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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 1/05/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures down 123 pts to 5417
- SP500 down 27.08 pts to 2912.43
- NASDAQ down 25.16 pts to 8889.55
- Dow Jones down 288.14 pts to 24,345.72
- FTSE100 down 214.04 pts to 5901.21
- DAX30 down 246.10 pts to 10,861.64
- GOLD futures (June Contract) down $20.30 to $1693.10 an ounce
- COPPER futures (Comex July) down $0.025 to $2.345 a pound
- OIL futures US Session (Nymex June) up $4.03 to $19.09 a barrel
- CRB Index up 5.33 pts to 117.20
- AUDUSD trading at 0.6509
- EURUSD trading at 1.0954
- GBPUSD trading at 1.2595
- USDJPY trading at 107.1800
- USD Index US Session (ICE June) down 0.594 to 99.050
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US Indexes saw a broad selloff overnight as traders locked away gains into one of the best months in 33 years. The run higher, considering the dire economic circumstances, caught a lot of bulls napping and may have extended further due to end of month window dressing. Major Indexes have been constantly pushed higher out of regular trading hours in very thin illiquid times such as the Asian session for DOW and S&P futures. Going into the session open, traders were faced with grim economic data and mixed earnings as unemployment claims came out worse than expected and data showed consumer spending plummeted. The concern now is that business and earnings may not snap back as quick as the ‘V-shaped’ bounce would suggest. As local and global economies come out of lockdown, all eyes will be focused on infection numbers to see what happens. If the numbers start to increase again we would expect to see a spike in volatility and markets quickly adjust lower. The DOW gave up some recent gains to finish down 1.17% while the broader SP500 was also down 0.92% and the Nasdaq down 0.28% for the session. In Europe, stock Indexes were hit hard to bear the brunt of sellers. Major Indexes fell from 7 week highs after the ECB held back on any policy moves even as the damage caused by the crisis on the EU economy mounts. Banks were hit as many expected an expansion of quantitative easing and stimulus. Energy stocks fell as traders weigh up effects of the beaten down oil price on heavily indebted Oil companies.
The USD Index continued its move lower more on end of month rebalancing of fund and major investor portfolios. The flow was against the risk off tone in shares which suggest that traders are happy with the stimulus measures to support the USD. The EURUSD moved higher as the USD spiked lower going into the start of the US session. Price may find some resistance around 1.0985 but we do expect to see a further squeeze higher. The GBPUSD also benefited from the USD spike lower as buyers were quick to react and chase price through highs. Although the price is extended, the action looks set to continue up as we expect further pressure into the USD as the Asian session gets underway. The AUDUSD struggled up near highs around 0.6560 and moved lower even against the flow of the weaker USD. The Aussie is more linked to the sentiment in the equity markets and demand for commodities going forward, than moves in the USD. The USDJPY spiked as demand for USD outweighed demand for YEN. Portfolio rebalancing was the main cause as selling into the YEN clearly offset any weakness into the USD. From the overnight currency moves, it will be interesting to see whether shares will continue to perform considering the economic headwinds. The fact that the USD is still heading lower suggests as much but new buyers may still want to see cheaper prices first.
SPOT GOLD was hit hard as bulls were not happy to dive into the action up near highs. We would have expected that the pressure on the USD and share indexes would have supported gold, but buyers were scarce and end of month rebalancing moved price lower into the close. Crude Oil prices again moved up as recent sellers were happy to close positions. Price was ramped up through the $18 dollar level late in the session into the US close so we expect that this may trigger more buyers into the commodity in the near term. Copper also fell apart as shares moved lower and the Dollar fell. Price is still holding above minor support so could see some near term buyers step back in to support price above 2.3305.
Cryptocurrencies gave up some of their recent gains along with the pullback into share markets. Bitcoin is currently trading at $8820.9 down 0.68% while Ethereum is trading at $211.55 down 2.38% and Ripple was hitter harder and is at $0.21455 down 6.27%.
The ASX200 yesterday continued on from where it left off the session Wednesday to open strong and rally all day into the close. The bulls were out in force and ended the Index up 129 points to 5522.4. The Gold and Utilities sectors were the only ones that did not end positive while Energy and IT, up 8.16% and 4.91% respectively, led the charge higher. Rising stocks outnumbered declining ones by 941 to 321 and 311 ended unchanged.
The ASX200 is expected to open down 120 points as the SPI200 gave up the gains made during the day session yesterday.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD AIG Manufacturing Index 8:30am
JPY CPI Data 9:30am
JPY Final Manufacturing PMI 10:30am
AUD PPI 11:30am
AUD Commodity Prices 4:30pm
GBP Final Manufacturing PMI, Mortgage Approvals and Net Lending to Individuals 6:30pm
USD ISM Manufacturing PMI 12am
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SPI200 INTRADAY LEVELS TO WATCH
