The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)

  • SPI200 (Jun) overnight futures down 31 pts to 6399
  • SP500 down 19.37 pts to 2783.02
  • NASDAQ down 60.04 pts to 7547.31
  • Dow Jones down 221.36 pts to 25,126.41
  • FTSE100 down 83.65 pts to 7185.30
  • DAX30 down 189.24 pts to 11,837.81
  • GOLD futures US Session (August) up $2.00 to $1284.50 an ounce
  • COPPER futures US Session (Comex July) down $0.0290 to $2.6670 a pound
  • OIL futures US Session (Nymex July) down $0.08 to $59.06 a barrel
  • CRB Index up 0.08 pts to 180.34
  • AUDUSD trading at 0.6917
  • EURUSD trading at 1.1135
  • GBPUSD trading at 1.2632
  • USDJPY trading at 109.5600

In the US stock indexes save further selling pressure overnight as the trade war continues to look prolonged and gloomy. The latest headline is that China may use rare earths as a negotiation tool. China holds roughly 71% of the rare earth global market share and may restrict exports to the US. US bond yields again fell in a risk off tone in shares. The DOW closed down 0.87% while the broader SP500 was down 0.69% and the Nasdaq closed down 0.79%. In Europe, markets were hit by the China headline and Indexes plunged lower. European bonds benefited as yields fell with traders expecting the Trade war is set to escalate. Europe continues to be concerned with Italy as traders see a rise in political tensions will cause a debt and banking crisis in the country.

Traders and Investors and becoming more concerned with how to play this market. With the potential that the global economy may slow further, companies and major corporations are unsure of how to position for future growth plans. Risk aversion has increased globally amid disappointing macro data in major economies.

The USD Index edged higher on a safe haven bid into US bonds as traders went risk off in to the major stock indexes. The Euro continued its move lower to come under pressure from the rise in the Dollar and continued headwinds in Europe. Price is down around key longer term support at 1.1120/30. The GBP also edged lower on USD strength but found some buyers stepping in around the lows from 23rd May. The AUD has continued to see pressure as a commodity currency but held up well overnight under USD pressure. The USDJPY found some support as price rallied off lows, through the US session, into the close.

Gold is not seeing the safe haven bid as some expect but is creeping higher on trade war concerns. A push up through 1287 could see a move to 1300 which is where things may get interesting for the precious metal. If the US cuts rates, Gold may no longer be contained by pressure from the USD. Oil was hit hard in the European session only to bounce back in US trade to finish relatively unchanged. Copper pushed lower to trade into the lows around 2.6610 from 23rd May. Pressure is expected to continue if the trade war escalates.

Cryptocurrencies remained relatively contained overnight as they fight back a bit of selling pressure to hold around highs. Bitcoin is currently trading at $8645.5 down 0.71% while Ethereum is at $269.31 down 1.40% and Ripple is trading at $0.44791 down 1.40%.

The ASX200 opened weak yesterday and held the lows as the index gave up all the gains from the previous session plus a bit more. The ASX200 ended the session down 44.8 points to 6440, 20 points off the low of the day with the Telcom Services sector being the only sector to finish in the green. Falling stocks outnumbered advancing ones by 732 to 437 and 385 ended unchanged.

The ASX200 is expected to open down 30 points as the SPI200 continued to move down in the overnight session. Traders will be focused on Building approval data today at 11:30am.

ECONOMIC DATA OUT TODAY (AEST)

AUD Building Approvals and Private Capital Expenditure 11:30am

NZD Annual Budget Release 12pm

AUD HIA New Home Sales Tentative

EUR German Bank Holiday

USD Prelim GDP and Unemployment Claims 10:30pm

USD Crude Oil Inventories 1am

USD FOMC Member Clarida Speaks 2am

SPI200 INTRADAY LEVELS TO WATCH