.21% and Ripple is at $0.21308 down 11.28%.
The ASX200 had another round session Friday as the index was smacked down another 179.50 points to 6216.20. Leading the charge lower were the Financials, IT and Consumer Discretionary sectors while Gold stocks did well. Falling stocks outnumbered advancing ones by 1016 to 236 and 249 ended unchanged.
The ASX200 is expected to open down another 90 points and could have been a lot more if the US did not bounce in the final minutes of the session.
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ECONOMIC DATA OUT TODAY (AEDT)
JPY Current Account and Final GDP Data 10:50am
EUR German Industrial Production and Trade Balance 6pm
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SPI200 INTRADAY LEVELS TO WATCH
