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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 7/04/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures up 124 pts to 5397
- SP500 up 175.03 pts to 2663.68
- NASDAQ up 540.16 pts to 7913.24
- Dow Jones up 1627.46 pts to 22,679.99
- FTSE100 up 166.89 pts to 5582.39
- DAX30 up 549.40 pts to 10,075.17
- GOLD futures (June Contract) up $48.20 to $1693.90 an ounce
- COPPER futures (Comex May) up $0.001 to $2.224 a pound
- OIL futures US Session (Nymex May) down $2.26 to $26.08 a barrel
- CRB Index up 0.10 pts to 128.06
- AUDUSD trading at 0.6081
- EURUSD trading at 1.0796
- GBPUSD trading at 1.2231
- USDJPY trading at 109.2300
- USD Index US Session (ICE June) up 0.181 to 100.858
US Indexes ramped higher in a move that started from the open of the markets before the Asian session got underway. Buyers kept pushing prices up through the European session and then into the US to end with some handy gains. The move has been attributed to a fall in the daily death toll in New York which fueled optimism that the pandemic may be leveling out. Traders were out in search of bargains even as the macro fundamentals continue to look bad as expectations that the worst of the job losses is still to come. Earnings are expected to be hit hard so traders are essentially factoring in any bad news and looking ‘over the valley of bad news’ and to the other side. The DOW finished up 7.73% while the broader SP500 was up 7.03% and the Nasdaq ended up 7.33% for the session. In Europe, stock Indexes followed Asia’s lead and ramped higher on the back of hopes that the spread of the virus is slowing. Also, Boris Johnson, the UK PM, has been admitted to intensive care as his coronavirus symptoms worsen.
The US Fed Reserve also came out to support the action to say it will announce details of a new term financing arrangement for loans made under what is known as the Payroll Protection Program. The aim is to allow banks to turn small business loans over to the US central bank for cash, easing any concerns among banks about getting stuck holding the low interest loans. This will in turn encourage banks to lend and make loans to support small businesses and earn up to 5% for what now amounts to processing the paperwork.
The USD Index ended the session higher although the price looks to be consolidating around the 100 zone. We may see a pullback prior to further continuation higher to squeeze out some of the late buyers. The EURUSD eased lower but not with the same pressure as previous selloffs. Buyers look to be stepping into the action potentially expecting a pullback into the dollar. If price continues to hold below the 1.0820 zone then expect further downside….if not then a short squeeze is on the cards. The GBPUSD came under pressure as expected with the 1.2315 area holding the action down. If sellers push below 1.2200 then expect further pressure as longer term buyers are forced to lock in the gains. The AUDUSD had a good session as share markets rallied on the back of positive sentiment. The sentiment flowed through to the Aussie even against the pressure of the USD. Expect to see the Aussie continue higher if share traders put risk back into the share markets. The USDJPY continues on its way higher on the back of the USD strength and potentially YEN weakness as share went risk on overnight.
SPOT GOLD launched higher as the European markets opened for trade. It was a one way street with buyers being relentless and looking to ramp price into previous highs around 1700. The move does not support safe haven action and caught a lot of bears off guard. Crude Oil moved lower on news that a meeting with OPEC members was delayed on ‘differences of opinion’. News overnight suggests that OPEC may be happy to cut production but only if non-OPEC members join in the effort…in particular the US. We will now see how serious Trump and the US are in supporting the market. Sources said that there will be no deal without the US. Copper continues to struggle with the 2.2500 area which is capping the buyers. There continues to be fundamental pressure on the commodity to cap buyers although if the strength into the share markets continue, we expect a pop in price through the resistance level which may trigger more buyers into action.
Cryptocurrencies had a big session as buyers pushed prices higher to follow the lead of the stock markets. Bitcoin is currently trading at $7264.7 up 6.97% while Ethereum is at $165.23 up 13.89% and Ripple is at $0.19479 up 8.44%.
The ASX200 came out of the gates charging yesterday and never looked back as buyers kept the pressure on into the close. In the end the index closed up 219.3 points or 4.33% to 5286.8 to erase the losses from Friday. All sectors ended the day in the green with Energy up 6.04% followed by Financials and Healthcare stocks. Traders will be focused on Trade Balance data and then interests rates from the RBA in the afternoon. Falling stocks outnumbered advancing ones by 624 to 544 and 266 ended unchanged.
The ASX200 is expected to open up 120 points as the bulls came out to play overnight and the days momentum up continued.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD Trade Balance 11:30am
AUD Cash Rate and RBA Rate Statement 2:30am
EUR German Industrial Production 4pm
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SPI200 INTRADAY LEVELS TO WATCH
