The Morning Jumpstart

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

  • SPI200 (Dec) overnight futures down 22 pts to 6617
  • SP500 down 9.21 pts to 3037.56
  • NASDAQ down 11.62 pts to 8292.36
  • Dow Jones down 140.46 pts to 27,186.69
  • FTSE100 down 82.40 pts to 7248.38
  • DAX30 down 43.44 pts to 12,866.79
  • GOLD futures US Session (December) up $17.80 to $1514.50 an ounce
  • COPPER futures US Session (Comex Dec) down $0.047 to $2.6390 a pound
  • OIL futures US Session (Nymex Dec) down $0.90 to $54.16 a barrel
  • CRB Index down 1.42 pts to 176.89
  • AUDUSD trading at 0.6893
  • EURUSD trading at 1.1150
  • GBPUSD trading at 1.2945
  • USDJPY trading at 108.0100
  • USD Index US Session (ICE Dec) down 0.324 to 97.115

US Stock Indexes ended the session lower as trade concern again reared its ugly head. Strong earnings from Apple and Facebook could not support the action after a news report said that China is doubtful of a comprehensive long-term trade deal with US. Trump countered the negative news by saying that the two countries will announce a site and time for signing of the ‘phase 1’ trade deal. Buyers seemed to have run out of steam as all the positive news was already factored into the price at current highs so were tentative to put on further risk with no supporting news flow. The DOW closed down 0.52% while the broader SP500 was down 0.30% and the Nasdaq also ended down 0.14%. In Europe, Indexes also came under pressure from trade concerns as miners, oil and gas producers and manufacturers were lower warning that uncertain economic conditions will slow progress and hamper growth.

Trump is again talking up the benefits to trade of a weaker USD and how further rate cuts will lower the dollar. Unfortunately that may not be the case as the dollar trades at roughly the same levels as at the start of the year and that is after three cuts from the Fed Reserve. All the pressure on Powell is showing to be in vane as the safety of the USD will continue to drag in buyers. If the market will have a sudden down tick due to trade war fears and other geopolitical concerns, then the dollar will be supported and adding to that the US economy doing better than Europe, will lead traders to park funds in the dollar in search of yield. In my opinion, if Trump is talking up further rate cuts then he has concern for a long term deal to get across the line and needs a weaker dollar…something its seems can only be achieved by putting an end to the trade war.

The USD initially pushed off the lows at the beginning of the US session although buyers could not hold onto gains and price ended back down where it started. The EURO saw a choppy session as price tested previous highs around 1.1180 but then found selling pressure to move lower into the US open only to be later supported by the weaker USD. The GBP did better as price moved up strong in Asian and then European trade through previous highs around 1.2945. Price is now seeing some selling action as recent buyers lock away some gains. The AUD continued the positive move higher through Asian trade to push up to the 0.6930 zone before falling back to retest the 0.6890 area. The USDJPY fell apart on dollar weakness and as a safe haven YEN bid came into the currency pair with the net effect being a drop through 108.100.

Gold lifted on continued dollar weakness and as the trade bogeyman resurfaced. Safe haven buyers lifted their game to jump back into the action with sights on new highs. Employment data out tonight may be the catalyst for gold bulls to continue the march higher as expectations are for a weak number and a rise in the unemployment rate. Crude Oil again moved lower on concern for demand as the trade war takes a turn for the worse. Copper also dropped on trade concerns even as the USD fell as sellers piled into the action.

Cryptocurrencies ended the overnight session relatively flat as Bitcoin holds above the 9000 mark and is currently trading at $9235.2 up 0.38% while Ethereum is at %183.00 down 0.22% and Ripple is trading at $0.29290 down 0.83%.

The ASX200 had another rough day yesterday as price headed lower throughout the session. The Index started the day relatively flat and then pushed lower to end down 26.1 points to 6663.4. The biggest losing sectors for the day were Financials, Energy and Consumer Discretionary. Rising stocks outnumbered declining ones by 593 to 561 and 357 ended unchanged. The Gold sector is expected to be a shining light today after golds rally overnight. Traders will also have concern for the US non-farm payrolls as a weaker than expected number may push the US lower.

The ASX200 is expected to open down 20/25 points as the SPI200 weakness continues through the European and US sessions.

ECONOMIC DATA OUT TODAY (AEDT)

AUD PPI Data 11:30am

CNY Caixin Manufacturing PMI 12:45pm

AUD Commodity Prices 4:30pm

GBP Manufacturing PMI 8:30pm

USD Non-Farm Employment Change and Unemployment Rate 11:30pm

USD ISM Manufacturing PMI 1am

SPI200 INTRADAY LEVELS TO WATCH