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OVERNIGHT MARKET SNAPSHOT
- SPI200 (Dec) overnight futures up 34 pts to 6615
- SP500 up 32.14 pts to 2970.27
- NASDAQ up 106.26 pts to 8057.04
- Dow Jones up 319.92 pts to 26,816.59
- FTSE100 up 60.72 pts to 7247.08
- DAX30 up 347.45 pts to 12,511.65
- GOLD futures US Session (December) down $12.20 to $1488.70 an ounce
- COPPER futures US Session (Comex Dec) up $0.009 to $2.6230 a pound
- OIL futures US Session (Nymex Nov) up $1.15 to $54.70 a barrel
- CRB Index up 2.46 pts to 176.04
- AUDUSD trading at 0.6794
- EURUSD trading at 1.1042
- GBPUSD trading at 1.2668
- USDJPY trading at 108.2900
- USD Index US Session (ICE Dec) trading at 98.045 down 0.361
US Stock Indexes had a big close to the week being buoyed by trade hopes as the US and China came to a ‘partial’ agreement to ease market concern. The deal is still not set in stone as it is proposed to be signed within the coming weeks which led to a minor selloff into the US close as some traders see the move as a short term ‘band-aide’. The deal covers agricultural purchases, currency and some aspects of intellectual property protections and was enough to avert a tariff hike this week from the US although there was no mention of tariffs set to rise in Dec. The DOW closed up 1.21% while the broader SP500 was up 1.09% and the Nasdaq ended up 1.34%. In Europe, Indexes also got a boost on the expectations for a trade deal with the heavily export related German DAX rallying 2.9%. Hopes for a clean Brexit also had traders buying up stocks after UK Prime Minister Boris Johnson and his Irish counterpart unexpectedly said that they had found a pathway to a possible deal although will need approval from the British parliament.
The US bond yield curve steepened as the benchmark 10-year note yield rallied on the back of news the the US Fed reserve said it would begin buying about $60 billion per month in Treasury bills to ensure “ample reserves” in the banking system. This caused recent buyers to cut long bets on bonds and sell some holdings back into the market. The move also put pressure on the dollar as a safe haven which helped to boost major USD currency crosses.
The USD again moved lower as safe haven demand for the currency eased. Sellers pressured price through the European session and held the lows through the US session into the close. It will be interesting to see if the currencies can hold onto the gains and continue higher as any deal still has a lot of time before its put down on paper and is will be subject to either part re-negotiating or changing their minds. The EURO rallied on the back of a potential Brexit deal and the move was supported by weakness into the USD. The GBP continued to step higher as the prospect for a Brexit deal gained traction and also gained support from a weakening USD. The AUD continued its move higher as buyers were supported by hopes of a trade deal. The USDJPY also continued on the path of least resistance and moved up as safe haven YEN buyers disappeared.
Gold took another hit as safe haven buyers stepped aside on the prospect of a trade deal. The move lower in the USD may have capped the selling pressure into the precious metal while traders may still see the lack of details into the trade deal as a reason to hold. Oil was supported by the prospect of increasing demand from a potential trade deal. The commodity also got a boost after Iranian media said a state-owned oil tanker had been attacked in the Red Sea near Saudi Arabia which increased the prospects for supply disruptions. Copper had another positive session to follow on from the previous trade day as buyers were happy to jump into the action on the prospects of increasing demand to drag the metal out of its longer term rut.
Cryptocurrencies are still floundering with prices edging lower as they have been sold down in the previous hour. Bitcoin is currently trading at $8246.4 down 0.74% while Ethereum is at $180.51 up 0.44% and Ripple is at $0.27586 up 1.78%.
The ASX200 had a solid end to the week as the index ended up 59.7 points. Traders ended the session with a solid push higher into the close as the Metals and Mining, Materials and Resources sectors led the push up while gold stocks headed lower as safe haven traders sold the precious metal. Rising stocks outnumbered declining ones by 660 to 473 and 325 ended unchanged.
The ASX200 is expected to open up 40 points from Fridays close as the SPI200 followed the US higher as trade tensions eased going into the weekend.
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ECONOMIC DATA OUT TODAY (AEDT)
CNY Trade Balance Tentative
EUR Industrial Production 8pm
CNY New Loans 14th-15th
USD Bank Holiday
CAD Bank Holiday
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SPI200 INTRADAY LEVELS TO WATCH
