The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)

  • SPI200 (Dec) overnight futures down 6 pts to 6724
  • SP500 down 0.29 pts to 2991.78
  • NASDAQ down 5.21 pts to 8112.46
  • Dow Jones up 14.92 pts to 26,949.99
  • FTSE100 down 18.84 pts to 7326.08
  • DAX30 down 125.68 pts to 12,342.33
  • GOLD futures US Session (December) up $14.40 to $1529.50 an ounce
  • COPPER futures US Session (Comex Dec) up $0.0110 to $2.6180 a pound
  • OIL futures US Session (Nymex Oct) up $0.40 to $58.49 a barrel
  • CRB Index up 1.32 pts to 178.65
  • AUDUSD trading at 0.6775
  • EURUSD trading at 1.0993
  • GBPUSD trading at 1.2431
  • USDJPY trading at 107.5500
  • USD Index (ICE Sept) trading at 98.255 up 0.119

US Indexes started the session on the back foot as they opened weaker after the German PMI data release but did manage a rally into the close to make back the lost ground. All eyes are on the trade war and coming talks between the US and China as US Treasury Secretary Steven Mnuchin insisted that the Trump Administration requested Chinese officials cancel a visit to US farming regions. The announcement seemed to be timed to support the market a few days after the fact which left traders a little skeptical although investors were happy to tread water for the session. The DOW managed to close up 0.06% and the broader SP500 was down 0.01% while the Nasdaq ended down 0.06%. In Europe, Indexes came under pressure after some dismal manufacturing data in Germany. The data unexpectedly showed shrinking activity in manufacturing from the EU’s powerhouse to further pressure the Eurozone economic outlook and dash any hopes that the worst has passed. It seems that the calls for aggressive stimulus from the ECB have been warranted.

The USD rallied being lifted by the data out from Germany as traders are attracted to its high yield relative to other major currencies and the strength in the US economy. The EURO came under pressure as price dropped around 50 pips thanks to the negative PMI data release. Price managed to bounce back off the lows but remains heavy as sellers prep for another push lower potentially to test down to the 1.0930 zone. The GBP also came under pressure at the start of the European session as traders looked for signs of progress in Brexit talks and awaited a Supreme Court ruling on whether Prime Minister Boris Johnson misled Queen Elizabeth over his reasons for suspending parliament this month. The AUD found some buyers to provide some support in a narrow range session as price is well extended off recent highs around 0.6890 and sellers lock away some gains. The USDJPY fell on the open of the European session even as the USD rallied as traders sought the safety of the YEN.

Gold was holding highs from the Asian session when price got a boost as safe haven traders continued to push for new highs after the disappointing German data. Oil also came under pressure after the Data release raised concerns for future demand. The commodity initially spiked down through the 57.50 level only to rebound into the US close. Copper initially come under pressure but then managed to rally hard just prior to the US open which we suspect was due to shorts getting squeezed and having to close out positions as the daily price action finds support.

Cryptocurrencies pushed lower overnight with Bitcoin coming under pressure with the current price trading at $9752.5 down 2.71%. Ethereum is also under some pressure off recent highs and is trading at $203.77 down 2.49% while Ripple is hanging in there at $0.27473 up 0.40%.

The ASX200 came out of the gates yesterday to trade up 40 points on the open after expectations were for a flat start to the session. In the end the Index found some sellers into the close and ended up only 18.9 points to 6749.7. The Emerging Companies, Healthcare and Energy Sectors were the best performers while only three sectors finished slightly in the red. Rising stocks outnumbered declining ones by 685 to 522 and 354 ended unchanged.

The ASX200 is expected to open down 5 points after the SPI200 saw some choppy action overnight but managed to bounce back from lows into the US close.

ECONOMIC DATA OUT TODAY (AEST)

JPY Flash Manufacturing PMI 10:30am

JPY BOJ Gov Kuroda Speaks 3:30pm

EUR German Ifo Business Climate 6pm

GBP Public Sector Net Borrowing 6:30pm

USD Consumer Confidence 12am

SPI200 INTRADAY LEVELS TO WATCH