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OVERNIGHT MARKET SNAPSHOT FOR MONDAY 18/05/20
- SPI200 (Jun) overnight futures up 32 pts to 5436
- SP500 up 11.20 pts to 2863.70
- NASDAQ up 70.84 pts to 9014.56
- Dow Jones up 60.08 pts to 23,685.42
- FTSE100 up 58.23 pts to 5799.77
- DAX30 up 128.15 pts to 10,465.17
- GOLD futures (June Contract) up $15.40 to $1756.30 an ounce
- COPPER futures (Comex July) down $0.014 to $2.332 a pound
- OIL futures US Session (Nymex June) up $1.87 to $29.43 a barrel
- CRB Index up 1.62 pts to 124.75
- AUDUSD trading at 0.6413
- EURUSD trading at 1.0820
- GBPUSD trading at 1.2116
- USDJPY trading at 107.0600
- USD Index US Session (ICE June) down 0.109 to 100.398
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Traders again brushed aside negative news as US Indexes drove higher after the open to end the session with minor gains into the weekend. US Retails sales figures came in a lot less than expected which strangely sent the markets higher…this shows the dependence on and expectations for further stimulus. We expect to see retail sales bounce back to some extent as a lot of pent up demand will come back in May in the form of stimulus payments if confidence comes back and people are willing to get back to the norm. A lot depends on coming out of lockdown and how fast the global economy can get back on its feet. There will be some pain for companies along the way and many will not survive, as we have seen with JC Penny, if lockdowns stay in place for a lot longer or if there is a second wave that shatters peoples confidence which will ultimately put further pressure on companies and trigger more bankruptcies. Powell expects that a full economic recovery will depend on a vaccine and sees a steady recovery over the second half of the year…assuming there is not a second wave of the virus which we see as nearly unavoidable. The question may become whether health systems have had enough time to build up support to fight off a second wave. The DOW finished up 0.25% while the broader SP500 was up 0.39% and the Nasdaq also ended up 0.79% for the session. In Europe, major Indexes were tentative although ended with gains as investors remain cautious as tensions between the US and China increase. The index was supported by data that showed China’s industrial production climbed by a faster than expected 3.9% in April. We expect to see major indexes swing between gains and losses as traders await to see what transpires with coronavirus cases out of lockdown.
Temporary layoff schemes to help support the unemployed can not last forever. In Britain the cost for 7.5 Million workers is 8 billion pounds a month which the British finance minister has warned is unsustainable. Read more here.
The USD Index was initially hit lower after retail sales figures were released but then bounced straight back to continue to trade around recent highs. Buyers are still soaking up selling pressure as price remains in a slight uptrend. The EURUSD was choppy along with the Dollar but is holding up off support around the 1.0765 zone. There is still pressure on the pair which would suggest higher prices for the USD and fear for another downturn in share markets. The GBPUSD was hit lower as there was no love from buyers. Price fell through support which now opens the action up for much lower prices. The AUDUSD was was also weak with short term resistance now coming in around 0.6573. We expect to see pressure down to 0.6380 lows if resistance holds. The USDJPY also moved up off lows after the retails sales data release. Support is now around 106.765 which may tempt buyers into the action for a run up to 108.050 resistance.
SPOT GOLD continued with the rally the previous session adding to the gains as price hovers around highs from 15th April. Crude Oil again edged higher on the back of signs that demand from China is picking up and as countries come out of lockdown which will add to the increase in demand and eat away at the current oversupply. Copper had a rough European session to move sharply lower but managed to hold up off the lows during the US session. Expect to see support build as countries come out of lockdown and naturally soak up supplies.
Cryptocurrencies lifted over the weekend to generally push up to retest thursdays highs. Bitcoin is currently trading at $9665.2 up 2.69% while Ethereum is at $206.58 up 2.48% and Ripple is at $0.20117 up 0.51%.
The ASX200 finished the week on a positive note the hold the gains from the open into the close. The index ended up 76.1 points to 5404.8 with 20 points made in the match after 4pm. The Gold Sector charged higher ending up 4.95% while Metals and Mining, Resources and materials all ended up over 3% for the session. The index remains caught between bullish and bearish action as the daily swings show. Rising stocks outnumbered declining ones by 737 to 434 and 368 ended unchanged.
The ASX200 is expected to open up 35 points as the SPI200 ended the US session up at resistance and is ready to continue the charge higher.
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ECONOMIC DATA OUT TODAY (AEDT)
JPY Prelim GDP 9:50am
GBP CB Leading Index 11:30pm
GBP MPC Member Tenreyro Speaks 1am
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SPI200 INTRADAY LEVELS TO WATCH
