The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT

  • SPI200 (Sep) overnight futures down 11 pts to 6438
  • SP500 up 2.21 pts to 2883.98
  • NASDAQ up 29.56 pts to 7862.82
  • Dow Jones down 22.45 pts to 26,007.07
  • FTSE100 up 27.01 pts to 7198.70
  • DAX30 up 82.19 pts to 11,650.15
  • GOLD futures US Session (December) up $29.00 to $1513.20 an ounce
  • COPPER futures US Session (Comex Sept) up $0.0290 to $2.5870 a pound
  • OIL futures US Session (Nymex Sep) down $1.32 to $52.31 a barrel
  • CRB Index down 2.65 pts to 167.89
  • AUDUSD trading at 0.6760
  • EURUSD trading at 1.1203
  • GBPUSD trading at 1.2143
  • USDJPY trading at 106.2600
  • USD Index (ICE Sept) at 97.445 up 0.028

US stock Indexes started the session well on the back foot but then staged a strong rally into the close to end relatively flat as bargain hunters came out to play. Investors were still concerned of the possibility of a global recession as they headed for the safety of government bonds both in the US and Europe. The DOW opened more than 500 points lower which put pressure on European stocks to erase their gains into the European close. Trump downplayed a lengthy trade war and said the administration was planning to host a Chinese delegation in September. Also helping markets was the activity from Chinese state banks to support the Yuan. The DOW closed down 0.09% while the broader SP500 was up 0.08% and the Nasdaq also ended up 0.38%. In Europe, markets ended slightly higher but gains were capped by weakness in the US futures markets going into the close. Germany’s Industrial output came out weaker than expected for June as exporters were caught up in trade disputes.

Central banks are getting more active in their bid to fight off low inflation. The RBNZ slashed interest rates by 0.50% which was more than expected and sent the Kiwi sharply lower along with the Aussie. The move increased bets that central banks around the globe will head in the same direction with easing monetary policy but traders are still concerned that this may not be enough as the Yuan and USD may be the problem.

The USD edged higher again overnight as the Bond rally continued in the flight to safety. The Euro swung between gains and losses with buyers happy to buy dips and hold higher lows off 1.1170. The GBP also saw some choppy action as a late rally in the European session was given back as price slumped into the US close. The AUD was hit lower on the news that New Zealand cuts rates by more than expected. The Aussie dropped around 100 pips before buyers stepped in to drive price back up and minimise the loss. The USDJPY initially found selling in the European session but was then supported by a rally into the USD to end roughly where it started. The currency pair still looks poised to head lower on safe haven YEN buying.

Gold just kept heading higher to push above the $1500 level. Safe haven buying is the key driver for the rally and we would expect this to continue as long as there is pressure on share markets. Oil was hit lower on expectations that global demand will be hurt as the global economy comes under fire. Adding fuel for the sellers was a stronger than expected US inventory number showing increased supply. Copper found some good buying off support zones to take out a minor resistance level in the move higher. It will be interesting if a move up off key support can be sustained as the lift overnight is due to talks of the US/China meeting in Sept. Iron Ore continued its slump which will keep the pressure on Iron Ore miners in the short term.

Cryptocurrencies lifted with Bitcoin leading the charge and attacking the 12000 mark. Bitcoin is currently trading at $11957 up 2.39% while Ethereum is lagging and trading at $224.06 down 0.79% and Ripple is at $0.31032 down 0.12%.

The ASX200 was expected to open up strong yesterday but opened relatively flat and struggled to get going. After the lunch break things started to improve and the index was string into the close to end up 41.4 points to 6519.5. The best performing sector was Gold and followed by Emerging Companies then Consumer Discretionary. Rising stocks outnumbered declining ones by 777 to 442 and 345 ended unchanged.

The ASX200 is expected to open down 5/10 points after a choppy session overnight saw the SPI200 swing between gains and losses.

ECONOMIC DATA OUT TODAY (AEST)

JPY Bank Lending and Current Account 9:50am

CNY Trade Balance Tentative

EUR ECB Economic Bulletin 6pm

USD Unemployment Claims 10:30pm

USD Final Wholesale Inventories 12am

SPI200 INTRADAY LEVELS TO WATCH