OVERNIGHT MARKET SNAPSHOT (as at 7:30am AEDT)
- SPI200 (Dec) overnight futures up 20 pts to 6639
- SP500 up 20.52 pts to 3006.72
- NASDAQ up 73.44 pts to 8162.99
- Dow Jones up 57.44 pts to 26,827.64
- FTSE100 up 13.07 pts to 7163.64
- DAX30 up 114.36 pts to 12,747.96
- GOLD futures US Session (December) down $6.70 to $1487.40 an ounce
- COPPER futures US Session (Comex Dec) up $0.009 to $2.6450 a pound
- OIL futures US Session (Nymex Nov) down $0.34 to $53.44 a barrel
- CRB Index down 1.02 pts to 174.74
- AUDUSD trading at 0.6867
- EURUSD trading at 1.1150
- GBPUSD trading at 1.2962
- USDJPY trading at 108.6100
- USD Index US Session (ICE Dec) up 0.039 to 97.047
US Stock Indexes bounced back from Fridays selloff as traders were buoyed by Trump comments on trade with China. The US President said that talks are going well with China and they expect a phase 1 trade deal to be signed by the middle of next month and says the US tariffs have taken a toll on the Chinese economy which means they ‘need a deal’. The pressure that the trade war has triggered on global growth has done little to stop the bulls as the SP500 is within striking distance of new all time highs. The timing of the deal and some further supportive earnings results could easily see the US into new all time highs before the phase 1 deal is expected. Traders will be gearing up for earnings from Amazon and Microsoft this week. China is still seeking $2.4 billion in retaliatory sanctions against the US for non-compliance with a World Trade Organization ruling. The DOW closed up 0.21% while the broader SP500 was up 0.69% and the Nasdaq ended up 0.91%. In Europe, Indexes started the week on a positive note as traders cling to hope for an orderly Brexit and avoid any market volatility. Buyers were also supported by US/China trade news which added to the upbeat mood and allowed the focus to shift to earnings thanks to some positive corporate updates.
The USD initially came under pressure from waves of optimism into Brexit as the Pound and Euro rallied. Once the US opened for trade buyers stepped into the dollar which found support to rally into the close. The EURO found some early buoyancy from buyers but then faded into the US close as the dollar rallied. The GBP found buyers happy to continue to push price higher during European trade although came under pressure during the US session as the Dollar rallied. The GBP weakness, and dollar strength, was triggered after Britain’s parliament speaker refused to allow a vote on PM Johnsons divorce deal with the EU suggesting that Boris faces further issues with Brexit. The AUD followed along the same lines as the Euro and the Pound to ease lower into the US close although longer term momentum is up. The USDJPY was the reverse of the other majors as price swung from lows to highs through the US session.
Gold again moved lower as price found selling pressure from the rally into the USD and on trade talk. With expectations that a Phase 1 trade deal will be pushed through by mid November, we expect gains into the commodity to be capped unless the news flow on trade turns negative. At this stage, both China and the US want to get something over the line so the positive rhetoric is expected to continue. Crude Oil saw sellers clear out the buyers and attack the support zone around 52.60 which was against the overall positive mood into equities, on a trade deal, suggesting that the Oil market sees a longer timeframe before a lift in demand into the commodity. Copper took the opportunity to rally as the USD fell with buyers in control through the European session but then the selling pressure capped price once the dollar swung in US trade.
Cryptocurrencies seemed to be happy to hold their ground although did edge slightly lower in the 24 hour session. Bitcoin is currently trading at $8197.8 down 0.35% while Ethereum is at $173.13 down 1.37% and Ripple is trading at $0.29133 down 0.21%.
The ASX200 spent the majority of the session yesterday in negative territory only to end up 2.8 points at the close to 6652.5. The Metals and Mining, Resources and Materials sectors were the outperformers while Info Tech ended down 2.2% for the day. Falling stocks outnumbered advancing ones by 592 to 551 and 326 ended unchanged.
The ASX200 is expected to open up 20 points after the SPI200 edged higher along with the US.
ECONOMIC DATA OUT TODAY (AEDT)
GBP Public Sector Net Borrowing 7:30pm
GBP CBI Industrial Order Expectations 9pm
CAD Retail Sales Data 11:30pm
USD Existing Home Sales 1am
CAD BOC Business Outlook Survey 1:30am
USD Federal Budget Balance Tentative
SPI200 INTRADAY LEVELS TO WATCH