TRADESETUP

October 11, 2019

The Morning Jumpstart

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OVERNIGHT MARKET SNAPSHOT (as at 7:30am AEDT)

  • SPI200 (Dec) overnight futures up 42 pts to 6571
  • SP500 up 18.73 pts to 2938.13
  • NASDAQ up 47.04 pts to 7950.78
  • Dow Jones up 150.66 pts to 26,496.67
  • FTSE100 up 19.86 pts to 7186.36
  • DAX30 up 69.94 pts to 12,164.20
  • GOLD futures US Session (December) down $14.30 to $1498.50 an ounce
  • COPPER futures US Session (Comex Dec) up $0.040 to $2.6080 a pound
  • OIL futures US Session (Nymex Nov) up $1.07 to $53.66 a barrel
  • CRB Index up 0.51 pts to 173.58
  • AUDUSD trading at 0.6760
  • EURUSD trading at 1.1006
  • GBPUSD trading at 1.2445
  • USDJPY trading at 107.8600
  • USD Index US Session (ICE Dec) trading at 98.405 down 0.410

US Stock Indexes remained ‘headline driven’ and rallied on fresh hopes of a trade deal as investors brushed aside the negativity that engulfed the markets during the Asian session. Traders are now expecting at least a partial deal to be made which was enough to trigger a risk on mood into share markets. Negotiations so far have hinted that enough common ground may be found to delay a US tariff hike scheduled for next week. Traders are hopeful the agreements may be made on currency and copyright protection issues which may lay the groundwork for the bigger deal. Also supporting the bulls was a tweet from Trump saying that he is meeting Chinese Vice Premier Liu He on Friday which eased fears the Chinese delegations were going to cut short talks. The DOW closed up 0.57% while the broader SP500 was up 0.64% and the Nasdaq ended up 0.60%. In Europe, Indexes also found buyers on the hopes that trade talks are finally taking steps in the right direction. Trade sensitive commodity stocks rallied along with Banks and retailers. The FTSE was supported on news that the UK and Irish Prime Minsters said they saw a pathway to a possible Brexit deal.

The USD moved lower as safe haven demand for the currency eased and recent buyers decided to lock away some gains as optimism for at least a partial deal increased. The EURO rallied on trade deal news as it will be supportive of European assets. The GBP took off on the back of news on a potential Brexit deal by the end of October. In a meeting between the Irish and UK PMs’s, positivity was high suggesting it may be possible that the UK can leave the EU in an orderly fashion. The AUD rallied along with the other majors as the USD fell and news gave reason for buyers to hold out hope for a major trade deal. The USDJPY also saw one way traffic from buyers as price headed higher on YEN weakness as the safe haven currency headed lower compared to the Dollar.

Gold took a hit as buyers stood aside while sellers pressured price lower as safe haven assets were sold off. Oil rallied being supported by trade war hopes and also as OPEC may look to cut production further. Copper had a positive response to trade negotiation news as buyers stepped up the pressure on sellers from the Asian session until the close of the US.

Cryptocurrencies took a breather to end generally lower with Bitcoin trading at $8562.5 down 0.20%. Ethereum is currently trading in the green up 0.06% at 191.65 while Ripple came under a little pressure and is at $0.27231 down 3.20%.

The ASX200 saw a very news driven choppy session yesterday as trade related headlines had investors in a spin. Markets were initially looking to open stronger then a headline out of China sent the DOW down 300 points prior to the ASX open. In the end the Index ended up 0.4 of a point at 6547.1. Falling stocks outnumbered advancing ones by 603 to 476 and 322 ended unchanged.

The ASX200 is expected to open up 45 points as the SPI200 along with the US into the close. Expect commodity stocks to find some buyers today as the weaker USD supported commodity prices.

ECONOMIC DATA OUT TODAY (AEDT)

JPY M2 Money Stock 10:50am

EUR German Final CPI 5pm

CNY New Loans 11th-14th

EUR ECOFIN Meetings All Day

CAD Employment Change and Unemployment Rate 11:30pm

USD Prelim Consumer Sentiment and Inflation Expectations 1am

USD FOMC Member Rosengren Speaks 4:15am

SPI200 INTRADAY LEVELS TO WATCH

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