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OVERNIGHT MARKET SNAPSHOT (as at 8:30am AEDT)
- SPI200 (Dec) overnight futures up 21 pts to 6765
- SP500 up 4.83 pts to 3091.84
- NASDAQ up 21.81 pts to 8486.09
- Dow Jones flat at 27,691.49
- FTSE100 up 36.90 pts to 7365.44
- DAX30 up 85.14 pts to 13,283.51
- GOLD futures US Session (December) up $1.80 to $1458.90 an ounce
- COPPER futures US Session (Comex Dec) down $0.018 to $2.6460 a pound
- OIL futures US Session (Nymex Dec) down $0.10 to $56.76 a barrel
- CRB Index up 0.39 pts to 179.80
- AUDUSD trading at 0.6841
- EURUSD trading at 1.1009
- GBPUSD trading at 1.2848
- USDJPY trading at 108.9800
- USD Index US Session (ICE Dec) up 0.162 to 98.195
US Stock Indexes opened up strong to push into new all time highs but then failed into the close to end the session flat. Traders were awaiting a speech from Trump on trade and anticipating an announcement on a location for the signing of the phase 1 deal. The speech gave out nothing new and Trump still could not give out any details for a signing location leading traders to guess that a deal is not as close as originally thought and give back the gains from earlier in the session. In the speech Trump did mention that he would raise tariffs on Chinese goods “very substantially” if China does not make a deal with the US. We see this as a hint that things may not be going to plan and expect to see China take this as a passive threat. Trump also took another swipe at the Fed Reserve’s monetary policy decisions and for not cutting interest rates further. The DOW closed up 0.04% while the broader SP500 was down 0.20% and the Nasdaq also ended down 0.13%. In Europe, share indexes ended the session on a positive note as German Investor Sentiment data and some positive earnings reports helped to support the buyers. The data comes ahead of German GDP which is expected to show a technical recession for Europe’s largest economy. Expect to see that the the numbers are already factored into the action and that traders feel that they are through the worst of it and the outlook for the zone is brighter. This may all lead to a push to new highs for the DAX.
The USD was choppy in overnight trade as investors were waiting for Trumps speech and further direction on the phase 1 deal. Unfortunately nothing new was mentioned leaving the USD relatively range bound. The EURO headed lower in the US session after Trump remarks on trade and continued the move it started during the European session. Traders may be starting to factor in further uncertainty on trade and a move into the safety of the USD. The GBP did a bit better than the Euro as buyers supported earlier weakness and helped price finish the US session around the same levels it started in European trade. The AUD continued to struggle as Trumps speech gave no new clues to the phase 1 deal. We feel that if something is not announced soon on the signing of the deal, markets will not be too kind and see that a potential deal is falling apart. The USDJPY moved lower as the YEN started to find some renewed safe haven buying from the start of the European session.
Gold managed to close on a stronger note as safe haven buyers edged into the action in the final hours of US trade. Price earlier tested and rejected the 1450 zone as share markets were strong. Buyers then stepped in as US stock indexes gave up their gains. Crude Oil moved in the opposite direction to gold as earlier gains gave way to selling pressure as Trump failed to give any update on the trade deal. Price action has been choppy and range bound above 56.50 and capped around 57.60 as traders try to decipher news on trade and what may eventuate for demand into oil. Copper continued to be pressured lower by the sellers as buyers patients wears thin. Expect to see lower prices as the trend down continues with the lack of positive news on the trade deal.
Cryptocurrencies held their ground overnight with prices hovering around breakeven. Bitcoin is currently trading at $8762.3 down 0.01% while Ethereum is at $186.14 down 0.18% and Ripple is trading at $0.27113 down 1.77%.
The ASX200 started the session yesterday with gains but was then immediately sold off to spend the remainder of the day in the red. At the close the index ended down 19.5 points to 6753 with the IT sector being the only real gainer along with Consumer Staples. The healthcare sector was the weakest but that followed on from solid gains the prior session. Falling stocks outnumbered advancing ones by 645 to 499 and 337 ended unchanged.
The ASX200 is expected to open up 20 points after the SPI200 rallied in the overnight session. It will be interesting to see if the strong open succumbs to selling again as in yesterdays session.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD Wage Price Index 11:30am
NZD Official Cash Rate and Rate Statement 12pm
EUR German Final CPI 6pm
GBP CPI 8:30pm
EUR Industrial Production 9pm
USD CPI Data 12:30am
USD Fed Chair Powell Testifies 3am
USD Federal Budget Balance 6am
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SPI200 INTRADAY LEVELS TO WATCH
