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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 8/05/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures up 5 pts to 5373
- SP500 up 32.77 pts to 2881.19
- NASDAQ up 125.27 pts to 8979.66
- Dow Jones up 211.25 pts to 23,875.89
- FTSE100 up 82.22 pts to 5935.98
- DAX30 up 153.07 pts to 10,759.27
- GOLD futures (June Contract) up $38.70 to $1727.20 an ounce
- COPPER futures (Comex July) up $0.032 to $2.379 a pound
- OIL futures US Session (Nymex June) down $0.60 to $23.39 a barrel
- CRB Index up 1.04 pts to 122.58
- AUDUSD trading at 0.6496
- EURUSD trading at 1.0831
- GBPUSD trading at 1.2357
- USDJPY trading at 106.3100
- USD Index US Session (ICE June) down 0.263 to 99.873
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The US broader market again moved higher to brush off negative data on unemployment claims. The overnight markets were ramped up into the US open and then sellers again stepped into the action to move price down off the highs into the close. Buyers were supported by Chinese export data that was far stronger than expected suggesting to bulls that a recovery was underway. Even though data out of China is notoriously skewed, at this stage bulls do not need much prompting as price continued to hold highs against the backdrop of bad US economic data as investors await the outcome of countries re-opening. Initial jobless claims came out very weak but traders took comfort in the fact that they were not as bad as previous numbers but it does set up for an interesting night tonight for Payrolls. The DOW finished up 0.89% and the broader SP500 was up 1.15% while the Nasdaq ended up 1.41% for the session. In Europe, major Indexes moved higher after the markets ramped up into the European open on the back of the Chinese data. Buyers were out in force seemingly unconcerned with the possible need for further stimulus and also brushing aside a plunge in German industrial production. The Bank of England warned that the coronavirus crisis could cause the country’s biggest economic slump in 300 years. Traders also took comfort in another company announcing it will start trials for a covid-19 vaccine. It is not hard to be bearish with the economic backdrop, but for now buyers are happy to be risk on in shares.
The USD Index moved lower as buyers locked away some gains after the unemployment claims were not as bad as previous figures increasing expectations that we are seeing a topping in claims. This suggests that traders had factored in a very negative number and are repositioning into the payroll data out tonight. Expectations are for the unemployment rate to hit 16% from 4.4% so we would expect from last nights reaction, for buyers to jump into stocks if the figure comes out anything less than expected. The EURUSD rallied once the USD turned negative. Sellers had to move to new lows first to drag in more bears before price turned sharply and spiked higher. It will be interesting to see how the USD reacts into employment data tonight as the Euro is linked purely to the fortunes of the dollar currently. The GBPUSD was very choppy cleaning out both buyers and sellers as price initially spiked higher and then smashed through the lows after the BOE interest rate news. Hard to be directional after the whipping price action so we will wait to see if buyers will step in on dollar weakness looking for a short squeeze. The AUDUSD had a big day to run higher being supported initially by the unexpectedly strong Chinese data and then by positive moves into share markets. Price ran up nearly 100 pips before falling away as US indexes started to sell down into the US close. The USDJPY moved up during the Asian session as YEN safe haven buyers took their foot of the gas and a positive USD dragged price higher. Sellers later stepped into the FX pair as the USD fell over during US trade.
SPOT GOLD rallied hard but not before a squeeze lower to drag in and trap a few more sellers around 1680. The commodity continues to act like a currency and not a safe haven as price movements are locked to the USD. Price hovered below the 1700 level and then started to lift sharply, around $25, once the USD fell over. Crude Oil was also a chop fest as price spiked into the US open only to give up all the gains plus some into the close. We expect that a few buyers took the opportunity to lock in some gains ahead of the rollover in the futures contracts. Copper continues to be linked to the fortunes of the share market as bulls remained confident that we have seen the bottom and economic activity will lift creating the expected demand in Copper prices.
Cryptocurrencies had another good session led by Bitcoin which is now approaching the 10K level. Bitcoin is currently trading at $9811.1 up 5.47% while Ethereum is at $212.04 up 2.82% and Ripple is lagging at $0.21786 up 0.35%.
The ASX200 opened lower yesterday and then traded in a tight range into the close as buyers were not willing to add risk to the market ahead of a long list of economic data releases today and tonight in the US. Trade Balance data came out better than expected up 10.60B from 3.87B thanks to an increase in export receipts from bulk commodities. At the close the Index was down 20.4 points to 5364.2 the Financial and Energy sectors weighing most on the action. Rising stocks outnumbered declining ones by 600 to 598 and 331 ended unchanged.
The ASX200 is expected to open 10 points after the SPI200 continued the tight range bound action over night.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD RBA Monetary Policy Statement 11:30am
EUR German Trade Balance 4pm
GBP Bank Holiday All Day
EUR ECB President Lagarde Speaks 9pm
CAD Employment Change and Unemployment Rate 10:30pm
USD Non-Farm Employment Change and Unemployment Rate 10:30pm
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SPI200 INTRADAY LEVELS TO WATCH
