The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)

  • SPI200 (Mar) overnight futures down 41 pts to 6444
  • SP500 down 19.30 pts to 2840.23
  • NASDAQ down 113.91 pts to 7702.38
  • Dow Jones down 84.10 pts to 25,679.90
  • FTSE100 down 37.74 pts to 7310.88
  • DAX30 down 197.65 pts to 12,041.29
  • GOLD futures US Session (June) up $1.80 to $1277.50 an ounce
  • COPPER futures US Session (Comex July) down $0.0090 to $2.7290 a pound
  • OIL futures US Session (Nymex June) up $0.42 to $63.18 a barrel
  • CRB Index up 0.71 points to 181.70
  • AUDUSD trading at 0.6912
  • EURUSD trading at 1.1169
  • GBPUSD trading at 1.2727
  • USDJPY trading at 110.0700

In the US, shares were lower as concerns over an extended trade war start to bite. Fallout over Huawei after the US crackdown last week start to filter into the tech sector as some companies suspend business or shipments to the phone company. China also accused the US of retaining “extravagant expectations” for a trade deal which underlines the divide between the two nations. As the tech sector is the key driver for share market returns and there is no near term meeting between the US and China, traders are concerned. The DOW closed down 0.33% while the broader SP500 was down 0.67% and the Nasdaq also closed down 1.46%. In Europe, major indexes went lower as trade-exposed tech and auto stocks suffered and worries over a prolonged trade dispute increased.

Concern now is that last weeks rally is more of a relief rally and we may be at the start of a stronger move lower. The US and China seem to be digging in for a longer dispute which will see further risk off into equities and into perceived safe haven assets.

The USD was relatively unchanged through the US session as traders await further developments on trade and insight into US interest rate policy from the Fed. The Euro was also relatively unchanged but did manage to edge higher against the dollar as traders brush aside tariff concern and share market weakness for now. The AUD was strong on the open yesterday as traders took the surprise election win as a positive for the economy. The pair did fall from highs above 0.6930 through the overnight session as traders expect safe haven gains into the USD. The GBP also saw a tame session as price held above minor support around 1.2715. The USDJPY lost ground through the Asian and European sessions but managed to bounce back into the close of the US to end unchanged.

Gold edged higher more from shorts sellers booking gains than from a clear safe haven bid into the commodity as the USD held its ground. Oil ended higher as OPEC indicated that they were likely to maintain production cuts. Copper initially pushed lower to the 2.7125 zone but then buyers reacted to push prices back up into the US close. Lower highs still hold so buyers have their work cut out until positive change on the trade front.

Cryptocurrencies bounce back after a minor selloff overnight as Bitcoin trades at $8044.2 down 0.11%. Ethereum is currently trading at $253.24 down 2.45% and Ripple is at $0.40027 down 4.51%.

The ASX200 opened strong yesterday and held onto the gains into the close to finish up 110.8 points to 6476.1. The index was driven higher mainly by the financial sector which closed up 5.85% as the market was caught off guard by an unexpected election result over the weekend. Rising stocks outnumbered declining ones by 635 to 558 and 377 ended unchanged.

The ASX200 is expected to open down 35/40 points after the SPI200 moved lower overnight along with overseas markets.

ECONOMIC DATA OUT TODAY (AEST)

USD Fed Chair Powell Speaks 9am

AUD Monetary Policy Meeting Minutes 11:30am

GBP Inflation Report Hearings 6:30pm

EUR Consumer Confidence 12am

USD Existing Home Sales 12am

USD FOMC Member Evans Speaks 12:45am

USD FOMC Member Rosengren Speaks 2am

SPI200 INTRADAY LEVELS TO WATCH