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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 10/03/20
- SPI200 (Mar) overnight futures down 273 pts to 5432
- SP500 down 225.81 pts to 2746.56
- NASDAQ down 624.94 pts to 7950.68
- Dow Jones down 2013.76 pts to 23,851.02
- FTSE100 down 496.78 pts to 5965.77
- DAX30 down 916.85 pts to 10,625.02
- GOLD futures (April Contract) up $6.80 to $1679.20 an ounce
- COPPER futures (Comex May) down $0.074 to $2.486 a pound
- OIL futures US Session (Nymex Apr) down $11.07 to $30.21 a barrel
- CRB Index down 11.03 pts to 144.81
- AUDUSD trading at 0.6588
- EURUSD trading at 1.1445
- GBPUSD trading at 1.3112
- USDJPY trading at 102.2700
- USD Index US Session (ICE March) down 0.867 to 95.067
US Indexes sank overnight as an Oil price war triggered markets into a selling frenzy yesterday. Oil price dropped around 30% at one stage after the open for trade in the Asian session sending stock indexes plunging as fear gripped financial markets. The US DOW and Emini futures contract went into ‘limit down’ (where trading is halted for a period of time to try and calm markets) a few times during the Asian session and then later in the European session. Bond yields plunged to new lows as the US 10-year treasury pushed below 0.5% and the 30-year fell under 1%. Adding to the fear over the weekend was news that the Industrial North of Italy went into lockdown as the virus spread and the death toll rose. The DOW was beaten down 7.79% while the broader SP500 was down 7.60% and the Nasdaq ended down 7.29% for the session. In Europe, major stock Indexes were again hit hard as fears of further pressure from the Oil price war add to concerns from the coronavirus that will trigger a global economic shock on a hit to global trade.
The move lower in Oil has Central bankers concerned as lower prices will drag on inflation and effect targeted inflationary levels for economic growth. For companies with big energy bills and consumers, lower priced oil for longer will be a benefit. The problem may be the fear that has been generated from the global market meltdown so any benefit from consumers and spending will be muted. A large share of US capital spending is associated with the energy industry, and at the current oil price, investment in drilling and exploration will be put on hold. Traders will be expecting further rate cuts from the US Fed to try and stimulate spending.
The USD Index continued to slide as bond yields dropped and share indexes plunged. The Currency did find some minor buying support as many will expect the move lower in share markets to be overdone. Problem now is expectations for further interest rate cuts which will cap buying into the Dollar. The EURUSD rallied from the Asian session open as the the USD fell. The spike up continued and pushed price up through 1.1400 with resistance levels proving to be useless in the current fear driven climate. The GBPUSD also continued to rally with price spiking hard on the open of the European session. The AUDUSD came under fire on the open of the Asian session with close to a 300 pip drop around midday. Buyers quickly bought the spike lower but the currency struggled to hold onto any gains made from the weakness into the USD. The USDJPY was driven lower on a big safe haven move into the YEN. Buyers pushed price lower into support around 101.500 which held for now.
SPOT GOLD initially found some safe haven buyers on the open for trade yesterday to spike price up through 1700 but the move struggled to stick as selling pressure pushed price back below the level into the US close. Price is contracted as buyers hold levels above 1660 but sellers are also strong so we may see lower levels yet in gold. Crude Oil was smashed on the open for trade yesterday as a price war between OPEC and Russia concerns traders. We expect the lower price will drag on global markets for a while yet but will actually be a positive for China and its GDP being a major oil consumer. Copper also struggled under the weight of a market meltdown. Buyers moved aside to let price settle before stepping in to support price around 2.4650. Expect the pressure to continue across commodities as demand remains a major issue and buyers remain on the sidelines.
Cryptocurrencies were hit along with global markets as sellers took control. Bitcoin is currently trading at $7847.2 down 5.68% while Ethereum is at $197.66 down 7.86% and Ripple is trading at $0.20328 down 4.55%. Prices are moving fast as the volatility has spiked globally across all assets.
The ASX200 went into meltdown as Crude Oil fell 10% on the open and complete fear gripped investors. It was a massacre from the open and the selling did not let up with the US overnight market hitting circuit breakers (when the action pushes markets down 5% intraday). The Index ended down 455.6 points or 7.33% to 5760.6 as the index is right back at levels from the start of 2019. Falling stocks outnumbered advancing ones by 1377 to 75 and 171 ended unchanged.
The ASX200 is expected to open down another 260 points as the overnight markets fell apart.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD NAB Business Confidence 11:30am
NZD RBNZ Gov Orr Speaks 12pm
CNY CPI and PPI 12:30pm
EUR Final Employment Change and Revised GDP 9pm
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SPI200 INTRADAY LEVELS TO WATCH
