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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 22/04/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures down 109 pts to 5090
- SP500 down 86.60 pts to 2736.56
- NASDAQ down 297.50 pts to 8263.23
- Dow Jones down 631.56 pts to 23,018.88
- FTSE100 down 171.80 pts to 5641.03
- DAX30 down 426.05 pts to 10,249.85
- GOLD futures (June Contract) down $9.00 to $1702.20 an ounce
- COPPER futures (Comex July) down $0.072 to $2.248 a pound
- OIL futures US Session (Nymex June) down $7.31 to $13.12 a barrel
- CRB Index down 12.47 pts to 106.29
- AUDUSD trading at 0.6282
- EURUSD trading at 1.0857
- GBPUSD trading at 1.2297
- USDJPY trading at 107.7100
- USD Index US Session (ICE June) up 0.297 to 100.355
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US Indexes were again hit hard as panic drove oil markets lower. Oil prices kept sliding overnight with the June futures contract now the target for traders frustration. The fear spread to the share market and dragged the commodity complex lower as buyers locked away recent gains while the panic drove Bond yields lower as traders rushed for the safe haven. It seems that investors are finally coming to terms with the enormous difficulty that the government is facing in restarting the economy without triggering another outbreak of the coronavirus to overwhelm an already battered healthcare system. We have been saying for a while that the only real fix will be a vaccine which from most accounts is still a while away. The DOW finished down another 2.67% while the broader SP500 was down 3.07% and the Nasdaq down 3.48% for the session. In Europe, stock Indexes also came under fire as bulls retreated from the action. The move down started in the Asian session and flowed over to European trade. Investors may be coming to terms with and feeling more comfortable about the curve flattening but they are also seeing the economic realities of the lockdown and the damage the virus has caused.
Traders ignored the news that the US is adding another $500 billion bailout for small business which will take the total aid package to about $3 trillion.
The USD Index moved higher finding safe haven buying support as traders were in search of assets to provide support away from the selling into the share market. We expect to see further appreciation into the worlds most liquid currency if traders remain risk adverse and steer clear of the share market. The EURUSD had another choppy session as the USD rallied. Price came under pressure but did find some buyers off key support at 1.0827. The question is now whether buyers are happy to step in at higher levels to support the currency pair. The GBPUSD basically took a nosedive as oil and other commodities came under pressure. Buyers may be now looking to the 1.2190 zone for support. The AUDUSD also continued to come under pressure as commodities struggle and the USD rallies. If buyers can push price back up through 0.6310 then we may see a leg higher but we are leaning towards lower prices as the oil rout continues and pressures other commodities. The USDJPY did move lower under the weight of sellers early in the Asian session and into European trade before bouncing back in the US session. The pair is still battling between USD appreciation and buying from safe haven YEN traders.
SPOT GOLD was hit lower during the European session but managed to fight back up off the lows through US trade to minimize the losses. The commodity did not provide much safe haven support and is still susceptible to a general risk off tone from traders as they sell gold to cover other losses. Price is however showing more positive signs as price action looks like it is starting to build a base for buyers….only time will tell. Crude Oil prices were again hammered, now in the June contract, as traders continued to be concerned with the increasing supply and lack of demand. The US is again looking at adding Oil to its strategic reserves to soak up some of the oversupply but the market will only get back on its feet when the world comes out of lockdown. The weak prices will trigger some companies to halt production which will take a while to ramp back up so it is not a decision taken lightly. The move lower is more a factor of panic than a long term change in sentiment as traders are anticipating negative figures for June when it has to roll to the July contract. Copper was also hit hard to spike lower to squeeze out a lot of buyers. Price did bounce back from the lows although not enough to wipe off the losses. The question now is whether price can start to generate some buying interest down at low levels to build some support. This may be a hard task if share markets continue to move lower.
Cryptocurrencies were flat for the session to weather the selloff into the share markets. The support in cryptos may be a sign of some strength to come. Bitcoin is trading at $6872.7 up 0.37% while Ethereum is at $171.90 up 0.22% and Ripple is trading at $0.18416 up 1.58%.
The ASX200 initially held up okay yesterday but then the selling pressure pushed prices lower and did not let up until the close. The index followed on from the previous day to end down another 131.7 points to 5221.3. Gold was the only sector that ended the day with some gains up 1.92% while IT led the charge lower down 4.88%. Falling stocks outnumbered advancing ones by 995 to 288 and 252 ended unchanged.
The ASX200 is expected to open down 105 points as the SPI200 continued lower along with the US markets.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD MI Leading Index 10:30am
AUD Retail Sales 11:30am
GBP CPI and PPI Data 4pm
CAD CPI Data 10:30pm
EUR Consumer Confidence 12am
USD Crude Oil Inventories 12:30am
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SPI200 INTRADAY LEVELS TO WATCH
