The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (7am AEST)

  • SPI200 (Mar) overnight futures down 30 pts to 6320
  • SP500 down 22.10 pts to 2923.73
  • NASDAQ down 45.75 pts to 8049.64
  • Dow Jones down 162.77 pts to 26,430.14
  • FTSE100 down 32.96 pts to 7385.26
  • DAX30 Closed
  • GOLD futures US Session (June) down $7.40 to $1278.30 an ounce
  • COPPER futures US Session (Comex July) down $0.1130 to $2.7910 a pound
  • OIL futures US Session (Nymex June) down $0.29 to $63.62 a barrel
  • CRB Index down 0.59 points to 183.66
  • AUDUSD trading at 0.7014
  • EURUSD trading at 1.1197
  • GBPUSD trading at 1.3044
  • USDJPY trading at 111.3800

The US saw sellers racing to lock in some gains as the major indexes end lower in a broad based selloff. Traders were obviously factoring in a rate cut to ward off potentially easing inflation but the Fed had other ideas. Powell, in his statement, said that a decline in inflation this year could be due to transitory factors and struck a cautious tone on inflation. The DOW closed down 0.61% while the broader SP500 was down 0.75% and the Nasdaq closed down 0.57%. In Europe, most markets were closed for May Day holiday so trading was thin. The FTSE edged lower to close on minor support around 7385.

US bond yields rallied after Powells statement on interest rates as traders unwound bets that the Fed Reserve may cut rates later in the year. Powell cited strength in the labour market and a rise in economic activity as to why he sees no reason to consider a rate cut. Future economic data will be the focus to whether the US sees a pick up in inflation triggering the Fed Reserve to change their tone to a potential rate hike.

The USD spiked higher after Powells statement to end the session positive as traders continued to be long term bullish on the dollar. The EUR along with the GBP and the AUD all spiked lower at 4:30am on Powells rate statement as the USD rallied pressuring dollar crosses lower. The USDJPY saw some choppy action before and after the announcement as price pushed lower to the 111.000 zone before the release only to bounce back sharply on USD strength.

Gold moved lowed on USD strength as talk of a stable economy and potential increasing US inflation kept safe haven buyers out of the action. Oil was hit early in the session after Oil inventory data came out a lot stronger than expected with production setting a new record last week. Price then bounced to close back up slightly below where it started. Copper was hammered lower as buyers bailed on the action and sellers took control on a break down through 2.8900 support.

Cryptocurrencies generally edged higher as Bitcoin hovers above support around $4980 currently trading at $5367.0 up 2.54% while Ethereum is at $159.49 up 1.31% and Ripple is trading at $0.30336 down 0.08%.

The ASX200 clawed back a lot of the last few days losses with the index closing up 50.4 points to 6375.9. The main sectors to push the market higher were IT and Financials with Industrials also helping out. Advancing stocks outnumbered falling ones by 616 to 577 and 386 ended unchanged.

The ASX200 is expected to open down 25/30 points after the SPI200 fell over into the close after the US Interest rate announcement.

ECONOMIC DATA OUT TODAY (AEST)

AUD HIA New Home Sales Tentative

EUR German Retail Sales 4pm

EUR German Final Manufacturing PMI 5:55pm

EUR Final Manufacturing PMI 6pm

GBP Official Bank Rate, BOE Inflation Report and Monetary Policy Summary 9pm

GBP BOE Gov Carney Speaks 9:30pm

USD Unemployment Claims 10:30pm

USD Treasury Currency Report Tentative

SPI200 INTRADAY LEVELS TO WATCH