June 24, 2019
OVERNIGHT MARKET SNAPSHOT
US markets were lower to end the week which has been dominated by Central bank news and interest rate cut excitement. We expect this week will focus again on US/China trade as the two nations are slotted to meet at the G20 meetings in Osaka Japan this week. Traders will now be focused on the outcome for direction of the markets as they already have accommodative interest rates for support. The DOW closed down 0.13% while the broader SP500 was down 0.13% and the Nasdaq ended down 0.24%. In Europe, major Indexes took a breather as they also ended lower as traders booked some gains ahead of the weekend.
The USD Index continued to pressure buyers and headed lower. Net longs in the Dollar fell to the lowest level since mid-Feb as traders continue to reduce positions which started back before the recent Fed meeting where the majority of members supported a rate cut. The Euro continued to see strong support from buyers to squeeze out the short sellers as expected. If the squeeze continues or picks up pace, next levels are at 1.1425 then 1.1550. The GBP initially fell on expectations that hard Brexit proponent Boris Johnson will become prime minister. Buyers then pushed the pair back up into the close, and resistance around 1.2750, to make back the lost ground. The AUD lagged on the USD weakness and was capped around the 0.6835. A break of this level could see a move up to the 0.7000 mark. The USDJPY saw some choppy action as price found some initial buying strength before USD weakness kicked in and pushed the pair lower. Price is extended at current levels and looks set to squeeze out some sellers in a quick pop higher as the longer term move lower from 108.600 may be running out of steam.
Gold continues to move higher with the perfect storm brewing being a weak macroeconomic environment, low bond yields, soft USD and rising geopolitical tensions. Oil prices continue to move higher as traders expect tensions between the US and Iran will get worse before they get better therefore disrupting the supply of oil. Copper moved lower, away from highs set the previous session but still holds the trend up from 2.6250 lows and looks set to continue.
Cryptocurrencies are on the charge being led by Bitcoin as prices power higher over the weekend. Bitcoin is currently trading at $11,333.0 up 6.52% while Ethereum is at $320.63 up 4.95% and Ripple is at $0.48743 up 2.85%.
The ASX200 opened relatively flat on Friday and then was gradually sold down into the close to end down 36.6 points to 6650.8. Some heat had to come out of the market after the previous few bullish sessions with the Healthcare sector down 2.44%. Telcos, IT and Consumer Discretionary sectors also had a rough day while Energy performed well. Falling stocks outnumbered advancing ones by 645 to 628 and 382 ended unchanged.
The ASX200 is expected to open down 15 points after the SPI200 extended down into support at the close of the US session Saturday morning.
ECONOMIC DATA OUT TODAY (AEST)
AUD RBA Gov Lowe Speaks 9:30am
EUR German Ifo Business Climate 6pm
SPI200 INTRADAY LEVELS TO WATCH
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