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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 13/05/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures down 68 pts to 5320
- SP500 down 60.20 pts to 2870.12
- NASDAQ down 189.79 pts to 9002.55
- Dow Jones down 457.21 pts to 23,764.78
- FTSE100 up 55.04 pts to 5994.77
- DAX30 down 5.49 pts to 10,819.50
- GOLD futures (June Contract) up $7.50 to $1705.50 an ounce
- COPPER futures (Comex July) down $0.046 to $2.334 a pound
- OIL futures US Session (Nymex June) up $1.20 to $25.34 a barrel
- CRB Index down 0.05 pts to 122.63
- AUDUSD trading at 0.6473
- EURUSD trading at 1.0848
- GBPUSD trading at 1.2265
- USDJPY trading at 107.1400
- USD Index US Session (ICE June) down 0.233 to 100.037
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A spike lower into the close saw US Indexes end down and buyers lock in some gains expecting the worst. The sharp selling came after data out on the US budget deficit triggered some profit taking for already nervous investors. The deficit in April was the first to reflect the excessive amount of government spending and eclipsed the previous record for monthly data. Traders were already on the back foot following a warning from the top US infectious disease expert that premature moves to reopen the nation’s economy could lead to further outbreaks and set back economic recovery. He told congress that the virus was not yet under control and there would not be a vaccine until late August or early September. This is not really the narrative that Washington wants out in the public as they look to slowly reopen. It is all now about science versus the Fed Reserve…if outbreaks trigger another selloff, will the Fed add more stimulus for the stock market junkies. Traders will be focused on Fed Chair Powells speech tonight on the current economic issues and future monetary policy. The DOW finished down 1.89% while the broader SP500 was down 2.05% and the Nasdaq also ended down 2.06% for the session. In Europe, major Indexes generally finished flat to higher but they did not see the 300 point selloff into the DOW in the final hours of trading. We expect that they will open down when tonights session begins. Defensive stocks were the main interest for buyers as they weighed up the risks of lifting lockdowns.
Traders have been concerned with the volatility index as it pushed down to lows. Generally speaking, a low VIX (volatility Index) means complacency in times like now after a bounce from a major selloff. The VIX spiked overnight which may trigger some sellers into action.
The USD Index was heading lower until the stock market took a turn for the worst into the close. The dollar found support to make back some of the losses on safe haven buying and as bonds edged higher. The EURUSD was doing well as buyers moved price up off support 1.0775 through the Asian and European sessions. Price then fell as buyers stepped into the USD ahead of the US budget balance data. The GBPUSD was moving higher with little conviction until the USD found buyers and rallied. The Pound then spiked lower through previous lows on its way to support around 1.2210. We will be watching to see how buyers react at the support zone as there will be the potential for a short squeeze. The AUDUSD saw some pressure from sellers as the US started to move lower and also after trade issues between Australia and China gave some concern to bulls after China banned some Australian meat imports. The was later played down by the Aussies trade minister as a technicality. The USDJPY edged lower as the YEN soaked up sellers to pressure the currency pair down even as the Dollar rallied.
SPOT GOLD moved higher but lacked any conviction and remains stuck in a major contractive pattern between lower highs and higher lows. Price is still reacting to USD moves and we expect to see a move lower if safe haven dollar buying spikes. Crude Oil was initially supported by the dollar weakness to rally to recent highs before giving up some gains into the close. Price is still holding minor higher levels and will be focused on inventory data out tonight which we expect to trigger some volatility. Copper fortunes continue to be linked to share markets as price tumbled once the US started heading lower. A correction lower is in place now with major support to come in around 2.2880 so watching buyers reaction into the zone.
Cryptocurrencies had a good session considering the pressure into the share markets. Bitcoin is currently trading at $8813.2 up 2.08% while Ethereum is at $189.49 up 2.17% and Ripple is at $0.19755 up 2.98%.
The ASX200 yesterday basically mirrored the previous sessions action and moved lower from the open and then rallied slightly into the close. In the end the index was down 58.2 points to 5403 with the Consumer Staples sector the only one managing to end higher. The biggest drag on the index was in Energy, Resources and Metals and Mining. Falling stocks outnumbered advancing ones by 748 to 430 and 355 ended unchanged.
The ASX200 is expected to open down 55 points as the US gets hit into the close to drag the SPI200 down through support.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD Westpac Consumer Sentiment 10:30am
AUD Wage Price Index 11:30am
NZD Cash Rate and RBNZ Rate Statement 12pm
NZD RBNZ Press Conference 1pm
GBP GDP Data, Goods Trade Balance and Manufacturing Production 4pm
EUR Industrial Production 4pm
USD PPI Data 10:30pm
USD Fed Chair Powell Speaks 11pm
USD Crude Oil Inventories 12:30am
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SPI200 INTRADAY LEVELS TO WATCH
