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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 7/02/20 8:15am AEDT
- SPI200 (Mar) overnight futures up 13 pts to 6993
- SP500 up 11.55 pts to 3346.24
- NASDAQ up 63.47 pts to 9572.16
- Dow Jones up 88.92 pts to 29,379.77
- FTSE100 up 22.31 pts to 7504.79
- DAX30 up 96.49 pts to 13,574.82
- GOLD futures (April Contract) up $7.10 to $1569.90 an ounce
- COPPER futures (Comex Mar) up $0.022 to $2.596 a pound
- OIL futures US Session (Nymex Mar) up $0.32 to $51.07 a barrel
- CRB Index up 0.93 pts to 170.48
- AUDUSD trading at 0.6729
- EURUSD trading at 1.0982
- GBPUSD trading at 1.2925
- USDJPY trading at 109.9800
- USD Index US Session (ICE March) up 0.202 to 98.360
US Indexes moved into new highs being helped by positive sentiment towards the coronavirus and some further positive earnings reports although the move up was more contained than the previous sessions. Traders are growing more confident that China’s efforts will be enough to contain the economic fallout from the outbreak. The bulls were contained and we saw some minor profit taking into rallies as traders now await US key monthly employment data tonight. In a boost of confidence to bulls, China said that they will halve additional tariffs levied against some US goods. The DOW closed up another 0.30% while the broader SP500 was also up 0.35% and the Nasdaq up 0.67% for the session. In Europe, Indexes were again higher being supported by Chinas tariff news and the refocusing in corporate earnings. The Resources and Technology sectors rallied in European trade as investors grew optimistic over lessening the economic shock to Chinas economy.
In Trump news, he was acquitted in his Senate impeachment trial but it seems that it is not yet over as many are now questioning presidential authority. Three cases will be argued before the Supreme Court focusing on Trump’s contention that a House of Representatives committee and a New York City prosecutor are powerless to enforce subpoenas to obtain his financial records. Lawyers for Trump argued that the Constitution renders sitting presidents immune from all criminal investigations.
The USD Index continued to be supported as traders tolerance for risk increased and funds flowed into US equity markets in search of yield. With Economic data in the US outperforming other major countries, traders are happy to push the limits into US shares expecting the bull run to continue. The EURUSD finally cracked the 1.0990 support zone leading and is holding below the zone increasing expectations for lower levels. The currency pair was weighed down by data showing German industrial orders unexpectedly fell in December. If buyers do not start to soak up the selling pressure the next level down is 1.0890. The GBPUSD also cracked a key support level at 1.2960 on its way lower being pressured by the rally in the USD. The AUDUSD is now starting to react to the USD strength as recent buyers lock away some gains as positive virus news fades. It will be interesting to see if the Aussie can again start to find a bid to build a key higher low for a move up and through 0.6780. The USDJPY story continued as the pair moved higher on positive sentiment into the USD and as the safe haven bid into the YEN exited.
SPOT GOLD managed to find some buyers to push price up off the 1550 zone. We see this as purely a technical move and not a safe haven trade so will be expecting to see further selling pressure to enter if equities continue to rally. Crude Oil pulled back to retest support and found some buyers into the close off the 50.50 zone. We expect that positive global news will continue to be supportive for a further move up. Copper pulled back after a solid rally to extend the gains in the Asian session. Price continues to hold higher levels in a show of strength off key support.
Cryptocurrencies backed up with another positive session as prices generally edged higher. Bitcoin is currently trading at $9753.6 up 1.04% while Ethereum was a standout for the night and is currently trading at $211.92 up 4.61% and Ripple is at $0.28198 up 1.98%.
The ASX200 yesterday got off to another good start and this time around managed to carry the momentum into the close and end up 73.1 points to 7049.2. The leading sector for the session was Energy with Financials and Resources helping to support the action. The Gold sector did better than expected being helped by Alacer Gold and OZ Minerals. Rising stocks outnumbered declining ones by 706 to 495 and 310 ended unchanged.
Trading today may be contained heading into the weekend and ahead of the key US employment data. If the US beat expectations, we may see another run into new highs tonight leading to a positive start to next week.
The ASX200 is expected to open up 10/15 points as the SPI200 finishes on its highs in overnight trade.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD RBA Gov Lowe Speaks 9:30am
AUD RBA Monetary Policy Statement 11:30am
NZD Inflation Expectations 1pm
CNY Trade Balance Data Tentative
EUR German Industrial Production and Trade Balance 6pm
EUR French Industrial Production and Trade Balance 6:45pm
CAD Employment Change and Unemployment Rate 12:30am
USD Non-Farm Employment Change and Unemployment Rate 12:30am
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SPI200 INTRADAY LEVELS TO WATCH
