The Morning Jumpstart


  • SPI200 (Sep) overnight futures down 110 pts to 6460
  • SP500 down 87.31 pts to 2844.74
  • NASDAQ down 278.03 pts to 7726.04
  • Dow Jones down 767.27 pts to 25,717.74
  • FTSE100 down 183.21 pts to 7223.85
  • DAX30 down 213.93 pts to 11,658.51
  • GOLD futures US Session (December) up $18.20 to $1475.70 an ounce
  • COPPER futures US Session (Comex Sept) down $0.0220 to $2.5490 a pound
  • OIL futures US Session (Nymex Sep) down $0.65 to $55.01 a barrel
  • CRB Index down 1.87 pts to 171.49
  • AUDUSD trading at 0.6758
  • EURUSD trading at 1.1201
  • GBPUSD trading at 1.2144
  • USDJPY trading at 105.9600
  • USD Index (ICE Sept) at 97.300 down 0.552

US Indexes were slammed overnight as share markets went into meltdown mode on an escalation of the trade war. The fall in the Yuan had markets rattled and expectations for economic growth were savaged on the potential for longer term strength in the USD. For companies that do business outside of the US in China, times will be tough going forward if the Yuan continues lower. Adding to tensions, China said that companies have stopped buying US agricultural products and that they will not rule out tariffs on farm products bought after Aug 3rd. The DOW closed down 2.90% while the broader SP500 was down 2.98% and the Nasdaq also ended down 3.47%. In Europe, markets were again hit hard continuing the move down from the previous session in a risk off tone on growing trade uncertainty.

China let its Yuan weaken below 7 against the dollar which added to the broad risk off trade overnight and sent trader fleeing to safe haven investments. Traders were generally expecting China to defend the level and the failure saw export oriented Asian currencies dumped. Trump hit out on twitter saying that the action in the Yuan is a “major violation” and “currency manipulation.” Bond yields continued to move lower in both short and long dated bonds on a flight to safety.

The USD moved lower as traders priced in rate cuts at the next Fed meeting in September to stem the tide of an equity market meltdown. The market has now priced in a 100% chance of a cut and the odds of a 50 basis point cut has jumped to 30%. Longer term the Dollar Index is in an uptrend which would be expected to continued if risk aversion continues. The Euro made its way higher as the USD fell pushing up through the recent lower high at 1.1160. Longer term the Euro is still holding the trend lower with resistance up at 1.1283. The GBP struggled to move up as dollar weakness was offset by continued concern for a hard Brexit. Price is stuck in a short term range between 1.2175 and 1.2090. The AUD came under pressure as any escalation in the trade war means lower commodity prices. Price is now sitting at the lows from the spike lower on the 3rd Jan when the Aussie dropped around 250 pips. The USDJPY continued to move lower on the safe haven bid into the Yen.

Gold continued higher on a flight to safety and dollar weakness. Oil managed to hold up okay all things considered as price edged lower but was met with buyers around the 54.50 mark. Copper also held up better than expected although price action is still weak and holding lower highs. Iron Ore came under fire taking some heat out of the previous strong move higher and is expected to give miners a problem today.

Cryptocurrencies continued to move higher benefiting from the drop in global share markets. Bitcoin is currently trading at $11739.9 up 7.06% while Ethereum is at $231.19 up 5.02% and Ripple is trading at $0.32282 up 0.44%.

The ASX200 came under severs pressure yesterday after China comments on trade saw global markets in a spin. The Index ended the session 128.3 points to 6640.3 as fear gripped the action and all sectors lower as Info Tech led the charge while Gold was the only sector that just managed to keep its head above water. Falling stocks outnumbered advancing ones by 959 to 295 and 355 ended unchanged. Asian stocks hit six month lows with the YUAN getting targeted to push below key support levels.

The ASX200 is expected to open down 110 points after the SPI200 continued lower as overnight markets melted down. Traders will be waiting to see what the RBA do with interest rates at 2:30pm today.


NZD Employment Change and Unemployment Rate 8:45am

AUD ANZ Job Adverts and Trade Balance 11:30am

AUD Cash Rate and RBA Rate Statement 2:30pm

EUR German Factory Orders 4pm

USD FOMC Member Bullard Speaks 2am