The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)

  • SPI200 (Sep) overnight futures down 12 pts to 6418
  • SP500 down 9.22 pts to 2869.16
  • NASDAQ down 26.79 pts to 7826.95
  • Dow Jones down 120.93 pts to 25,777.90
  • FTSE100 down 5.40 pts to 7089.58
  • DAX30 up 71.98 pts to 11,730.02
  • GOLD futures US Session (December) up $15.10 to $1552.30 an ounce
  • COPPER futures US Session (Comex Dec) up $0.0050 to $2.5550 a pound
  • OIL futures US Session (Nymex Oct) up $2.04 to $55.68 a barrel
  • CRB Index up 0.79 pts to 169.70
  • AUDUSD trading at 0.6751
  • EURUSD trading at 1.1091
  • GBPUSD trading at 1.2292
  • USDJPY trading at 105.7600
  • USD Index (ICE Sept) trading at 97.885 up 0.104

US Indexes slipped overnight as the market uncertainty continues and the US Bond yield curve inversion deepened. Major Indexes opened up higher but then sold off as traders refocused on the yield curve and a potential recession (refer to the chart below safe haven bond buying data and the 10-year yield). The inversion reflects traders nervousness and the uncertainties over the trade war and is not a sign that they expect inflation or growth to pick up anytime soon. The sentiment was not helped early as data released on consumer confidence was lower and put traders on the back foot from the start. Trumps comments that China had offered to resume trade talks initially buoyed the markets but were at odds with China who said that no contact had been made. The DOW closed down 0.47% while the broader SP500 was down 0.32% and the Nasdaq ended down 0.34%. In Europe, major Indexes ended the session higher as they were supported by a rally in Italian stocks. We expect them to open weaker tonight though as the US fell after the European close.

The USD was initially weak but moved up off the European lows as share market sentiment remained low and traders sought safe haven investments while the Bond Yield curve inversion continued. The Euro continued to trade lower as the Dollar rallied on safe haven buying into the US open and held well within the previous range. The GBP also edged lower through the US session to give up gains made during European trade on the back of positive bank lending data. The AUD continued to come under pressure on trade uncertainty but may be finding some short term buying support around 0.6750. The USDJPY edged lower on Dollar strength during the US session although the move up was offset by safe have Yen buying.

Gold had another positive session as traders continue to seek out the safety of the precious metal. We expect to see higher prices as the trend is well entrenched and buyers are happy to hold through share market rallies showing expectations for further weakness to come in equities. Oil had a solid session as traders expected to see a drop in US inventories. The concern over supply was capped by market uncertainty which held buyers in check. Copper rallied hard during the European session only to give up a lot of the gains during US trade as buyers continued to be hampered by trade concerns.

Cryptocurrencies saw a choppy session to edge lower but overall were happy to reject lower levels. Bitcoin is currently trading at $10160.2 down 1.21% while Ethereum is at $186.08 down 0.28% and Ripple is at $0.26889 down 0.06%.

The ASX200 opened relatively flat yesterday then managed to gain some ground to end the day up 31.1 points to 6471.2. IT was the best performing sector followed by Consumer Discretionary while the Gold sector lagged ending down 3.15%. Rising stocks outnumbered declining ones by 686 to 469 and 367 ended unchanged.

The ASX200 is expected to open down 10 points as sellers come back into the SPI200 overnight. Price is looking heavy so we may see some downward pressure on the market today.

ECONOMIC DATA OUT TODAY (AEST)

AUD Construction Work Done 11:30am

EUR German Consumer Climate and Import Prices 4pm

USD Crude Oil Inventories 12:30am

SPI200 INTRADAY LEVELS TO WATCH