TRADESETUP

July 17, 2019

The Morning Jumpstart

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OVERNIGHT MARKET SNAPSHOT (as at 7:15am AEST)

  • SPI200 (Sep) overnight futures down 12 pts to 6570
  • SP500 down 10.26 pts to 3004.04
  • NASDAQ down 35.39 pts to 8222.80
  • Dow Jones down 23.53 pts to 27,335.63
  • FTSE100 up 45.48 pts to 7577.20
  • DAX30 up 43.63 pts to 12,430.97
  • GOLD futures US Session (August) down $7.10 to $1406.40 an ounce
  • COPPER futures US Session (Comex Sept) down $0.0160 to $2.6950 a pound
  • OIL futures US Session (Nymex Aug) down $1.98 to $57.62 a barrel
  • CRB Index down 3.00 pts to 180.08
  • AUDUSD trading at 0.7011
  • EURUSD trading at 1.1209
  • GBPUSD trading at 1.2406
  • USDJPY trading at 108.2400
  • USD Index (ICE Sept) at 97.020 up 0.475

US Indexes traded lower after Banks highlighted concerns over lower interest rates putting a squeeze on profits. The expectation for banks is that the flattening Bond Yield curve will continue to see interest income reduce and deposit costs increase. Traders were also turned bearish from Trumps comments on China trade saying that there is still a long way to go and threatened further tariffs. Fed Chair Powell reiterated that the central bank would “act as appropriate” to keep the US economy humming which gave traders some comfort. The DOW closed down 0.09% and the broader SP500 was down 0.34% and the Nasdaq also ended down 0.43%. In Europe, major Indexes traded higher after weakness in the Euro helped exporters and upbeat US earnings from Banks spurred gains for the regions lenders. Although Europe closed higher, they may see weakness on the open tonight as they missed the bulk of the move lower in the US.

The USD Index moved higher as traders jumped into the currency as retail sales data came out better than expected further easing expectations for aggressive rate cuts and supporting the idea for potential inflation. The Euro fell to get pushed through 1.1240 towards 1.1190 lows as it searches for support. The GBP was also under fire to push down through previous lows at 1.2444 currently consolidating around 1.2400 even. The potential for a no-brexit deal continues to pressure the currency. The AUD joined in the party to move lower off highs around 0.7040. The USDJPY pushed up off lows on USD strength but fell short of previous highs above 108.60.

Gold gave up some of the recent gains as price came under pressure from a rally into the USD. Traders will also be watching further economic data out for signs of strength into the USD as there are still buyers holding that may be fuel for a squeeze lower. Oil was nailed as priced dropped on USD strength and also on conflicting news over Iran. The US said that they are making progress with Iran over its nuclear program while Irans supreme leader remains defiant. Copper also came under fire on USD strength as recent buyers locked away some gains eyeing further upside pressure on the dollar.

Cryptocurrencies came under pressure overnight as Bitcoin falls back below the 10000 level as US senators grill Facebook on crypto plans. Bitcoin is currently trading at $9556.8 down 13.08% while Ethereum is at $204.13 down 13.25% and Ripple is trading at $0.29781 down 5%.

The ASX200 had a tame session yesterday as price edged down to the previous sessions lows to close at 6641 down 12 points. Sectors were mixed across the board as Energy and Telecom Services were weakest while Utilities managed to finish at the top of the leader board. Rising stocks outnumbered declining ones by 589 to 562 and 381 ended unchanged.

Minutes from the RBA meeting yesterday showed that the board will continue to monitor the labour market closely and adjust monetary policy if needed to achieve their inflation target of 2-3%. They believe that lower interest rates will ultimately stimulate growth and provide more Australians with jobs.

The ASX200 is expected to open down 10 points after the SPI200 breaks down through support into the US close.

ECONOMIC DATA OUT TODAY (AEST)

GBP CPI and PPI Data 6:30pm

EUR CPI Data 7pm

CAD CPI Data 10:30pm

USD Building Permits and Housing Starts 10:30pm

USD Crude Oil Inventories 12:30am

USD Beige Book 4am

SPI200 INTRADAY LEVELS TO WATCH

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