The Morning Jumpstart


  • SPI200 (Sep) overnight futures down 135 pts to 6400
  • SP500 down 85.72 pts to 2840.60
  • NASDAQ down 242.42 pts to 7773.94
  • Dow Jones down 800.49 pts to 25,479.42
  • FTSE100 down 103.02 pts to 7147.88
  • DAX30 down 257.47 pts to 11,492.66
  • GOLD futures US Session (December) up $13.20 to $1527.30 an ounce
  • COPPER futures US Session (Comex Sept) down $0.0380 to $2.5920 a pound
  • OIL futures US Session (Nymex Sep) down $2.15 to $54.95 a barrel
  • CRB Index down 2.44 pts to 170.64
  • AUDUSD trading at 0.6747
  • EURUSD trading at 1.1139
  • GBPUSD trading at 1.2057
  • USDJPY trading at 105.8600
  • USD Index (ICE Sept) trading at 97.830 up 0.199

US stock Indexes were slammed overnight to give up all the gains from the previous session plus more. Traders are coming to terms with a recession as they focus on US Bonds as the yield curve temporarily inverted for the first time in 12 years ( where shorter-dated borrowing costs are higher than longer ones ). Data out from China and Germany showed economic contraction which started the markets on the downwards spiral prior to the US session open. The DOW closed down 3.05% while the broader SP500 was down 2.93% and the Nasdaq also ended down 3.02%. In Europe, Indexes started weak and continued to grind lower into the close as the global economic slowdown has traders taking risk back off the table. The optimism from the prior session evaporated and gave way to fear for the near term future.

Global bond yields continue to come under fire and at least some of the share market move lower can be attributed to institutional program trading linked to inverted yield curve. We expect to see the volatility increase as investors come to terms with a correction in markets as they continue to be pressured by weak economic data, low global inflation, trade conflicts and political tensions in Hong Kong.

The USD rallied on the back of a move to safe haven investments and on expectations that the Fed Reserve will look to cut interest rates at the next few meetings. The Euro fell as the USD rallied and pushed the Euro down through support at 1.1170 triggering sell stop losses. The GBP also came under pressure but held up well. The pound earlier rallied on the back of better than expected inflationary data but gave up the gains as the USD rallied. The AUD fell apart earlier than the other majors as it was pressured by worse than expected data out of China. All gains from the previous sessions optimism over trade have evaporated and price looks set to break through 0.6677 lows. The USDJPY edged lower as YEN safe haven buying outweighed USD strength.

Gold managed to rally to make back some of the previous sessions losses as traders continued to move to the safety of the precious metal. Gains were capped by the strength into the USD and may find further pressure as the dollar rallies short term on expectations of US interest rate cuts. Oil dropped like a stone, at one point trading down to $54 a barrel but managed to make back some of the losses into the close. Traders will continue to battle with potential OPEC production cuts and also demand cuts seeing further volatility into price action. Copper also had a rough session as price fell early on Chinese data as buyers all but give up for now as future demand looks gloomy. A move below 2.5900 would open up the door for a selloff down to 2.5725 lows and potentially beyond.

Cryptocurrencies did not react as expected and followed the share market lower. Bitcoin is currently trading at $10230.6 down 6.70% while Ethereum is at $188.71 down 10.23% and Ripple is trading at $0.26931 down 9.74%.

The ASX200 saw a choppy session yesterday as price swung between gains and losses but managed to end up 27.4 points to 6595.9. Gains came from the Healthcare, Energy and IT sectors with Gold coming under pressure as the sector ended down over 4% on profit taking. Rising stocks outnumbered declining ones by 632 to 536 and 360 ended unchanged.

The ASX200 is expected to open down 135 points as markets went into meltdown mode overnight. Traders will be watching employment data out today at 11:30am for hints on future RBA interest rate moves.


AUD RBA Assist Gov Debelle Speaks 9am

AUD Employment Change and Unemployment Rate 11:30am

GBP Retail Sales 6:30pm

USD Retail Sales Data, Philly Fed Manufacturing Index and Unemployment Claims 10:30am

USD Industrial Production 11:15am