The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (as at 8:15 AEDT)

  • SPI200 (Mar) overnight futures up 18 pts to 5988
  • SP500 down 6.07 pts to 2731.63
  • NASDAQ down 26.80 pts to 7375.28
  • Dow Jones down 21.22 pts to 25,390.30
  • FTSE100 down 4.28 pts to 7173.09
  • DAX30 down 43.26 pts to 11,324.72
  • GOLD futures US Session (April) down $8.90 to $1310.30 an ounce
  • COPPER futures US Session (Comex March) up $0.0080 to $2.8250 a pound
  • OIL futures US Session (Nymex March) up $0.24 to $53.90 a barrel
  • CRB Index up 0.61 pts to 180.56
  • AUDUSD trading at 0.7119
  • EURUSD trading at 1.1367
  • GBPUSD trading at 1.2936
  • USDJPY trading at 109.9700

The US edged lower overnight as the rally paused on some disappointing company results. Trumps State of the Union speech failed to unveil new infrastructure plans but instead was focused on ‘building the wall’. He also raised the possibility of another government shutdown if he failed to receive funding. The DOW closed down 0.08% while the broader SP500 was down 0.22% and the Nasdaq ended down 0.36%. In Europe, major Indexes were lower as weakness crept in from the open. Bonds were in demand as expectations for a rate rise this year from the ECB have eased on global growth concerns. Traders will be focused on Powells speech at 11am AEDT today.

In Brexit news, Theresa May will travel to Brussels on Thursday to tell EU leaders they must accept legally binding changes to the Irish border arrangements of Britain’s divorce deal or face a disorderly no-deal Brexit.

The USD moved higher being supported by demand into bonds and from selling into major pairs such as the AUD and GBP. The EUR and the GBP were both weaker while the USDJPY found some safe haven buying into the pair. The Pound is still fragile as traders assess economic data and damage to the economy from Brexit uncertainty. The AUD took a nosedive after the RBA statement in which traders interpret the next move to be a rate cut even as the RBA remain in a holding pattern. The currency was down over 100 pips from the announcement at 12:30pm AEDT.

Gold ended lower as the USD gained more ground while Gold in Aussie Dollar terms rallied thanks to a drop in AUD. We expect to see potential buying support into Aussie Gold miners. Oil kicked higher to erase initial weakness after Inventory data came out in line with expectations and as OPEC production drops to its lowest since March 2015. Copper gave up earlier gains through the US session but still managed to end in the green.

Cryptocurrencies moved lower overnight with general weakness across the board. Bitcoin is currently trading at $3393.7 down 2.00% while Ethereum is at $103.96 down 2.94% and Ripple is at $0.2901 down 3.76%.

The ASX200 couldn’t quite back up the previous session as the Index finished up 20.2 points to 6026.1. The big four banks were all lower from the open as traders digested last nights recommendations from the Royal Commission. The RBA mentioned that they are in a holding pattern on interest rates but sees headwinds from downside risk to the global economy and local risk from declining housing prices. Advancing stocks outnumbered falling ones by 597 to 510 and 346 ended unchanged.

The ASX200 is expected to open up 10 points after the SPI200 pushed higher overnight although found weakness into the US close.

– 

ECONOMIC DATA OUT TODAY (AEDT)

NZD Employment Change and Unemployment Rate 8:45am

USD FOMC Member Quarles Speaks 10:05am

USD Fed Chair Powell Speaks 11am

CNY Bank Holiday

AUD NAB Business Confidence 11:30am

EUR German Industrial Production 6pm

EUR Economic Forecasts 9pm

GBP BOE Inflation Report, Official Bank Rate and Monetary Policy Summary 11pm

USD Unemployment Claims 12:30am

USD FOMC Member Clarida Speaks 1:30am

SPI200 INTRADAY LEVELS TO WATCH