OVERNIGHT MARKET SNAPSHOT
- SPI200 (Dec) overnight futures up 25 pts to 6671
- SP500 up 29.35 pts to 3066.91
- NASDAQ up 94.04 pts to 8386.40
- Dow Jones up 301.13 pts to 27,347.36
- FTSE100 up 54.04 pts to 7302.42
- DAX30 up 94.26 pts to 12,961.05
- GOLD futures US Session (December) down $3.40 to $1511.40 an ounce
- COPPER futures US Session (Comex Dec) up $0.024 to $2.6620 a pound
- OIL futures US Session (Nymex Dec) up $2.02 to $56.20 a barrel
- CRB Index up 3.38 pts to 180.27
- AUDUSD trading at 0.6904
- EURUSD trading at 1.1166
- GBPUSD trading at 1.2946
- USDJPY trading at 108.1900
- USD Index US Session (ICE Dec) down 0.136 to 97.018
US Stock Indexes were pushed higher into the close for the week as US employment data came out stronger than expected. Jobs data showed that growth slowed less than originally expected and previous months were revised up which continues to show a strong labour market and put traders in the right frame of mind going into the start of the US session. Optimism over US/China trade talks also helped to lift the sentiment into the weekend as it seems that buyers can not be stopped. The DOW closed up 1.11% while the broader SP500 was up 0.97% and the Nasdaq also ended up 1.13%. In Europe, Indexes ended their respective sessions on a positive note as US employment data was released. The major indexes were relatively contained prior to the release but then managed to spike into the close to end with solid gains.
News over the weekend on trade should help to support markets this week as press releases from both the US and China suggest that recent talks made some key progress. The Chinese Commerce Ministry said the world’s two largest economies had reached “consensus on principles” during a “serious and constructive” telephone call between their main trade negotiators. Agreements on agriculture, financial services and currency were nearly completed, and there had been ‘excellent progress’ on intellectual property theft issues although this key sticking point may be pushed back to a phase 2 deal out of an expected 3 phases to complete the final trade deal.
The USD continued to find some sellers as the appeal of the dollar as a safe haven diminished on continued US labour market strength, trade deal hopes and expectations that a recession is no longer on the cards. The EURO was buoyed by weakness in the USD but continued to find resistance at 1.1180 which we expect to see broken in the near term on the back of further USD selling. The GBP struggled even as the USD fell as price was capped at 1.2975 and retested 1.2925 minor support into the close Friday. The AUD is looking good as the dollar weakness and positive trade news lifted the buying into the pair. Price has pushed up off the 0.6890 zone and looks set for a run up to 0.6965. The USDJPY was pretty resilient after the US employment data release as recent safe haven YEN buyers sold out to close positions and buoy the currency pair.
Gold held up well considering the risk on mood into equities. The action was choppy but recent safe haven buyers were happy to remain long as the precious metal found support from the weaker USD. Crude Oil rallied after news that US and Chinese negotiators had made ‘enormous progress’ towards reaching the phase 1 deal. Price cleared straight through previous lower highs and is now on its way up to test highs at 56.85. We expect that further positive trade talk will continue to provide buy support for Oil. Copper was also supported through the US session as traders expect to see a lift in demand once trade issues are sorted out.
Cryptocurrencies backed off over the weekend but continue to hold onto recent gains from the spike higher on the 25th Oct. Bitcoin is currently trading at $9162.0 down 1.63% while Ethereum is at $180.83 down 1.58% and Ripple is a little weaker at $0.29010 down 2.19%.
The ASX200 had a good session Friday to close out the week as price fought back from a negative open to end with some minor gains. The Index closed at 6669.1 up 5.7 points after being down around to 30 points on the open. Better than expected Chinese manufacturing data helped to support buyers during the session into the close. The Gold sector well outperformed the rest with Healthcare then energy being the next best performers. Rising stocks outnumbered declining ones by 573 to 558 and 343 ended unchanged.
The ASX200 is expected to open up 25/30 points as the US closed out the week with solid gains and dragged the SPI200 higher from the day session close.
ECONOMIC DATA OUT TODAY (AEDT)
AUD Retail Sales 11:30am
EUR German Final Manufacturing PMI 7:505pm
EUR Final Manufacturing PMI 8pm
USD Factory Orders 2am
SPI200 INTRADAY LEVELS TO WATCH