The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)

  • SPI200 (Sep) overnight futures up 19 pts to 6419
  • SP500 up 31.27 pts to 2878.38
  • NASDAQ up 101.97 pts to 7853.73
  • Dow Jones up 269.93 pts to 25,898.83
  • FTSE100 closed
  • DAX30 up 46.53 pts to 11,658.04
  • GOLD futures US Session (December) down $0.70 to $1536.90 an ounce
  • COPPER futures US Session (Comex Dec) up $0.0090 to $2.5430 a pound
  • OIL futures US Session (Nymex Oct) down $0.37 to $53.80 a barrel
  • CRB Index up 0.30 pts to 168.91
  • AUDUSD trading at 0.6776
  • EURUSD trading at 1.1101
  • GBPUSD trading at 1.2222
  • USDJPY trading at 106.1000
  • USD Index (ICE Sept) trading at 97.960 up 0.430

US Indexes bounced back as the tone on the trade war takes a more positive turn. Trump was out and about spruiking a potential trade deal and helping to support the markets after China earlier called for resolution of the dispute. Traders are still expected volatility as the bounce was on low volume bargain hunting across the board. Talk is cheap and a solid move towards a deal is what will be needed to support sentiment as there is still conflicting reports from Trump and China regarding opening back up negotiations. The DOW closed up 1.05% while the broader SP500 was up 1.10% and the Nasdaq ended up 1.32%. In Europe, major Indexes bounced earlier in the session on the back of China comments but then sold off into the close as traders continue to remain cautious of holding major risk overnight.

The US and China, the worlds two largest economies, have been at it since last year and causing havoc for traders in the market as Trumps and Chinas mixed signals continue to take their toll. The trade war has dampened economic and corporate earnings growth expectations as investors and companies weigh its impact on the global economy. We do not expect to see a clear resolution anytime soon and therefore expect to see major Indexes continue to search for a new equilibrium level.

The USD gained back some of the lost ground to pressure the major crosses lower. The change in tone on the trade war helped support buying back into the pair. The Euro opened higher in the morning but sellers then entered to push price lower through Asian trade and continued the move into the US close. Price has moved back into the range between 1.1065 and 1.1110 but it will not take much for the action to heat up again. The GBP also started the day on its highs and then sold lower into the US close as the dollar strengthened. The AUD benefited from positive comments on the trade war as buyers stepped in to support the action. The pair dropped hard on the Aussie open to fall around 50 pips but then managed to quickly make it back to end on its highs. The USDJPY safe haven bid disappeared as gains were locked away with price bouncing hard of major support around 104.500/105.000.

Gold ended the session relatively flat as safe haven buyers are far from convinced that the trade war is coming to an end and still see major economies on shaky ground. Oil saw a choppy session as price rallied from the Aussie market open from $53 to $55.20 into the US open only to give it all up and close near where it started. Copper managed to bounce off a very weak open and hold onto gains into the US close. We expect to see further gains if the positive sentiment trade negotiations can continue.

Cryptocurrencies held there ground with Bitcoin edging higher to $10267.0 up 2.55%. Ethereum is currently at $186.14 up 1.0% while Ripple is at $0.26791 up 0.11%.

The ASX200 was hit hard on the open yesterday, as expected, starting the session down 110 points as the increase in trade tensions had buyers running for cover. The Index managed to rally slightly into the close and end the day down 83 points to 6440.1. The selling was across the board with the Energy sector feeling the brunt of the bears while the Gold sector ended the day up 6.75%. Falling stocks outnumbered advancing ones by 805 to 388 and 337 ended unchanged.

The ASX200 is expected to open up 20 points as the SPI200 bounced overnight on trade war comments.

ECONOMIC DATA OUT TODAY (AEST)

AUD RBA Deputy Gov Debelle Speaks 12pm

JPY Core CPI 3pm

EUR German Final GDP 4pm

GBP MPC Member Tenreyro Speaks 10pm

USD Consumer Confidence 12am

SPI200 INTRADAY LEVELS TO WATCH