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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 27/03/20 (as at 7:15am AEDT)
- SPI200 (Jun) overnight futures up 184 pts to 5302
- SP500 up 154.51 pts to 2630.07
- NASDAQ up 413.24 pts to 7797.54
- Dow Jones up 1351.62 pts to 22,552.17
- FTSE100 up 127.53 pts to 5815.73
- DAX30 up 126.70 pts to 10,000.96
- GOLD futures (June Contract) up $26.70 to $1661.00 an ounce
- COPPER futures (Comex May) down $0.017 to $2.187 a pound
- OIL futures US Session (Nymex May) down $1.42 to $23.07 a barrel
- CRB Index down 3.25 pts to 126.35
- AUDUSD trading at 0.6062
- EURUSD trading at 1.1042
- GBPUSD trading at 1.2192
- USDJPY trading at 109.4500
- USD Index US Session (ICE June) down 1.542 to 99.453
US Indexes rallied on the back of news of an unprecedented $2 trillion stimulus awaiting approval by the US House of Representatives. Adding to the positive stimulus sentiment was comments from Fed Chair Powell who eased concerns of the Fed running out of bullets saying the central bank stood ready to act “aggressively” to shore up credit on top of the unprecedented policy easing. The DOW has rallied 21% from its Monday low so we are ‘technically’ in a bull market but do not let the news fool you…the pressure from the virus is still concerning markets. The first US unemployment data was released to show an unprecedented number of job losses although the news may have already been factored in to the market. Expect to see the numbers of unemployed grow as the virus remains uncontrolled and the lockdown continues. Next on the agenda will be corporate defaults as business activity breaks down. The ‘bull market’ does not mean that the bottom is in but it is indicative of a bottoming process. The DOW finished up another 6.38% while the broader SP500 was also up 6.24% and the Nasdaq ended up 5.60% for the session. In Europe, stock Indexes ended higher to track the gains from Wall Street after the US stock market opened for trade. Overnight, the ECB ditched a cap on how many bonds it could buy from any single euro zone country, clearing the way for potentially unlimited money-printing and stimulus. The news is proof of he coordinated move from Global Central banks to make sure that the system does not fall apart.
The USD Index took a hit as the stimulus package news settled in and the pressure on bond and swap spreads eased. US Bonds initially rallied as yields dropped on unemployment news although the data was largely factored in as yields later rallied and dollar buyers locked in gains to push price lower. The EURUSD launched higher as longs were squeezed out of the action and the dollar faded. Price has now retraced 50% of the move down off the 1.5000 zone. The GBPUSD also spiked hard thanks to dollar sellers and has also retraced nearly 50% of the move down from highs prior to the selloff. The AUDUSD initially flushed lower below 0.5900 to clear out some buyers and sucker in some sellers before moving back up through 0.6000 as the dollar fell. The USDJPY finally broke down out of is range as dollar selling was just too great for the currency pair and finally triggered a wave of buyers to lock away some gains.
SPOT GOLD was higher although could not get any more momentum after retesting the highs from around 1645 from the recent run up. The rally should have continued with the dollar weakness so we expect that Gold may see some profit taking soon if 1600 does not hold. Crude Oil was not that impressed with the stock market rally as price was hit lower although bounced late in the session as intraday sellers locked away some gains. If price can hold above the $22 zone then we may see a good squeeze higher. Copper continues to show some positive signs as price is consolidating the recent gains. We expect to see a spike higher to break the 2.2500 level if 2.1500 holds.
Cryptocurrencies were mixed with the majors generally ending with minor gains. Bitcoin is currently trading at $6666.4 up 0.60% while Ethereum was lower trading at $135.32 down 0.25% and Ripple did the best of the three currently trading at $0.16323 up 2.15%.
The ASX200 had another good session yesterday to rack up three in a row which may give the bulls some more confidence. The US announced that the senate had passed the stimulus bill but for the most part it was already factored in to the action as US futures moved lower. At the close the ASX200 ended up 115.2 points to 5113.3. The Gold sector came under pressure as traders locked away some gains while IT and Healthcare stocks led the move up. Rising stocks outnumbered declining ones by 911 to 291 and 232 ended unchanged.
The ASX200 is expected to open up 180 or higher after the US moved up on the stimulus news to drag the SPI200 higher.
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ECONOMIC DATA OUT TODAY (AEDT)
ALL G20 Meetings All Day
JPY CPI Data 10:30am
USD Personal Spending and Personal Income 11:30am
USD Consumer Sentiment and Inflation Expectations 1am
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SPI200 INTRADAY LEVELS TO WATCH
