The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)

  • SPI200 (Jun) overnight futures up 23 pts to 6504
  • SP500 up 13.39 pts to 2886.73
  • NASDAQ up 81.07 pts to 7823.17
  • Dow Jones up 78.74 pts to 26,062.68
  • FTSE100 up 43.60 pts to 7375.54
  • DAX30 up 92.24 pts to 12,045.38
  • GOLD futures US Session (August) down $14.30 to $1331.80 an ounce
  • COPPER futures US Session (Comex July) up $0.0340 to $2.6610 a pound
  • OIL futures US Session (Nymex July) down $0.62 to $53.37 a barrel
  • CRB Index down 0.35 pts to 174.07
  • AUDUSD trading at 0.6960
  • EURUSD trading at 1.1312
  • GBPUSD trading at 1.2687
  • USDJPY trading at 108.4400

US stock Indexes were higher on Friday and again overnight after weaker than expected jobs data confirmed expectations for an interest rate cut. Traders were optimistic on trade with China after the US shelved plans to impose tariffs on Mexico. With hopes that the Fed Reserve will also save the day with rate cuts, traders may be pushing the markets higher on ‘hope’ rather than action and the rally is looking extended. The DOW closed up 0.30% while the broader SP500 was up 0.47% and the Nasdaq was the strongest closing up 1.05%. In Europe, major Indexes also closed in the green being buoyed by sentiment for the return of global growth as Mexico vows to tighten the border.

Traders expect that global growth is likely to continue after tensions with Mexico easing and hopes that a deal will be struck with China although Trump said that he is ready to impose further tariffs after the G20 if a deal is not reached. Buyers are happy to be risk on into equity markets as the US bounces. US bond yields rallied as bonds fell on reversal of safe haven buying pressure for now. The risk is now that the Fed Reserve hold on a rate cut after more positive news overnight showed US jobs hiring surged in April.

The USD moved higher after the US and Mexico reached a deal to avoid tariffs. The Euro came under pressure to give up some of the gains from Friday night after news hit that the ECB were open to rate cuts should they see a further slowing in economic growth. The GBP also fell on USD strength after pushing up through resistance at 1.2748 on Friday after US jobs data. The pair looks a little more bearish at this point as sellers jump into the action. The AUD also came under pressure on USD weakness to push below the 0.6963 support zone. The USDJPY reversed losses after retesting support around 107.880 after the US jobs data Friday. The pair is showing some strength on the shorter term charts especially if price can hold a higher low around current levels.

Gold was initially higher on Friday after jobs data disappointed but then gave up the gains to move lower overnight. Aussie gold may find some support if the AUDUSD comes under fire from a rally into the USD. Oil ended a volatile session lower as major producers Saudi Arabia and Russia had yet to agree on extending an output-cutting deal. Copper rallied and managed to end the session on its highs in a show of strength from the bulls as we may be starting to see a reaction up off support.

Cryptocurrencies are on the move back up as bitcoin targets the 8000 zone again. Bitcoin is currently trading at $7903.9 up 2.53% while Ethereum is at $242.81 up 4.78% and Ripple is trading at $0.39390 up 3.15%.

The ASX200 had a strong session Friday going into the long weekend as the Index closed up 6.9 points to 6443.9. The biggest gaining sectors were fairly evenly spread across Metals and Mining, Resources and Materials with Consumer Discretionary being the only sector down on the day. Rising stocks outnumbered declining ones by 656 to 476 and 420 ended unchanged. China’s Trade Balance data came in a lot stronger than expected yesterday.

The ASX200 is expected to open up 55 points after the US rallies Friday and overnight on weaker employment data.

ECONOMIC DATA OUT TODAY (AEST)

AUD Business Confidence 11:30am

GBP Average Earnings Index, Unemployment Rate and Claimant Count 6:30pm

USD Core PPI Data 10:30pm

SPI200 INTRADAY LEVELS TO WATCH