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OVERNIGHT MARKET SNAPSHOT
- SPI200 (Sep) overnight futures down 52 pts to 6480
- SP500 down 35.95 pts to 2882.70
- NASDAQ down 95.73 pts to 7863.41
- Dow Jones down 391.00 pts to 25,896.44
- FTSE100 down 27.13 pts to 7226.72
- DAX30 down 14.12 pts to 11,679.68
- GOLD futures US Session (December) up $13.90 to $1522.40 an ounce
- COPPER futures US Session (Comex Sept) down $0.0060 to $2.5830 a pound
- OIL futures US Session (Nymex Sep) up $0.29 to $54.79 a barrel
- CRB Index down 1.47 pts to 170.62
- AUDUSD trading at 0.6752
- EURUSD trading at 1.1216
- GBPUSD trading at 1.2077
- USDJPY trading at 105.2700
- USD Index (ICE Sept) trading at 97.225 down 0.097
US stock markets were hit overnight as traders took more risk off the table on rising trade war tensions. The troubles in Hong Kong are adding to the expectations for further tensions between the US and China as confrontation between the Hong Kong protestors and mainland China looks inevitable. The trade war, along with data out that showed the US deficit widened, all fueled expectations for slower global economic growth and increased chances for a recession. The DOW closed down 1.48% while the broader SP500 was down 1.22% and the Nasdaq also ended down 1.20%. In Europe, markets ended the session lower but will play catchup to the US on the open tonight as the bulk of the move lower in the US was after the European close.
The troubles in Hong Kong are expected to intensify and therefore spill over into business both locally and in the region with Hong Kong being a major economic hub. The fear now is that Beijing will respond with force which will trigger questions on how the US will react but will all mean that a potential end to the trade war will be off the cards. With US Bond yields continuing to fall on a flight to safety, investors are coming to terms with a further slowdown irrespective of where interest rates are held and are therefore happy to wait it out on the sidelines.
The USD moved lower after data showed a widening of the US deficit as traders are now looking ahead to data out tonight on the CPI and inflation. Expectations are for inflation to remain above the Federal Reserves target of 2% which could lead to upward pressure into the Dollar and a lessening of expectations for a further rate cut. The Euro spiked lower on the open of the European session to test previous lows at 1.1674 but then reversed sharply to rally and recover the losses into the US close. The GBP managed to rally after the previous sessions weakness as short traders locked away some gains after price moved into support and the psychological 1.2000 level. The AUD continued to find selling pressure as Hong Kongs troubles increased chances for a prolonged trade war and decreased the Aussie Dollars chances for a near term rally. The USDJPY drifted lower on USD weakness and also as YEN safe haven buyers continues to soak up selling pressure.
Gold resumed its move higher being the recipient of a weaker USD and increased trade war tensions as Volatility surged. Oil reversed an earlier selloff to end the session slightly higher on increased expectations that OPEC will try to put a floor in and support the price by cutting production. The commodity will also continue to come under pressure on increased uncertainty into trade making the longer term price levels a little hazy. Copper found some selling pressure as price holds lower highs off the 2.6130 zone. Price action may react off support around 2.5620 as buyers may start to step in and sellers lock away some gains.
Cryptocurrencies held steady and did not see the buying expected from a pullback into the share market. Bitcoin is currently trading at $11433.4 up 0.46% while Ethereum is trading at $211.56 down 1.39% and Ripple is at $0.30103 down 1.31%.
The ASX200 opened weaker but managed to find some buyers during the session to hold price up off the lows. The Index had a solid close to match up over 10 points, in the end finishing at 6590.3 up 5.9 points. Gains in Healthcare, Industrials and Consumer Discretionary helped to boost the index into the close. Falling stocks outnumbered advancing ones on the Sydney Stock Exchange by 619 to 569 and 377 ended unchanged.
The ASX200 is expected to open down 50 points after the SPI200 moved off the days highs and headed lower along with the US overnight.
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ECONOMIC DATA OUT TODAY (AEST)
AUD NAB Business Confidence 11:30am
EUR German Final CPI 4pm
GBP Average Earnings Index, Claimant Count and Unemployment Rate 6:30pm
EUR German ZEW Economic Sentiment 7pm
USD CPI Data 10:30pm
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SPI200 INTRADAY LEVELS TO WATCH
