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OVERNIGHT MARKET SNAPSHOT (as at 8:30am AEDT)
- SPI200 (Dec) overnight futures down 27 pts to 6724
- SP500 up 9.11 pts to 3141.63
- NASDAQ up 37.87 pts to 8654.05
- Dow Jones up 29.58 pts to 27,911.30
- FTSE100 up 2.49 pts to 7216.25
- DAX30 up 76.02 pts to 13,146.74
- GOLD futures US Session (Feb Contract) up $11.50 to $1479.60 an ounce
- COPPER futures US Session (Comex Mar) up $0.026 to $2.792 a pound
- OIL futures US Session (Nymex Jan) down $0.41 to $58.83 a barrel
- CRB Index down 0.67 pts to 181.49
- AUDUSD trading at 0.6879
- EURUSD trading at 1.1134
- GBPUSD trading at 1.3194
- USDJPY trading at 108.5400
- USD Index US Session (ICE Dec) down 0.278 to 97.107
The US share market moved up off the sessions lows ahead of the Feds interest rate announcement to hold onto the gains into the close. The Fed kept interest rates on hold as expected and do not see any need to cut or increase through the upcoming US elections to 2021 as the labour market remains tight and inflation is held in check. Inflationary data was out earlier which came in higher than expected and pointed to a robust economy even under trade pressure. The Feds longer term projections on interest rates did not change and pressured the USD as dollar bulls were looking for a more buoyant outlook. The DOW closed up 0.11% while the broader SP500 was up 0.29% and the Nasdaq ended up 0.44%. In Europe, Indexes ended the session with gains as traders expect that the coming US tariffs will be put on hold and will not trigger retaliation from China. The UK’s FTSE100 index ended the session flat as traders were happy to be risk off ahead of elections.
The Fed Reserve, in their statement, said that they will continue to monitor global developments in deciding whether or not interest rates need to change. The Fed also said that they will keep an eye on muted inflationary pressures which is a sign that the pace of price increases has failed to hit the central bank’s target.
The USD reacted lower on the rate news as it seems that buyers were starting to position themselves long looking for the Fed to talk up economic strength and higher inflation. The dollar is down on key daily support where we would expect a reaction higher. Analysts are not convinced inflation is set to gather steam and remain adamant that the Fed will stay on the sidelines as there is still headwinds to growth. The EURO put the squeeze on sellers as the USD sank after the Feds Statement. The EURUSD looks set to extend the move up to the 1.1175 zone although the USD may bounce off major support at current levels to pressure the Euro bulls prior to hitting the level. The GBP dropped hard after the previous US session close but has now made back the losses thanks to weakness in the USD. Elections will bring in volatility into the pair over the next 24 hours as it slowly becomes clear who will win the elections and what that means to Brexit. The Pound was supported by polls suggesting Boris will have only a modest majority for PM. The AUD took off like a rocket from the start of the European session as bulls started the squeeze on sellers potentially looking to the next round of tariffs to be put on hold. The bulls may continue to press their bets and push price to the 0.6925 zone. The USDJPY sank on the USD weakness and price pushed to support around 108.450 before price reacted higher.
Gold spike higher into resistance towards the end of the US session as the USD sank on rate news. The move was not on the back of safe haven buying and just dollar related which suggests that sellers may take the opportunity to push price lower and the rally be short lived. Aussie gold ended lower as the rally in Gold was not enough to offset the move up in the AUD which may lead to pressure on the local miners. Crude Oil initially spiked lower after inventories came out better than expected but then the bulls stepped back in to support price and make back the lost ground. Copper continued to charge higher ahead of the tariff announcement with the move looking extended at current levels. We expect to see some gains locked away into the weekend.
Cryptocurrencies edge lower as Bitcoin moves down to support which it will need to hold in order to keep the bulls happy. Bitcoin is trading at $7215.0 down 0.41% while Ethereum is at $143.13 down 1.42% and Ripple is at $0.22096 up 0.30%.
The ASX200 opened up well yesterday and then continued the strength into the close with the Index closing up 45.7 points to 6752.6. The best movers for the day were the Utilities and Telecom Services Sectors while Info tech came under pressure. Rising stocks outnumbered declining ones by 567 to 566 and 328 ended unchanged.
The ASX200 is expected to open down 25 points as the SPI200 reacts lower off resistance overnight.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD MI Inflation Expectations 11am
AUD RBA Bulletin 11:30am
EUR German Final CPI 6pm
CHF SNB Monetary Policy Assessment and Rate 7:30pm
GBP Elections All Day
EUR Main Refinancing Rate and Monetary Policy Statement 11:45pm
EUR ECB Press Conference 12:30am
USD PPI Data and Unemployment Claims 12:30am
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SPI200 INTRADAY LEVELS TO WATCH
