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OVERNIGHT MARKET SNAPSHOT FOR MONDAY 16/03/20
- SPI200 (Mar) overnight futures up 61 pts to 5655
- SP500 up 230.38 pts to 2711.02
- NASDAQ up 673.07 pts to 7874.88
- Dow Jones up 1985.00 pts to 23,185.62
- FTSE100 up 128.63 pts to 5366.11
- DAX30 up 70.95 pts to 9232.08
- GOLD futures (April Contract) down $73.60 to $1516.70 an ounce
- COPPER futures (Comex May) up $0.021 to $2.493 a pound
- OIL futures US Session (Nymex Apr) up $0.23 to $31.73 a barrel
- CRB Index down 1.10 pts to 140.84
- AUDUSD trading at 0.6203
- EURUSD trading at 1.1107
- GBPUSD trading at 1.2278
- USDJPY trading at 107.6200
- USD Index US Session (ICE March) up 1.051 to 98.515
US Indexes also saw a massive short squeeze into the last hour of the session which saw the DOW rally over 1500 points in 25 minutes. Markets were up already going into the open of the US session before the Dow Jones Futures went limit up prior to the open which may be the first time ever. The DOW got a boost after Trump freed up $50 Billion to tackle the coronavirus pandemic. We expect that the rally may be to no avail as countries continue to go into lockdown over the weekend in an attempt to stop the parabolic spread of the virus. We expect to see a weaker open and a lack of buyers even after the markets sudden charge higher Friday. New Zealand and Australia have also tightened their borders are may be on tract to also start to go in lockdown as numbers of infected people go up. The DOW whipped back up to end up 9.36% while the broader SP500 was up 9.29% and the Nasdaq also ended up 9.35% for the session. In Europe, stock Indexes closed the session slightly higher but the week marked the worst week since 2008. Growth Forecasts are being downgraded in the US and Europe as the expected impact of the coronavirus will start to show up in global economic data.
The stress is building to dangerous in the financial system as bankers, companies and individual investors are dashing to stock up on cash and other assets considered safe in a downturn to ride out the chaos. The sudden flight to safety is causing havoc in the bond and currency markets with the key concern now being liquidity. The cost of funding of money used in payrolls is going up and heavily indebted companies are having to pay increasingly more for overnight funding. Companies are also drawing down on credit lines early as they become concerned that lenders will not fund agreed lines if the market turmoil continues.
The USD Index continued to rally as traders poured into the asset as a safe haven investment. The USD also gained traction as the US declared a national emergency. Expect the dollar gains to continue as the world tries to contain the spread of the virus as swap markets suggest a dollar shortage for companies seeking funding. The EURUSD continued to move lower as the dollar rallied and reacted off 1.1055 zone which bulls will be hoping to see hold. We expect that the Euro will continue to move lower as the move into the USD continues. The GBPUSD fell hard in a move that continued into the close. The Pound may be targeting 1.2200 or further down to 1.2000 even as buyers disappear. The AUDUSD also continued to come under fire and is now down around GFC levels but we expect that there is more to come and a potential test of the 0.6000 level is on the cards. The USDJPY moved higher as the dollar gained but has opened weaker after the US has just cut interest rates.
SPOT GOLD was again hammered being pressured by a rising USD and a severe lack of interest as a safe haven asset. Traders are not happy with the current environment and continue to stay on the sidelines. Crude Oil found some buyers into the close of the session to hold up price. We still expect that price will hold around current key support but expect to see continued volatility. Copper continues to show signs of weakness as the market slides further into turmoil. We expect to see a continued lack of interest from buyers.
Cryptocurrencies continued to come under pressure and hold the lows after the recent selloff. Butcoin is currently trading around $5423.1 up 1.56% while Ethereum is at $124.73 down 2.01% and Ripple is trading at $0.15337 up 1.28%.
The ASX200 ended the week with a massive short squeeze to end up 234.7 points at 5539.3. The rally was a big turn around from lows below the 5000 zone and ETFs were caught having to balance their positions during the match after 4pm which saw a spike of over 150 points. The sudden rally triggered bargain hunters into Energy, Consumer Staples and Consumer Discretionary sector while gold continue to trade weak with more pain expected on the open today. Falling stocks outnumbered advancing ones by 911 to 443 and 234 ended unchanged.
The ASX200 is expected to open down even after the SPI200 ended with gains on Friday night.
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ECONOMIC DATA OUT TODAY (AEDT)
CNY Industrial Production, Fixed Asset Investment and Retail Sales 1pm
All G7 Meetings All Day
USD Empire State Manufacturing Index 11:30pm
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SPI200 INTRADAY LEVELS TO WATCH
