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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 16/06/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures up 141 pts to 5876
- SP500 up 25.28 pts to 3066.59
- NASDAQ up 137.21 pts to 9726.02
- Dow Jones up 157.62 pts to 25,736.16
- FTSE100 down 40.48 pts to 6064.70
- DAX30 down 37.93 pts to 11,911.35
- GOLD futures (Aug Contract) down $5.50 to $1731.80 an ounce
- COPPER futures (Comex Sept) down $0.014 to $2.586 a pound
- OIL futures US Session (Nymex July) up $0.81 to $37.07 a barrel
- CRB Index up 0.46 pts to 134.78
- AUDUSD trading at 0.6917
- EURUSD trading at 1.1324
- GBPUSD trading at 1.2599
- USDJPY trading at 107.3800
- USD Index US Session (ICE Sept) down 0.715 to 96.615
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The US bounced back from a massive selloff in the Asian session to end up for the day. In hindsight the move lower in the US overnight futures Indexes looked a lot like a setup for the European and US opens to clean out buyers before the run higher. US DOW futures were down into the US open and then it was a one way street up of 900 points. Buyers were supported by further Fed Stimulus after the US Fed Reserve announced that they would buy individual corporate bonds in the secondary market. This triggered the risk on move and selloff into safe havens and brushed aside concern for a second wave of coronavirus infections after new cases emerge in China and the US…and other countries. The move by the Fed has backstopped the bond market and will keep a tighter lid on interest rates therefore essentially fueling the risk on sentiment into shares. One sector that is a big winner is Banks as they have a bunch of corporate debt on their balance sheets and now there’s a buyer for it. The DOW closed up 0.62% while the broader SP500 was up 0.83% and the Nasdaq ended up 1.43% for the session. In Europe, major Indexes were under pressure due to virus fears although they did miss the move up in the US so we expect them to play catchup to the US rally as the DAX rallied over 200 points during the US session.
The USD Index came under selling pressure after the US Fed reserves stimulus announcement. Price gave up a lot of recent gains as safe havens were sold lower and traders went risk on into share markets. The EURUSD found buyers stepping back into the action to lift price after the USD fell. Price may see some minor selling pressure around 1.1340 although we expect to see further downside on the USD to bouy the Euro as the Fed supports the action. The GBPUSD also found buyers on the USD weakness. Price has broken out of the recent downtrend and is on the way up. Minor resistance may see some sellers at 1.2650 although, like the Euro, do not expect sellers to fight the Fed. The AUDUSD fought back from the recent selloff and bounced back strong as traders were again risk on into share markets. The move up is extended but expect that any pullback will be met with further buying pressure. The USDJPY was essentially flat after the news as safe haven YEN selling muted any weakness in the USD. Technically, price action looks set for a short squeeze and run higher if buyers can push up through 107.500.
SPOT GOLD was coming under pressure from sellers until the USD turned south and supported the precious metal. Even as safe havens were sold lower, Gold managed to hold its ground and bounce back from the earlier selloff. Crude Oil initially came under selling pressure to move lower but then turned sharply to clean out any bears and lift up through the 36.76 resistance level. The risk on sentiment and the Feds corporate backstop will be a positive for oil and support demand out of lockdown. Copper like all markets, was under pressure early before the change in tone brought in buyers to lift price and make back some of the lost ground. If we see buyers start to build a higher low, then expect to see copper resume the uptrend.
Cryptocurrencies recovered from an early selloff through Asian trade to end relatively unchanged. Bitcoin is currently trading at $9485.6 up 1.07% while Ethereum is at $232.90 down 0.10% and Ripple is at $0.19303 up 0.81%.
The ASX200 found some weakness on the open yesterday and continued to push lower all day as the DOW and Asian markets came under fire. At the close the index was down 128 points to 5719.8. All sectors were lower ending in the red with Energy and Consumer Discretionary leading the charge. Falling stocks outnumbered advancing ones by 909 to 334 and 319 ended unchanged.
The ASX200 is expected to open up 140 points after the SPI200 rallied hard with the bounce in European and US indexes.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD Monetary Policy Meeting Minutes 11:30am
JPY Monetary Policy Statement Tentative
EUR German Final CPI 4pm
GBP Claimant Count Change and Unemployment Rate 4pm
EUR ZEW Economic Sentiment 7pm
USD Fed Chair Powell Testifies 12am
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SPI200 INTRADAY LEVELS TO WATCH
