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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 28/07/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures up 26 pts to 6034
- SP500 up 23.78 pts to 3239.41
- NASDAQ up 173.09 pts to 10,536.27
- Dow Jones up 114.88 pts to 26,584.77
- FTSE100 down 18.94 pts to 6104.88
- DAX30 up 0.60 pts to 12,838.66
- GOLD futures US session (Aug) up $40.00 to $1937.50 an ounce
- COPPER futures (Comex Sep) up $0.0180 to $2.9105 a pound
- OIL futures US Session (Nymex Sep) up $0.36 to $41.65 a barrel
- CRB Index up 0.78 pts to 143.82
- AUDUSD trading at 0.7148
- EURUSD trading at 1.1749
- GBPUSD trading at 1.2890
- USDJPY trading at 105.3900
- USD Index US Session (ICE Sept) down 0.770 to 93.610
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US indexes moved higher during the session being supported by tech stocks as the NASDAQ fought back from recent losses. At the forefront of traders minds is stimulus which the government is expected to announce this week. Congress is currently ‘playing politics’ as they negotiate a deal before jobless benefits end in a few days. The number of virus cases continues to show no sign of slowing which will dampen the economic recovery. Also, tensions between the US and China continue to grow so it is very important that Congress work out a stimulus package. Expect to see more choppy action until stimulus news hits the market. Supporting buyers was news that the US government allocated an additional $472 million towards Moderna’s coronavirus vaccine research. The DOW closed up 0.43% while the broader SP500 was up 0.74% and the Nasdaq ended up 0.1.67% for the session. In Europe, major Indexes were weaker after Britain imposed a two-week quarantine on travelers returning from Spain after a surge in coronavirus cases. Travel related stocks dragged on Indexes and traders sentiment as Europe also battles with the recovery. If the US stimulus package does not meet traders expectations, we will see the pressure mount on high share prices.
The USD Index continued to sell off in search of support. The dollar is under pressure as increasing virus cases in the US drag on hopes for an economic recovery. Also, the Fed is committed to lower interest rates for longer which means that the dollar is loosing its ‘yield’ advantage over other major currencies such as the Euro. The EURUSD bulls continued to support the Euro as the dollar moved lower. Expect to see price trade up through 1.1800 in coming sessions. The GBPUSD pushed up through the 1.2800 level and is now set to move up through 1.3000 potentially on its way to 1.3200 in the longer term as long as the shift out of the USD continues. The AUDUSD did not see as much love as other pairs on the fall in the dollar as it remains linked to the share markets performance. Price may struggle up at the 0.7170 zone if shares continue to struggle ahead of a stimulus package. The USDJPY continues to move lower under the weight of USD selling. The 105.000 zone is key for bulls otherwise a spike down to 102.000 is on the cards.
SPOT GOLD price surged as bulls jumped into the action right from the open. Price is being supported by the move lower in the dollar. The rally may be giving us a heads up that a top is in place in Indexes although Bond yields and the VIX (volatility Index and a gauge of market fear) are well contained. Bond yields were flat and the VIX was lower for the session suggesting it is not safe haven buying driving the move up but more dollar related momentum. If yields fall and the VIX rallies, then things may really get interesting. Crude Oil again soaked up the selling pressure down to the 40.60 area on a spike lower. The weaker dollar continues to provide support but the concern now is for a fall in demand as the second wave pressures economies. Copper moved up although price action is set to come under pressure as we expect further buyers to be squeezed out of the action.
Cryptocurrencies continued to charge higher with bitcoin taking the lead. Bitcoin is currently trading at $10818.5 up 8.59% while Ethereum is also doing well and is at $322.27 up 3.61% and Ripple is at $0.22375 up 3.64%.
The ASX200 had a relatively uneventful session to start the week yesterday as buyers pushed price slightly higher within the first 30 minutes and then the action held in a 10/15 point range into the close. In the end the Index closed up 20.2 points to 6044.2 with the Gold sector being the standout which was followed by Metals and Mining then Materials. Rising stocks outnumbered declining ones by 699 to 564 and 354 ended unchanged.
The ASX200 is expected to open up 20/25 points as the SPI200 edged higher overnight to follow on from the days choppy action.
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ECONOMIC DATA OUT TODAY (AEST)
EUR Spanish Unemployment Rate 5pm
USD Consumer Confidence 12am
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SPI200 INTRADAY LEVELS TO WATCH
