The Morning Jumpstart

OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)

  • SPI200 (Dec) overnight futures up 25 pts to 6687
  • SP500 down 7.25 pts to 2977.62
  • NASDAQ down 46.72 pts to 8030.66
  • Dow Jones down 79.59 pts to 26,891.12
  • FTSE100 up 61.09 pts to 7351.08
  • DAX30 up 54.36 pts to 12,288.54
  • GOLD futures US Session (December) down $0.60 to $1511.70 an ounce
  • COPPER futures US Session (Comex Dec) down $0.0360 to $2.5760 a pound
  • OIL futures US Session (Nymex Nov) up $0.05 to $56.54 a barrel
  • CRB Index down 0.41 pts to 176.23
  • AUDUSD trading at 0.6749
  • EURUSD trading at 1.0920
  • GBPUSD trading at 1.2323
  • USDJPY trading at 107.8300
  • USD Index (ICE Dec) trading at 98.812 up 0.153

US Indexes moved lower into the close of the session as the pressure for a Trump impeachment gathered momentum. The Yields on the benchmark US 10-year Note fell as safe haven buyers dipped their toes back into the action. Trade concerns also remained front and center as markets whipped between gains and losses on the back of comments out from China and the US. Prices were initially pressured on the open as news out said the US was unlikely to extend a waiver over Huawei’s blacklisting. Indexes then managed to gain back some lost ground as China announced they were willing to buy more US products and that trade talks would yield results if ‘both sides take more enthusiastic measures to show goodwill’. The DOW closed down 0.30% while the broader SP500 was down 0.24% and the Nasdaq ended down 0.58%. In Europe, Indexes had a positive session as buyers were supported by comments from the Chinese commerce ministry saying the US and China were making preparations to ensure ‘positive progress’ during the next round of trade talks.

The US Commerce Department reported that business investment contracted more sharply than previously estimated in the second quarter and corporate profit growth was lukewarm. The soft investment and sluggish profit gains could cast doubts over consumers ability to continue to drive the markets higher under the never ending trade war headwinds.

The USD again moved higher against a basket of major currency pairs as bond yields fell and tightness in the US money markets helped support buyers. The ongoing saga with Brexit and efforts by US Democrats to impeach Trump is likely to keep the USD in demand as a safe haven and as FX traders search for yield. The EURO continued to come under pressure as price pushes below key support around 1.0925. We expect to see price extend this level as buyers are put under further pressure. The GBP continued lower as price now looks set to test support around 1.2300 in search of buyers. The AUD initially spiked higher into the US session open but then saw sellers jump back into the action after the open and send price back down to finish on its lows as trade comments continue to churn traders. The USDJPY initially came under some pressure during the Asian and US session but then managed to find some buyers into the USD once the US session opened.

Gold managed to hold a bid and end flat after the previous sessions fall as safe haven traders bailed on the precious metal. We are now watching to see what the latest trade and Impeachment news will do to price action and whether support will be found around current levels. Oil continued to find some selling pressure during the session as Saudi Arabia’s move to restore output is expected to bring more supply online. Copper spiked into previous lows as mixed messages on the trade war from the US and China had investors concerned for the speed that a trade deal can be reached.

Cryptocurrencies again moved lower as buyers came under pressure with Bitcoin trading at 8025.9 down 5.95%. Ethereum is currently trading at $161.61 down 4.72% while Ripple is also lower trading at $0.23893 down 2.39%.

The ASX200 yesterday shrugged off the positive move overnight in the US and proceeded to move lower throughout the session and hold the losses into the close. In the end the index ended down 32.6 points to 6677.6 with the Gold, Telecom Services and Utilities being the biggest drag on the action. Falling stocks outnumbered advancing ones by 627 to 533 and 372 ended unchanged.

The ASX200 is expected to open up 25 points after the SPI200 bounced off the days lows overnight.

ECONOMIC DATA OUT TODAY (AEST)

JPY Tokyo Core CPI 9:30am

EUR German Import Prices 4pm

GBP MPC Member Saunders Speaks 5pm

USD Durable Goods Orders and Personal Spending and Income 10:30pm

USD Revised Consumer Sentiment and Inflation Expectations 12am

SPI200 INTRADAY LEVELS TO WATCH