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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 12/05/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures down 19 pts to 5459
- SP500 up 0.39 pts to 2930.19
- NASDAQ up 71.02 pts to 9192.34
- Dow Jones down 109.33 pts to 24,221.99
- FTSE100 up 3.75 pts to 5939.73
- DAX30 down 79.49 pts to 10,824.99
- GOLD futures (June Contract) down $13.70 to $1700.20 an ounce
- COPPER futures (Comex July) down $0.026 to $2.380 a pound
- OIL futures US Session (Nymex June) down $0.24 to $24.50 a barrel
- CRB Index down 2.07 pts to 122.67
- AUDUSD trading at 0.6492
- EURUSD trading at 1.0807
- GBPUSD trading at 1.2335
- USDJPY trading at 107.6600
- USD Index US Session (ICE June) up 0.511 to 100.280
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US Indexes took a breather overnight as traders try to balance a recovery with the pandemic. Investors have been happy to brush aside any negative economic data on the expectations that the massive stimulus will reignite economic and profit growth. The main focus that may quench the optimism is if the number of cases start to rise again as countries come out of lockdown. US first quarter earnings is nearing an end and 67.5% have beaten Wall Street estimates which has supported the buying. The outlook going forward for earnings will not be so rosy if we do see a rise in the numbers of new coronavirus cases leaving global governments with a awkward decision to make. Nations want and need to get back to work so the aim is to make sure the that healthcare system can manage as they all know that new cases will re-emerge. There remains conflict between the US and China after talk that the China would like to re-open negotiations on the phase 1 trade deal which Trump has quashed. The DOW finished down 0.45% while the broader SP500 was up 0.01% and the Nasdaq also ended up 0.78% for the session. In Europe, major Indexes edged lower on concerns of a second wave of coronavirus cases. Investors focused on news that Germany and South Korea reported an acceleration in new infections after steps to ease their restrictions. Banks, miners and travel stocks took the brunt of selling.
Bond markets saw yields move lower signaling that a global economic recovery will be slow. Fed fund futures last week went negative for the first time ever triggering talk of negative interest rates in the US. The FED Reserve has said that they will support the market but negative rates are definitely not on the cards.
The USD Index saw buyers jump back in to make back Fridays losses on safe haven buying and concern that the share market may roll over. Bonds and the dollar are being supported by hope for further stimulus. The EURUSD moved lower with the dollar rally although held up well considering the dollar strength. Support is around 1.0775 which may see some buyers step in if the USD Index holds below 100.400. The GBPUSD was hit lower during the European session to spike down into recent lows. We expect that new sellers may be cautious at current levels which have previously been rejected in favour of a rally. The AUDUSD suffered during European trade as share markets moved lower on virus concerns. Price did retest the 0.6570 zone as expected before failing and holding a double top which may give pause to longer term bulls. The USDJPY moved higher on the back of safe haven YEN selling.
SPOT GOLD again moved lower along with strength in the USD. No signs of safe haven buying into the precious metal as price remains stuck in a major contractive pattern between lower highs and higher lows. It will be interesting to see which way the price action resolves itself but we expect to see the theme remain linked to USD moves. Crude Oil moved sideways as equity markets paused. Bulls remain focused on a potential lift in demand as countries get back to work but will find concern if a pullback is on the cards for share markets. Copper sellers were quick to jump in and lock away some gains from the recent run higher. Still, price remains in a longer term uptrend for now and will all depend on share markets over the coming few weeks.
Cryptocurrencies were slightly lower for the session with Bitcoin retesting back above 9000 only to fail and move back to recent lows. Bitcoin is currently trading at $8666.1 down 0.59% while Ethereum is at $188.05 down 0.52% and Ripple is at $0.19315 down 1.34%.
The ASX200 rallied from the open yesterday and never really looked back as bulls were in control all session up until the last hour when gains were locked away. The Index ended up 70.1 points to 5461.2 with all sectors again ending the session with gains. The Industrial sector was the best performer being followed by Energy and IT. Rising stocks outnumbered declining ones by 840 to 400 and 341 ended unchanged.
The ASX200 is expected to open down 15 points after the SPI200 was well contained overnight.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD NAB Business Confidence 11:30am
CNY CPI and PPI Data 11:30am
USD CPI Data 10:30pm
USD FOMC Members Harker and Quarles Speak 12am
USD Federal Budget Balance 4am
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SPI200 INTRADAY LEVELS TO WATCH
