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OVERNIGHT MARKET SNAPSHOT FOR MONDAY 20/07/20
- SPI200 (Sept) overnight futures up 2 pts to 6004
- SP500 up 9.16 pts to 3224.73
- NASDAQ up 29.36 pts to 10,503.19
- Dow Jones down 62.76 pts to 26,671.95
- FTSE100 up 36.61 pts to 6290.30
- DAX30 up 44.64 pts to 12,919.61
- GOLD futures US session (Aug) up $9.70 to $1810.00 an ounce
- COPPER futures (Comex Sept) up $0.0010 to $2.9025 a pound
- OIL futures US Session (Nymex Aug) down $0.16 to $40.59 a barrel
- CRB Index up 0.01 pts to 140.83
- AUDUSD trading at 0.6996
- EURUSD trading at 1.1428
- GBPUSD trading at 1.2568
- USDJPY trading at 107.0200
- USD Index US Session (ICE Sept) down 0.356 to 95.963
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US indexes had an uneventful session Friday as bulls took a breather into the weekend. Recent volatility into the market has stalled with the range for the last two sessions narrowing. Traders are awaiting news of further stimulus as the EU is yet to iron out details on the recovery fund. US Congress is set to debate a new aid package as many states implement fresh lockdowns to curb round 2 out the virus spread. Many analysts expect to see the improving economic data to stall, increasing the expectations for a correction as consumer sentiment wanes. The DOW closed down 0.23% while the broader SP500 was up 0.28% along with the Nasdaq which was up 0.28% for the session. In Europe, major Indexes were generally range bound for the majority of the session following on from a lackluster Asian session. The EU recovery fund is still facing headwinds as they try to overcome opposition from the Netherlands and Hungary to issue joint euro debt. The result from Sunday was an stalemate and any agreement may be postponed until next month.
The problem many see now is that the ‘meltup’ in stocks since the crash is running out of steam. The economic data over recent months has been positive and pointed to a recovery sooner rather than later although stock prices have gotten well ahead of themselves. Now that the second wave is forcing many back into lockdown, economic data is again vulnerable and many traders will not be happy to buy overvalued shares. Many investors are loaded into US stocks and will be forced to re-assess if virus cases continue to climb uncontrolled. Elections are also a major concern as expectations for a sweeping policy change start to filter through the market on a Biden victory.
The USD Index again moved back down to support levels as Indexes held their ground into the weekend. The selling pressure in to the USD may be due to many moving into the Euro as it becomes more attractive as a reserve currency thanks to the potential ‘coming together’ for the recovery fund. The USD’s appeal as a safe haven could be waning. The EURUSD rallied into recent highs in anticipation of the EU coming to an agreement on the Fund over the weekend although may come under pressure today on the lack of any EU agreement as price has opened weaker on resistance to the terms of the fund. If the USD breaks support then expect to see the Euro spike up through 1.1445. The GBPUSD lifted thanks to the USD move lower but continues to look heavy and set for a break below 1.2505. If price holds below 1.2570 then watch for a lower high to drag in more sellers. The AUDUSD continues to find support as long as share markets remain edging higher. Price continues to hover around 0.7000 and may see another run higher in the near term if 0.6973 holds. The USDJPY gave up some of its recent gains as the dollar fell. If the USD is loosing its appeal as a safe haven then expect to see further pressure on the USDJPY with sellers looking down to 106.700 and lower.
SPOT GOLD rallied hard off the $1796 zone as buyers were driven by the weakness into the USD. If the weakness into the Dollar continues then that may be all that is needed to push Gold up through $1816 which will drag in more bulls to the action. Crude Oil continued to hover around the $40 level with both buyers and sellers awaiting further direction. A spike lower was quickly soaked up as dollar weakness supported buyers. Copper also soaked up any selling pressure as price oscillated around 2.9065. Dollar weakness will support another run at the highs although buyers will need to make their move soon as the pressure continues to mount from sellers.
Cryptocurrencies were relatively buoyant over the weekend as bitcoin looks set to move to new short term highs. Bitcoin is currently trading at $9172.6 down 0.01% while Ethereum is at $235.55 down 0.20% and Ripple is at $0.19987 down 0.67%.
The ASX200 had a relatively non-eventful session Friday until the final hour where price manage to rally into the close. The Index moved up off 6000 support to end up 22.7 points to 6033.6. Most sectors ended the day with minor gains with Materials and Metals and Mining leading the way. Still, falling stocks outnumbered advancing ones by 594 to 578 and 368 ended unchanged.
The ASX200 is expected to open up 5 points after the SPI200 managed to hold onto the days gains into the US close.
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ECONOMIC DATA OUT TODAY (AEST)
JPY Monetary Policy Meeting Minutes and Trade Balance 9:50am
EUR German PPI Data 4pm
EUR Current Account 6pm
GBP MPC Members Haldane and Tenreyro Speak 1:10am
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SPI200 INTRADAY LEVELS TO WATCH
