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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 3/03/20 (as at 8:15am AEDT)
- SPI200 (Mar) overnight futures up 69 pts to 6413
- SP500 up 133.13 pts to 3087.35
- NASDAQ up 384.80 pts to 8952.16
- Dow Jones up 1293.96 pts to 26,703.32
- FTSE100 up 74.28 pts to 6654.89
- DAX30 down 32.48 pts to 11,857.87
- GOLD futures (April Contract) up $20.30 to $1587 an ounce
- COPPER futures (Comex May) up $0.070 to $2.610 a pound
- OIL futures US Session (Nymex Apr) up $2.61 to $47.37 a barrel
- CRB Index up 4.05 pts to 163.50
- AUDUSD trading at 0.6525
- EURUSD trading at 1.1129
- GBPUSD trading at 1.2763
- USDJPY trading at 108.4100
- USD Index US Session (ICE March) down 0.534 to 97.547
US Indexes bounced back in a big way with a rally that started in the Asian session with traders ‘buying the dip’ and finally getting on the right side of the action. Traders are betting that the US Fed Reserve will cut rates to support the market after the Feds comments Friday which were reiterated by the Bank Of Japan Monday who said that they would take necessary steps to stabilize financial markets. Traders are now looking for a 50 basis point rate cut at the US Federal Reserves March meeting. Analysts see that markets can shrug off an economic downturn but if it flows over into companies ability to pay their debts then that is a major problem so central banker will need to come together to protect credit markets. The problem still remains on the supply chain and whether the coronavirus will continue to affect the workforce and what damage that it has caused in manufacturing. The DOW powered up 5.09% while the broader SP500 was also up 4.51% while the Nasdaq ended up 4.49% for the session. In Europe, major Indexes steadied but did not see the rally which played out in the US. We may expect the DAX and FTSE to play catchup tonight if the Asian session is again positive. Traders in Europe may be more skeptical on potential stimulus from the ECB as they are already at negative and a potential 10 basis point cut may have little effect. Italy continues to weigh on Europe as the death toll rose from 34 to 52 within 24 hours and continued to batter local stocks even after the government said that they will introduce stimulus. Britain and the EU are expected to start talks on Brexit and say they want to reach a deal by the end of the year.
The USD Index continued to move lower as the carry trade continued to unwind and as traders bet on deep interest rate cuts from the Federal Reserve. US Bond yields hit lows during the session before bond prices fell back into the close. The EURUSD continued to gain on the back of the dollar weakness and blasted through the 1.1100 resistance zone and looks set to test up to 1.1240. The GBPUSD continued to be pressured by Brexit against the flow of the USD and retested support around the 1.2770 area. The AUDUSD managed to gain some traction to push higher although price still looks weak and we expect that traders are still awaiting data on global manufacturing and supply chains before pressuring recent sellers. The key anchor for the move down is around the 0.6590 zone which looks like holding for now. The USDJPY found support from safe haven YEN selling pressure to offset the dollar weakness.
SPOT GOLD was on its way up on bargain hinting during the Asian and European sessions but then the tide turned and sellers pressured prices lower through US trade. We expect that price has a lot of work to do before bringing in the bulls for a run up. Crude Oil did better as shorts were squeezed out of the action on hopes that OPEC will cut supply levels. Copper traded well as buyers spiked price up off support to end the session on highs. This is a good sign for copper as bulls look set to defend support.
Cryptocurrencies continued to edge higher following on from the weekends gains. Bitcoin is currently trading at $8877.5 up 3.82% while Ethereum is at $231.58 up 6.57% and Ripple is at $0.23971 up 5.32%. Crypto bulls are still hoping that we have seen the bottom and will be watching current support levels on Bitcoin at $8420 to hold for a new leg up.
The ASX200 gave some relief for buyers as the Index pushed up strong off the lows yesterday which were made early in the session. The Index was down around 190 points at one stage before a rally in global Indexes led to the ASX200 bounce to end down only 49.7 points to 6391.5. Gold stocks bounced hard triggering buyers to load up looking for a move up in Spot Gold. The Energy sector was up 1.14% while IT was up 0.85% but Financials were down 1.49%. The moves look a lot like bargain hunting into heavily oversold sectors. Falling stocks outnumbered advancing ones by 921 to 398 and 293 ended unchanged.
The ASX200 is expected to open up 65 points as the US bounces back on stimulus hopes. Trader may be contained before the RBA Rate announcement today where expectations are for a cut.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD Building Approvals and Current Account 11:30am
AUD Cash Rate and RBA Statement 2:30pm
GBP BOE Gov Carney Speaks 8:30pm
EUR SPI Flash Estimate, PPI Data and Unemployment Rate 9pm
USD FOMC Member Mester Speaks 6:50am
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SPI200 INTRADAY LEVELS TO WATCH
