December 4, 2018
OVERNIGHT MARKET SNAPSHOT (8:10am AEDT)-
The US had a strong open and managed to hold onto the gains as buyers continued to support higher levels. Trade issues have been a major sticking point for investors for most of the year and now they may be seeing the start of a solution. Global growth may start to lift out of the doldrums as tariffs may be eased. There are still a lot of sticky issues to work through between the two nations before they can agree on a trading relationship going forward. The DOW was up 1.13% while the broader SP500 was up 1.00% and the Nasdaq also ended up 1.51%. In Europe shares played catchup to rally strong into the close with the German DAX up over 1.8% and FTSE up 1.18%. Buyers were happy with the weekend G20 results and news on trade.
The US Fed Reserve continued to support a move towards slow but steady interest rate increases and said that they will not be swayed by market swings and will be data driven over time. Bond markets are still concerned namely with the spread between the 2 and 10 year Bonds which has narrowed to levels similar to 2007 before the start of a deep recession.
The USD was lower as traders sold the safe haven currency to move into riskier assets. Major crosses that have been tied to the China/US trade news such as the NZD, CAD and AUD, all gained. The EUR was stronger while the GBP edged lower and the AUD, which is seen as a China trade barometer, opened stronger yesterday morning and held onto gains through the European and US sessions.
Gold was higher having a good night as the USD waned. Oil opened strong Monday morning and managed to hold onto gains through the US session thanks to the trade truce and expected supply cuts. Copper opened stronger but then faded through the US session back down towards Saturday mornings close.
Cryptocurrencies hit lower again as Bitcoin falls below the $4000 level currently trading at $3888.1 down 8.50%. Ethereum is trading at $107.68 down 9.30% while Ripple is currently at $0.34812 down 6.94%.
The ASX200 reversed the losses from Friday plus more as traders dived back into the action on news that the US and China have called a ceasefire on tariffs. The ASX200 closed up 104 points at 5771.2. Advancing stocks outnumbered falling ones by 769 to 417 and 316 ended unchanged. Energy, Resources and Miners were the winners for the day helping the index erase Fridays losses. We may see more of the same today with strength into commodity prices. Traders will be awaiting the RBA interest rate announcement today at 2:30pm and for further direction on interest rates from the RBA.
The ASX200 is expected to open down 5 points but this may not last long as buyers look for a potential Xmas rally on the back of stronger commodities and a lift in global sentiment.
ECONOMIC DATA OUT TODAY (AEST) –
AUD Current Account 11:30am
AUD RBA Rate Statement and Cash Rate 2:30pm
GBP BOE Gov Carney Speaks 8:15am
USD FOMC Member Williams Speaks 2am
GBP MPC Member Vlieghe Speaks 5am
SPI200 INTRADAY LEVELS TO WATCH –
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