The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)

  • SPI200 (Sep) overnight futures down 23 pts to 6351
  • SP500 up 7.00 pts to 2847.60
  • NASDAQ down 7.32 pts to 7766.62
  • Dow Jones up 99.97 pts to 25,579.39
  • FTSE100 down 80.87 pts to 7067.01
  • DAX30 down 79.99 pts to 11,412.67
  • GOLD futures US Session (December) up $5.80 to $1533.60 an ounce
  • COPPER futures US Session (Comex Sept) up $0.0010 to $2.5930 a pound
  • OIL futures US Session (Nymex Sep) down $0.53 to $54.70 a barrel
  • CRB Index down 0.61 pts to 170.03
  • AUDUSD trading at 0.6777
  • EURUSD trading at 1.1107
  • GBPUSD trading at 1.2086
  • USDJPY trading at 106.1100
  • USD Index (ICE Sept) trading at 98.015 up 0.189

US stock Indexes ended higher in a volatile session overnight swinging between gains and losses but still remain on a knifes edge. Prior to the US open, markets again came under extreme pressure as they collapsed on the back of news that China would retaliate if the US imposed new tariffs. Then later, Walmart released good earnings and China news released a vague report saying negotiators still hope to meet the US halfway. The Dow then spiked back into the US open to make up the lost ground. Bulls were helped by some better than expected economic data releases prior to the US open although the session remain weighed down by slowing global growth concerns. The DOW closed up 0.39% while the broader SP500 was up 0.25% and the Nasdaq also ended down 0.09%. In Europe, traders had a rough session as they were caught up in conflicting news releases. Indexes fell apart on the open only to bounce back and make back some of the losses. Traders are still skeptical and happy to remain bias short as the trade war drags on and talk is cheap as they await a firm news report on progress between the US and China.

Global bond yields continue to drag on traders sentiment as the Yield Curve remained inverted for a second day in a row (yield on the 10 year bond is lower than the yield on the 2 year bond). In the past 50 years, every US recession has been preceded by an inverted yield curve so traders have good reason to be concerned and news releases may not be enough to stem the tide of selling.

The USD was lifted by the unexpectedly positive retail sales figures after initially being under pressure as markets came under fire in the European session. The Euro fell over 50 pips as the USD rallied on retail sales data and the currency pair held the losses into the close. The GBP rallied hard from the open of the European session as local retail sales data came in better than expected and put the squeeze on recent sellers. Once the USD rallied, sellers piled back into the Pound and sent price back down to where it started prior to the data release. The AUD lifted during the day session on the back of better than expected local employment data and managed to be supported by news from China on trade. The USDJPY was generally range bound being caught between a positive USD and safe haven Yen buying. At the close price did end slightly higher back above the 106.000 level.

Gold was underpinned by the share market volatility and edged higher as safe haven buyers held onto gains in a volatile market which swung hard on the back of trade related news. Oil prices fell more than 1% to extend the previous session’s 3% drop being pressured by mounting recession concerns and a surprise boost in US crude inventories. Copper ended the session flat as bulls and bears fought it out over trade war news. Key support around 2.5650 is still holding as buyers continue to step in to support the level although and negative swing in trade news could see the level broken which opens up the possibility of a deeper correction lower.

Cryptocurrencies were choppy with Bitcoin falling below the $10000 through the Asian session and staging a recovery into the close of the US. Bitcoin is currently trading at $10353.3 up 1.60% while Ethereum still struggles trading at $186.39 down 0.90% and Ripple is at $0.26400 down 1.60%.

The ASX200 was hit hard on the open yesterday as expected, with traders hitting the sell button and pushing the index down 187.8 points into the close to end at 6408.1. The sectors were a see of red with Energy and IT coming under the most pressure while the Gold sector was the only to finish in the green but only just. Falling stocks outnumbered advancing ones by 1040 to 254 and 289 ended unchanged.

The ASX200 is expected to open down 25 points as the SPI200 was caught up in a choppy a volatile overnight session. Markets remain on a knifes edge so we remain cautious going into the weekend.

ECONOMIC DATA OUT TODAY (AEST)

EUR Trade Balance 7pm

USD Building Permits and Housing Starts 10:30pm

USD Consumer Sentiment 12am

SPI200 INTRADAY LEVELS TO WATCH