OVERNIGHT MARKET SNAPSHOT
- SPI200 (Dec) overnight futures up 35 pts to 6498
- SP500 up 41.38 pts to 2952.01
- NASDAQ up 110.21 pts to 7982.47
- Dow Jones up 372.68 pts to 26,573.72
- FTSE100 up 77.74 pts to 7155.38
- DAX30 up 87.56 pts to 12,012.81
- GOLD futures US Session (December) down $0.90 to $1512.90 an ounce
- COPPER futures US Session (Comex Dec) up $0.0110 to $2.5640 a pound
- OIL futures US Session (Nymex Nov) up $0.36 to $52.81 a barrel
- CRB Index up 0.09 pts to 173.49
- AUDUSD trading at 0.6771
- EURUSD trading at 1.0971
- GBPUSD trading at 1.2331
- USDJPY trading at 106.9400
- USD Index US Session (ICE Dec) trading at 98.510 down 0.030
US Indexes finished off a volatile week with a bang after employment data showed the unemployment rate unexpectedly fell giving traders hopes that the bull market is back on track as bargain hunters put the squeeze on sellers. Even as the data showed that the number of new jobs were lower than expected, it was still plenty to keep up with labour market growth and not indicating that the weakness in manufacturing is spilling over into consumer spending which accounts for around 70% of the US economy. Trumps issues continue to heat up as another ‘whistleblower’ came forward to pressure for an impeachment. The DOW closed up 1.42% while the broader SP500 was up 1.42% and the Nasdaq ended up 1.40%. In Europe, Indexes were lifted into the close on the back of the positive US jobs data and an easing in fears of a sharp slowdown in the worlds largest economy. Sentiment was lifted which brought in the bargain hunting after a few days of selloffs.
The US employment data showed that there are still headwinds to the economy as wage growth stagnated and manufacturing payrolls declined for the first time in six months while the retail and utilities sectors also continued to lose jobs. The unemployment rate usually rises ahead of a recession so any bears may still have some time to wait if fears that the US is flirting with a recession are correct. The data release has now reduced the number of expected rate cuts to one from two by the years end.
The USD lifted on the back of the employment data although gave up most of the gains into the close as FMOC member Bostic and Fed Chair Powell highlighted continued headwinds for the economy leaving traders uncertain for the course of interest rates this year. The move in the dollar also highlights investors ongoing concerns over trade negotiations with China and current political risk. The EURO was choppy after the data release but managed to hold onto recent gains into the close and build a minor bid zone around 1.0962. The GBP was already under pressure ahead of the data release and testing recent lows which held as the USD fell later in the US session of give the GBP some relief. The AUD saw a slow and steady grind higher as longer term sellers took some gains off the table ahead of coming trade negotiations later in the week between the US and China. The USDJPY continued to come under pressure as the USD sold off into the close and the YEN was bought up as US political uncertainty continues.
Gold held up relatively well although in the medium term may come under pressure if US economic data continues to hold up. Buyers were supported by the fall in the dollar into the US close. Oil continues to look weak in the short term as sellers hold lower levels although buyers were happy to lift price up on a spike lower showing some signs that bulls are getting active although a test of 50.50 is still on the cards. Copper had a good session as buyers lifted price off lows around 2.5310 in hopes that the US and China may come to some arrangement after Trump announces that a deal could be done (which has been a tactic in the past ahead of other meetings).
Cryptocurrencies again moved lower as sellers do not look finished as yet. Bitcoin is currently trading at $7911.9 down 2.29% while Ethereum is trading at $171.09 down 2.12% and Ripple is at $0.25275 up 0.71%.
The ASX200 had a better session to end the week as sellers were happy to stand aside and the Index managed to end up 24.1 points to 6517.1. All sectors generally ended the day in the green with Healthcare and IT leading the charge. Rising stocks outnumbered declining ones by 627 to 475 and 380 ended unchanged.
The ASX200 is expected to open up 50 points as the SPI200 rallied with US markets bouncing back on the positive employment data.
ECONOMIC DATA OUT TODAY (AEDT)
AUD Bank Holiday (ASX Open) All Day
EUR German Factory Orders 5pm
USD Fed Chair Powell Speaks 4am
SPI200 INTRADAY LEVELS TO WATCH