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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 5/05/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures up 17 pts to 5335
- SP500 up 12.03 pts to 2842.74
- NASDAQ up 105.77 pts to 8710.72
- Dow Jones up 26.07 pts to 23,749.76
- FTSE100 down 9.28 pts to 5753.78
- DAX30 down 394.84 pts to 10466.80
- GOLD futures (June Contract) up $9.90 to $1710.80 an ounce
- COPPER futures (Comex July) up $0.009 to $2.321 a pound
- OIL futures US Session (Nymex June) up $1.40 to $21.18 a barrel
- CRB Index up 0.90 pts to 118.52
- AUDUSD trading at 0.6428
- EURUSD trading at 1.0903
- GBPUSD trading at 1.2440
- USDJPY trading at 106.7500
- USD Index US Session (ICE June) up 0.490 to 99.590
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US Indexes fended off sellers on the open to stage a late rally into the close and start the week off with a positive session. Gains in Oil prices and large tech and internet companies helped to support the action and offset negativity about another trade war between the US and China. Traders remain focused on the re-opening of economies within the US and globally. New York outlined a phased reopening of business in the state which has been hardest hit by the pandemic. Traders will be watching with fingers on the ‘Sell’ button to see if the numbers of coronavirus cases can be kept at bay and people get back to work safely which we expect will be a difficult task. The DOW finished up 0.11% while the broader SP500 was also up 0.43% and the Nasdaq up 1.23% for the session. In Europe, the DAX reopened to find sellers queued up from the long weekend while the FTSE saw a relatively flat session with no interest from buyers. Both markets may play catch up with the US once they open for trade tonight after the late session rally into the US close.
Swap markets are showing that it may be getting a little more expensive to move funds from the Euro or YEN into USD. Spreads on the Euro and YEN swaps are widening compared to rates seen last month which suggests traders steadily seeking a safe haven asset and are skeptical about the recent increase of risk appetite into share markets. Concerns now are for another USD funding squeeze.
The USD Index showed the opposite sentiment to the share market as safe haven flows pushed dollar higher. Risk appetite may wane if we see relations between the US and China sour after comments Sunday from US Secretary of State Mike Pompeo saying there was a significant amount of evidence that the virus came from a laboratory in Wuhan China. Some retaliation may come in the from of cancelling payments on China owned US treasuries which would lead to a spike in volatility in FX markets. The EURUSD drifted lower as the USD pushed higher. Price is back testing the break out area for our recent long trade around 1.0890. If buyers can hold the area we expect to see a higher low but not if the USD continues to come under pressure. The GBPUSD continued to fall from the 1.2645 zone and found some buyers reacting off the 1.2400 area. If price can build a higher low then we see a buying opportunity and move up as recent sellers get squeezed out of the action. The AUDUSD edged its way higher up off the 0.6380 area as we expect a few sellers are happy to square up some positions ahead of the RBA rate release and statement later today. The USDJPY held up off the 106.630 area as expected but did give up early gains made through European trade into the close of the US session. We see a potential for buyers to step in off the 106.630 zone for a run higher but price will need to hold above the level and work a higher low for the entry setup.
SPOT GOLD moved higher but not convincingly as price saw some very choppy action. Momentum up seems to be slowing and we expect that buyers will not like a rally into the USD and may be forced to cover triggering sellers into the commodity. Crude Oil moved up off the $18 area as stock markets were buoyant which may start to bring in buyers looking for a run higher although we see this action more of a ‘trap’ coming into the expiry of the futures contract. We would not expect to see buying pressure if relations between the US and China sour which it seems the US is intent on doing. Copper moved lower on the open as expected but did find some support off the 2.2850 area being buoyed by the positive sentiment into the US share market.
Cryptocurrencies had a quiet session and were relatively unchanged with Bitcoin trading at $8899.8 up 0.49%. Ethereum is currently trading at $206.39 down 0.74% while Ripple is at $0.21812 down 0.17%.
The ASX200 started the session yesterday on the back foot but then managed to fight back after better than expected building approvals came out triggering buyers to dive into the action. The index ended the day up 73.9 points to 5319.8 with the Gold sector charging higher by 6.4%. The IT sector also had a very positive day up 5.04% followed by Consumer Staples up 2.57%. Falling stocks outnumbered advancing ones by 655 to 546 and 324 ended unchanged.
The ASX200 is expected to open up 20 points as the SPI200 holds onto the day sessions gains.
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ECONOMIC DATA OUT TODAY (AEDT)
JPY Bank Holiday All Day
AUD Cash Rate and RBA Rate Statement 2:30pm
EUR German Constitutional Court Ruling Tentative
GBP Final Services PMI 6:30pm
EUR PPI Data 7pm
CAD Trade Balance 10:30pm
USD Trade Balance 10:30pm
USD ISM Non-Manufacturing PMI 12am
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SPI200 INTRADAY LEVELS TO WATCH
