The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)

  • SPI200 (Mar) overnight futures down 43 pts to 6441
  • SP500 down 23.67 pts to 2802.39
  • NASDAQ down 29.66 pts to 7607.35
  • Dow Jones down 237.92 pts to 25,347.77
  • FTSE100 down 8.78 pts to 7268.95
  • DAX30 down 44.13 pts to 12,027.05
  • GOLD futures US Session (August) down $5.10 to $1284.10 an ounce
  • COPPER futures US Session (Comex July) down $0.0040 to $2.6960 a pound
  • OIL futures US Session (Nymex July) up $0.43 to $59.06 a barrel
  • CRB Index up 1.63 pts to 180.26
  • AUDUSD trading at 0.6926
  • EURUSD trading at 1.1164
  • GBPUSD trading at 1.2654
  • USDJPY trading at 109.3700

In the US stock indexes gave up early gains to run lower into the close as sentiment was again weighed down by US/China trade and also Italy’s budget. US bond yields fell as traders moved to the safe haven asset in a risk off tone in shares. Traders have pinned hopes on a resolution soon to the trade tariffs but are now wondering if Trump even wants one after saying he was ‘not yet ready to make a deal’. The risk now is on an extended dispute and what this means to supply chains and how much damage may be caused to the economy. In Europe, markets were lower as trade concerned saw investors favour safe haven assets such as bonds over shares.

Italy’s budget and dispute with the EU dominated European trade from the open as the European Commission could fine Italy 3 Billion Euros for accumulating debt and deficits that break EU rules. In investors minds, this re-opens the idea of whether Italy want to be apart of the EU.

The USD Index rallied into the US close to pressure USD denominated crosses lower. The Euro continued to come under pressure from a USD rally and as traders remained uneasy that euro-sceptic parties gained more seats. The GBP also edged lower on USD strength as price moves down to previous lows. UK PM candidate Esther Mcvey says that ‘no government that I lead will ever seek an extension beyond Oct 31’…stoking concern for a hard exit. The AUD held its ground in a tight range to end the session slightly higher as traders see no definitive end to the trade war. The USDJPY saw a choppy session as price oscillated between support around 109.250 and minor resistance at 109.600.

Gold moved lower on USD strength and could not find a safe haven bid yet. Price is still hovering above support zones so we expect to see buying pressure pick up if shares fall further. Oil continued to move up as supply concerns support the bulls. Sellers are still in control though as long as the 63.80 zone holds which is a long way off. Copper was pushed lower at the start of the European session as the bears look to start taking control. With a lower high holding and no sign of change on the trade front, we may see a move down to test lows around 2.6550.

Cryptocurrencies hover around highs as Bitcoin currently trades at $8676.5 down 1.08% while Ethereum is trading at $272.10 up 1.48% and Ripple is at $0.45284 up 6.01%.

The ASX200 opened up strong and managed to hold onto the gains into the close. The index finished up 32.9 points to 6484.8 with the main drivers of the move up being IT and Energy. It was generally a ‘risk on’ mood yesterday with all sectors up except Gold and Utilities. Rising stocks outnumbered declining ones by 660 to 504 and 404 ended unchanged.

The ASX200 is expected to open down 40 points and give up the gains from the previous session as the SPI200 heads south during the US session overnight.

ECONOMIC DATA OUT TODAY (AEST)

JPY BOJ Gov Kuroda Speaks 10am

AUD HIA New Home Sales Tentative

EUR German Buba President Weidmann Speaks 5pm

EUR German Unemployment Change 5:55pm

EUR ECB Financial Stability Review 6pm

CAD BOC Overnight Rate and Rate Statement

SPI200 INTRADAY LEVELS TO WATCH