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FRIDAY MARKET SNAPSHOT (as at 8:25am AEDT)
- SPI200 (Dec) overnight futures down 16 pts to 6830
- SP500 up 1.07 pts to 3192.52
- NASDAQ up 9.13 pts to 8823.36
- Dow Jones up 31.27 pts to 28,267.16
- FTSE100 up 6.23 pts to 7525.28
- DAX30 down 119.83 pts to 13,287.83
- GOLD futures US Session (Feb Contract) up $0.10 to $1480.60 an ounce
- COPPER futures US Session (Comex Mar) down $0.002 to $2.810 a pound
- OIL futures US Session (Nymex Jan) up $0.63 to $60.84 a barrel
- CRB Index up 0.07 pts to 185.28
- AUDUSD trading at 0.6854
- EURUSD trading at 1.1149
- GBPUSD trading at 1.3130
- USDJPY trading at 109.4900
- USD Index US Session (ICE March) up 0.172 to 96.757
Major US indexes edged higher in overnight trade extending into record levels thanks to strong housing and manufacturing data. Housing starts and Building permits data came in better than expected as to did manufacturing output for November. Lower interest rates are flowing through to business output and economic data with the expectations that this will increase as we see some traction with trade negotiations and a deal in the pipeline. The DOW closed up 0.11% while the broader SP500 was up 0.03% and the Nasdaq ended up 0.10%. In Europe, Indexes were hit by sellers on the idea that the UK may leave the EU without a deal. Reports that PM Boris will use his control of parliament to rule out any extension of the Brexit transition beyond 2020 had recent buyers lock away some gains to be on the safe side. With the little amount of time for negotiations, investors now fear a hard exit. The FTSE managed to hold its ground as the export heavy index benefited from the weakness in the Pound.
The USD saw a choppy European session as price swung from gains to losses and back again on Brexit concerns only to then hold steady through the US session. Buyers continued to support dips and consolidate towards the highs into the US close. The EURO also saw some choppy action on the back of the USD moves although buyers remain happy to support pullbacks and higher levels. The GBP was the main driver of the currency action and reason why the dollar saw a choppy European session as a hard Brexit weighed on the currency and saw recent buyers charge in to lock away gains and pressure the pair lower. The move pretty much sent price back down to where it was trading prior to Boris’s clear cut election win to give back a 400 pip spike. The AUD continued to move lower as expectations of a Q1 rate cut from the RBA are being factored into the action. Also weighing on buyers is the recent strength in the USD and lack of buying into commodity currencies as traders are happy to wait for further clarification on the trade deal. The USDJPY edged lower on strength in the USD compared to the YEN. The pair is finding resistance at the 109.700 level but we expect that the strength into the USD, after positive data and a phase 1 deal, should be supportive of the pair and cap buying into the YEN as a safe haven.
Gold had a rally during the European trade on hard Brexit concerns but then gave the gains back through the US session to end relatively flat. Price has been consolidating around the 1475 level (Spot price) for the last few days. Further USD strength may see some sellers come into the action. Crude Oil continued to drive higher on expectations for increased demand, trading up to the 61.00 level before consolidating into the close of the US. Copper initially spiked higher at the start of European trade only to fade into the US close although buyers continue to stand their ground and hold above a key level around 2.800.
Cryptocurrencies continued to come under pressure from sellers as we see red across the board. Bitcoin is currently trading at $6631.1 down 4.31% while Ethereum is at $123.79 down 7.38% and Ripple is also very weak at $0.18292 down 13.14%.
The ASX200 started the session yesterday with some gains but ran into sellers early as the index faded into the close on profit taking from the previous days rally. In the end the index ended down 2.4 points to 6847.3 saving the push into new highs for another day. The Gold sector was the worst performer down 1.15% being followed by Utilities down 0.89%. Falling stocks outnumbered advancing ones by 566 to 566 and 327 ended unchanged.
The ASX200 is expected to open down 10 points and we expect to see some choppy action as the Dec SPI200 futures contract rolls over to March.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD MI Leading Index 10:30am
JPY Trade Balance 10:50am
EUR German PPI 6pm
EUR ECB President Lagarde Speaks 7:30pm
EUR German Ifo Business Climate 8pm
GBP CPI and PPI Data 8:30pm
EUR Final CPI Data 9pm
CAD CPI Data 12:30am
USD Crude Oil Inventories 2:30am
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SPI200 INTRADAY LEVELS TO WATCH
