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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 21/07/20
- SPI200 (Sept) overnight futures up 42 pts to 6012
- SP500 up 27.11 pts to 3251.84
- NASDAQ up 263.90 pts to 10,767.09
- Dow Jones up 8.92 pts to 26,680.87
- FTSE100 down 27.78 pts to 6262.51
- DAX30 up 127.31 pts to 13,046.92
- GOLD futures US session (Aug) up $9.00 to $1819.00 an ounce
- COPPER futures (Comex Sept) up $0.0168 to $2.9213 a pound
- OIL futures US Session (Nymex Aug) up $0.10 to $40.69 a barrel
- CRB Index down 0.14 pts to 140.69
- AUDUSD trading at 0.7016
- EURUSD trading at 1.1444
- GBPUSD trading at 1.2660
- USDJPY trading at 107.2200
- USD Index US Session (ICE Sept) down 0.137 to 95.752
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US indexes had a relatively contained session with the broader market only being dragged higher by a surge in the Nasdaq. The rally in Tech stocks was based on hopes for a vaccine to drag the economy out of its current hole. Any news on a vaccine has been the trigger for a risk on move and where better to go than back into the charging tech sector. Couple that with a looming US relief package with two weeks until jobless benefits expire for millions of Americans, and you have every reason for bulls to continue the march higher knowing that a fall will be backstopped. The DOW closed up only 0.03% while the broader SP500 was up 0.84% and the Nasdaq led the charge ending up 2.51% for the session. In Europe, major Indexes were positive on news that the EU is close to hammering out final details of the deal for the recovery fund. The squabbling has taken longer than many had hoped but the markets continue to look ahead to a deal being done to support growth in the block and lift economies out of the covid-19 induced slump.
The USD Index continued to come under pressure from a risk on move into shares and as the EURO takes center stage. Price remains around support with sellers continuing to hold lower levels which suggests that a break of support is on the cards. We do not expect a sudden safe haven rally in the short term as traders are focused only on the positive news for now. If a battle ensues in Congress in coming weeks on the stimulus package, then expect to see flow back into the USD. The EURUSD held on to recent gains on positive sentiment towards the EUs recovery fund. The sell trigger may well be the size of the grants from the fund. If they are smaller than traders expect then we will see an unwind of long positions and a squeeze lower. The GBPUSD rocketed higher once the USD started to move lower which confirms support from buyers around the 1.2510 level. Price is now back up at resistance where we expect to see a reaction from sellers and buyers to lock in some gains to move price lower. The AUDUSD continued to move higher with the risk on sentiment into shares. Price action started the move higher in the Asian session as major indexes started to find support after a minor selloff. Price is now set to test back up to the 0.7050 resistance zone. The USDJPY had a choppy session with the movements directly linked to the swings in the USD. Price initially rallied hard prior to the ASX open as sellers were squeezed out on a USD spike. From there, sellers were back into the action to pressure price down. Resistance is holding for now at 107.400 although the action is building higher lows for a move up through resistance.
SPOT GOLD looks bullish as the USD hovers around support. Any move lower continues to trigger buyers into Gold so we are watching for pullbacks to be met with buyers as long as the dollar continues to come under pressure. Price is extended so we expect to see some buyers squeezed out above 1806 before another leg higher. Crude Oil soaked up initial selling pressure to rally late in the session into the US close. Price is still holding around the 40 zone with a minor resistance level holding at 41. If buyers can lift price through 41 off a higher low then bulls may be dragged into the action. Copper was lifted along with the risk on tone into shares. Price spiked up but remains in contraction off the highs. If price can move up through 2.9500 then expect to see a run at previous highs around 3.000.
Cryptocurrencies were happy to hold around previous levels and had a quiet session. Bitcoin is trading at $9169.7 up 0.02% while Ethereum is trading at $236.34 up 0.34% and Ripple is at $0.19534 down 1.97%.
The ASX200 spent all session yesterday on the back foot to start the week in red territory. The index closed down 32 points to 6001.6 as major Indexes came under pressure during the Asian session. Losses in the Energy, Telecom Services and Industrials held the market down. Falling stocks outnumbered advancing ones by 644 to 551 and 348 ended unchanged.
The ASX200 is expected to open up 43 points after the SPI200 made back all the losses from the day session plus more.
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ECONOMIC DATA OUT TODAY (AEST)
AUD Monetary Policy Meeting Minutes 11:30am
AUD RBA Gove Lowe Speaks 12:30am
CAD Retail Sales Data 10:30pm
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SPI200 INTRADAY LEVELS TO WATCH
