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OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 16/07/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures up 22 pts to 6053
- SP500 up 29.04 pts to 3226.56
- NASDAQ up 61.92 pts to 10550.49
- Dow Jones up 227.51 pts to 26,870.10
- FTSE100 up 112.90 pts to 6292.65
- DAX30 up 233.62 pts to 12,930.98
- GOLD futures US session (Aug) down $0.50 to $1812.90 an ounce
- COPPER futures (Comex Sept) down $0.0383 to $2.8942 a pound
- OIL futures US Session (Nymex Aug) up $0.70 to $40.99 a barrel
- CRB Index up 1.23 pts to 141.22
- AUDUSD trading at 0.7007
- EURUSD trading at 1.1411
- GBPUSD trading at 1.2587
- USDJPY trading at 106.9400
- USD Index US Session (ICE Sept) down 0.212 to 95.995
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US indexes backed up the previous session with another strong showing as bulls continued the march higher. The positive sentiment and risk on tone was supported by the hopes of a vaccine after Moderna Inc showed its experimental vaccine produced high levels of virus-killing antibodies. Goldman Sachs rallied after saying that its trading revenue doubled in the second quarter…no real surprise considering the volatility. This led to gains in Morgan Stanley and Bank of America, yet to report, to support the financial sector. Travel related stocks surged on hopes that the vaccine is this time legit and will get global economies back on their feet and jump start tourism again. Trump has ruled out further sanctions on top Chinese officials for now as he does not want to further escalate tensions with China…probably just content with the natural support into share markets so no need to rock the boat. The DOW closed up 0.85% and the broader SP500 was up 0.91% while the Nasdaq also ended up 0.59% for the session. In Europe, major Indexes were also buoyed by vaccine hopes which led to a ally in travel stocks. The increased optimism into a vaccine has triggered the risk on tone as buyers continue to be supported by stimulus hopes. On the flip side, the second wave outbreak continues and puts many countries back into lockdown which will dampen the recovery.
The USD Index fell as sellers piled in and safe haven buyers were squeezed out of the action although price did bounce off support during the US session. Risk sentiment soared into share markets on vaccine hopes which weighed on the dollar. Any negative sentiment continues to be brushed aside with bulls out in force. Commodity currencies strengthened putting more pressure on the USD. The EURUSD continued the march higher on the dollar selloff. Price rallied through major highs at 1.1420 and has it sites on 1.1500 if the dollar depreciation can continue. The GBPUSD was quick to give up gains made in the European session once the USD bounced off support. The rejection of the highs does not bode well for Pound bulls so we expect to see a lower high hold and a squeeze lower to test towards the 1.2500 area. The AUDUSD did well through the Asian and European sessions but did come under a little pressure during US trade. The commodity currency did well on the back of the dollar fall so we are watching to see how price reacts around the 0.7000 zone to see if buyers are happy to continue to provide support. The USDJPY reacted well off the 106.650 zone for a second time showing buyers are happy to step in around the level. Watching to see if the level will hold and a higher low will build for the short squeeze.
SPOT GOLD held below resistance as bulls were looking for further weakness into the USD. If the dollar holds above support then we expect to see a squeeze into gold into the near term although there is a lot of longer term bullish sentiment for the precious metal. Crude Oil lifted above the $40 mark on the risk on tone into the share market. As long as Indexes continue to rally, then oil will continue to find support on expectations for an increase in demand although further lockdowns should weigh on price. Copper came under pressure as more buyers started to lock in some gains after price extended into highs. We expect to see another wave lower and then will be watching to see if buyers again think price is cheap enough to enter the action.
Cryptocurrencies came under some pressure for most of the Asian session through to the US close. Bitcoin is pushing back down into support zones and is currently trading at $9210.8 down 0.63% while Ethereum is at $238.3 down 1.30% and Ripple is trading at $0.19793 down 0.66%.
The ASX200 had another big day yesterday as bulls ramped prices higher. The index opened strong and never looked back to close the session up 111.8 points to 6052.9. All sectors ended in the green with IT leading the charge with Metals and Mining and Materials not far behind. Rising stocks outnumbered declining ones by 846 to 385 and 311 ended unchanged.
The ASX200 is expected to open up 20/25 points but the action may be muted into employment data at 11:30am. The bulls remain in charge until we see a key lower high hold.
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ECONOMIC DATA OUT TODAY (AEST)
NZD CPI Data 8:45am
AUD Employment Change and Unemployment Rate 11:30am
CNY GDP, Industrial Production and Retail Sales 12pm
GBP Claimant Count Change and Unemployment Rate 4pm
GBP BOE Credit Conditions Survey 6:30pm
EUR Monetary Policy Statement and Main Refinancing Rate 9:45pm
EUR ECB Press Conference 10:30pm
USD Retail Sales Data and Unemployment Claims 10:30pm
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SPI200 INTRADAY LEVELS TO WATCH
