OVERNIGHT MARKET SNAPSHOT (as at 7am AEST)
- SPI200 (Dec) overnight futures up 35 pts to 6498
- SP500 up 23.02 pts to 2910.63
- NASDAQ up 87.02 pts to 7872.27
- Dow Jones up 122.42 pts to 26,201.04
- FTSE100 down 44.90 pts to 7077.64
- DAX30 Closed
- GOLD futures US Session (December) up $3.20 to $1511.10 an ounce
- COPPER futures US Session (Comex Dec) down $0.0170 to $2.5540 a pound
- OIL futures US Session (Nymex Nov) down $0.33 to $52.31 a barrel
- CRB Index up 0.46 pts to 173.41
- AUDUSD trading at 0.6742
- EURUSD trading at 1.0967
- GBPUSD trading at 1.2334
- USDJPY trading at 106.9000
- USD Index US Session (ICE Dec) trading at 98.637 down 0.052
US Indexes bounced back from the recent beating to gain back some lost ground overnight ahead of key employment data. The major indexes managed to find some bargain hunters happy to jump in after a spike lower on the back of news that sent the DOW down over 300 points in 10 minutes. The data release at 12am AEST showed that services sector growth is slowing on tariff concerns and suggests the trade war is spilling over into the broader economy. The data lifted expectations for further rate cuts from the Fed at the end of the month to buoy the economy so all eyes will be on the employment data out tonight which is expected to show 140k new jobs. The trend for job growth has been lower as unemployment rates hover below what is considered full capacity. The DOW closed up 0.47% while the broader SP500 was up 0.80% and the Nasdaq ended up 1.12%. In Europe, Indexes were relatively flat although the FTSE ended weaker as they continue to digest news of Trumps new tariffs on the EU. The DAX was closed for the session so traders will be eager to position themselves for the US payroll number which comes out prior to the European close.
The US employment data out tonight is essential to traders and they will be watching the release closely. If expectations are not met and the release shows further slowing in job creation, expectations will be for a flow on into consumer spending. This all means that the economy will come under pressure and inflation would ease which will trigger the US Fed to think seriously about a rate cut cycle. It will be interesting to see how the majority of investors position themselves…will they buy on stimulus expectations or see the potential effect on upcoming corporate earnings as too negative and move to cash. Slowing global growth will continue to put the RBA in the local spotlight for further cuts which may or may not have the desired affect and support the ASX200 in the near term.
The USD again came under pressure and spiked lower after the data release. Buyers took it as an opportunity to jump in on the expectations that the Fed will be forced to cut rates. The weaker manufacturing and services sector data dampened assumptions that the US would continue to outperform other major economies. The EURO was already moving higher and got a boost from the data release and spike in the USD although gave up a lot of the gains into the US close. The GBP finally managed to break up and through the 1.2335 zone as buyers start to put the squeeze on the sellers. The AUD moved up off a key buy zone around 0.6672 and could extend the move up to 0.6780. The USDJPY continues to come under pressure as the USD weakened.
Gold continued the move higher but gave up a lot of the gains into the US close as share markets rallied. An weaker than expected data release tonight could bring in more safe haven buyers into the precious metal. A push up through $1520 (on the futures contract) and hold above this level will open up a move to retest $1540. Oil continues to struggle as sellers hold lower levels. Price now looks set to test lows around $50.50. Copper remains choppy and biased lower until traders see a shift in global demand that can support price.
Cryptocurrencies edged lower as they search for a base to build a move up. Bitcoin is currently trading at $8142 down 1.06% while Ethereum is at $172.50 down 2.56% and Ripple is at $0.24540 down 1.76%.
The ASX200 had another day to forget as the Index came under fire right from the open yesterday and the sellers kept the pressure on until the close. The Index finished down 146.9 points to 6493 with all sectors ending well in the red except for Gold. The biggest hit was to the Telecom Services, Energy then Financials sectors. Trade Balance data came in weaker than expected as Exports fell more than imports. Falling stocks outnumbered advancing ones by 814 to 343 and 360 ended unchanged.
The ASX200 is expected to open up 35 points after the SPI200 managed to finish higher thanks to the bounce in the US.
ECONOMIC DATA OUT TODAY (AEST)
CNY Bank Holiday All Day
AUD HIA New Home Sales Tentative
AUD Retail Sales and RBA Financial Stability Report 11:30am
AUD RBA Assist Gov Ellis Speaks 12pm
CAD Trade Balance 10:30pm
USD Non-farm Employment Change and Unemployment Rate 10:30pm
USD Fed Chair Powell Speaks 4am
SPI200 INTRADAY LEVELS TO WATCH