–
OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 6/05/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures down 11 pts to 5405
- SP500 up 25.70 pts to 2868.44
- NASDAQ up 98.41 pts to 8809.12
- Dow Jones up 133.33 pts to 23,883.09
- FTSE100 up 95.64 pts to 5849.42
- DAX30 up 262.66 pts to 10,729.46
- GOLD futures (June Contract) up $0.80 to $1714.10 an ounce
- COPPER futures (Comex July) up $0.021 to $2.333 a pound
- OIL futures US Session (Nymex June) up $4.89 to $25.28 a barrel
- CRB Index up 5.12 pts to 123.64
- AUDUSD trading at 0.6437
- EURUSD trading at 1.0842
- GBPUSD trading at 1.2440
- USDJPY trading at 106.5700
- USD Index US Session (ICE June) up 0.306 to 99.873
–
US Indexes brushed aside negative economic data to end the session with modest gains. Buyers started the day on the front foot and kept the pressure on through the session until the last hour when sellers piled in and pushed the DOW down 250 points into the close. A jump in Oil prices helped to support buyer sentiment after outweighing data which showed that the US trade deficit increased by the most in more than a year as a record drop in exports offset a shrinking import bill. Lockdowns have disrupted supply chains and hit demand for goods and services. Traders remain hopeful that as parts of the country start to reopen, the economy can get back on its feet although fears for a second wave of infections remain which will hit the economy again. Key employment data out in the US Friday will be the focus for traders in the short term. The DOW finished up 0.56% while the broader SP500 was also up 0.90% and the Nasdaq up 1.13% for the session. In Europe, major Indexes took their lead from Asia and moved higher from the open being buoyed by energy stocks and hopes that the re-opening will bring an end to all the problems.
The USD Index continued to move up and we expect the move to push through 100.00 in the near term. The disconnect between equities and economics continues as typically a rally in shares leads to a move lower in the Dollar. As there remains little alternatives for investment with yields so low, the dollar is seeing flows associated with share buying as US bonds still have better returns than other countries. We do expect that there is a safe haven nature to the buying on expectations that share Indexes will retest the lows. The EURUSD continued to be pressured lower on the back of gains into the USD. If price holds the lower high at 1.0858 then expect to see a test down to 1.0763. The GBPUSD also fell being pressured by the Dollar although the trend up is still holding. If price breaks below 1.2418 then expect a sharp move down. The AUDUSD is starting to look heavy and showing signs of price falling which may be inline with coming pressure in the share markets. Watching for a break below 0.6415. The USDJPY continues to be pressured lower even as the USD rallies. A break below 106.30 will open up another leg down.
SPOT GOLD saw some choppy trade action as price was pushed lower during the European session before gaining back some lost ground once the US opened. We expect to see price capped around the 1715. Crude Oil marched higher as traders expect demand to pick up as countries start or plan to re-open. The rally helped to lift confidence that we are seeing a return to the norm although we still believe that the massive inventory stockpiles to get through will take some time to eat away at and therefore cap the action. We will need to see a ‘normal’ futures rollover in a few weeks to be convinced that we have seen the worst of the action. Copper saw some buyers step into the fray as sentiment lifted along with the Oil rally. We see price supported in the short term around 2.2830 and a break of 2.3400 will lead to higher prices and a retest of recent highs around 2.4000.
Cryptocurrencies had another uneventful session with prices mixed across the board. Bitcoin is currently trading at $8943.0 up 0.11% while Ethereum is at $205.35 down 1.46% and Ripple is at $0.21727 down 0.78%.
The ASX200 rallied from the open yesterday to follow on from the previous sessions strength and end up 87.3 points to 5407.1. Buyers were happy to soak up any dips as all sectors ended in the green. Energy performed the best ending up 4.17% while coming in second were Resources followed by the Gold sector. Rising stocks outnumbered declining one by 744 to 447 and 327 ended unchanged.
The ASX200 is expected to open flat as the SPI200 held onto the days gains overnight although buyers starting to run out of steam.
–
ECONOMIC DATA OUT TODAY (AEDT)
NZD Employment Change and Unemployment Rate 8:45am
JPY Bank Holiday ALl Day
AUD Retail Sales 11:30am
EUR German Factory Orders 4pm
EUR Final Services PMI 6pm
EUR Retail Sales 7pm
EUR EU Economic Forecasts Tentative
USD ADP Non-Farm Employment Change 10:15pm
USD Crude Oil Inventories 12:30am
–
SPI200 INTRADAY LEVELS TO WATCH
