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OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 21/05/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures up 36 pts to 5604
- SP500 up 48.67 pts to 2971.61
- NASDAQ up 190.67 pts to 9375.78
- Dow Jones up 369.04 pts to 24,575.90
- FTSE100 up 64.93 pts to 6067.16
- DAX30 up 148.42 pts to 11,223.71
- GOLD futures (June Contract) up $5.80 to $1751.40 an ounce
- COPPER futures (Comex July) up $0.040 to $2.458 a pound
- OIL futures US Session (Nymex July) up $1.56 to $33.52 a barrel
- CRB Index up 1.34 pts to 130.91
- AUDUSD trading at 0.6598
- EURUSD trading at 1.0980
- GBPUSD trading at 1.2238
- USDJPY trading at 107.5400
- USD Index US Session (ICE June) down 0.196 to 99.170
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US Indexes gained back the lost ground from the previous session as sentiment increased for expectations of a recovery. The US Fed Reserve minutes showed the central bank pledged to act as appropriate to support the economy until it is back on track. With low interest rates and continued stimulus, buyers continue to go risk on into shares. There is still a tug of war between markets and fundamentals as earnings globally are expected to take a big hit with many companies withdrawing earnings guidance. Also, price to earnings ratios for US equities are at their highest levels ever so if the pandemic has a second round after coming out of lockdown, are people still willing to pay up for ‘forward earnings’. In saying this, if the Fed and Government keep throwing money at the economy, the ‘trend is your friend’ theme will continue as long as all else remains the same. The DOW moved back up 1.52% while the broader SP500 was up 1.67% and the Nasdaq ended up 2.08% for the session. In Europe, major Indexes followed on from the strength in the Asian session and rallied from the open in a move that continued into the close as bulls were supported by the strength in the US. A rally in tech stocks fueled buyers as Facebook and Amazon posted record closes. The region has also been supported by a proposal for a 500 billion-euro Recovery Fund that would link all 27 EU states to raise debt jointly and offer grants to regions hit hardest.
The USD Index continued to see selling pressure as shares rallied and as the Euro gained. Safe haven buyers are taking a step back for now as positive sentiment continues to drive traders into share markets in search of gains. The EURUSD was supported by the Recovery Fund and the idea of a closer union on the fiscal front to support the economy. The Euro also found support from data showing German investor sentiment improved much more than expected. Price managed to push right up into the 1.1000 resistance zone so we would expect to see some gains locked away and a move lower. From there, it will be about the commitment of buyers and whether they can hold a higher low for another push up. The GBPUSD was again choppy as price initially rallied from the European open only to give up the gains and end back where it started at the US close. Resistance is holding around 1.2286 so we may see some pressure put on the buyers for a spike lower. The AUDUSD had a big night to follow the mood in the share market and smash up through resistance at 0.6565. The short squeeze did not play out as expected so the bias remains up for now. The USDJPY came under fire through the European session as the Dollar fell. Price has fallen away from resistance at 108.060 so we are interested to see if bulls can hold a higher low from here to support a push back up and retest or whether another lower high builds for a major leg down.
SPOT GOLD ended the session slightly higher but more due to the weakness in the USD rather than buyers jumping into the action looking for a rally. We do expect to see lower prices if the continued strength into the share market can be sustained. Crude Oil did not see any excitement over the rollover and price was well contained. It seems that the concern for another run at negative prices has evaporated so bulls will gain more confidence to jump into the action and support higher prices on increasing demand. Copper ramped higher straight up through previous resistance after a short consolidation period below the zone. Price could easily squeeze higher but we do expect to see the move run out of steam and some profit taking come into the action.
Cryptocurrencies fell slightly away from the highs as buyers start to get nervous up near resistance levels. Bitcoin is currently trading at $9573.4 down 1.20% while Ethereum is at $210.43 down 0.94% and Ripple is also lower trading at $0.20237 down 0.99%.
The ASX200 opened lower yesterday as expected only to see the bulls come out to ramp prices higher all day into the close. The index ended up 13.5 points to 5573. The market was led higher by the IT, Industrials and Consumer Discretionary sectors. Rising stocks outnumbered declining ones by 726 to 428 and 345 ended unchanged.
The ASX200 is expected to open up 35 points to carry on from where it left off yesterday after a solid session in the US.
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ECONOMIC DATA OUT TODAY (AEDT)
JPY Trade Balance 9:50am
AUD RBA Gov Lowe Speaks 12:30pm
EUR German Bank Holiday
EUR French Bank Holiday
EUR French Flash Services and Manufacturing PMI 5:15pm
EUR German Flash Services and Manufacturing PMI 5:30pm
EUR Flash Services and Manufacturing PMI 6pm
GBP Flash Services and Manufacturing PMI 6:30pm
USD Unemployment Claims 10:30pm
USD Flash Services and Manufacturing PMI 11:45pm
USD FED Chair Powell Speaks 4:30am
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SPI200 INTRADAY LEVELS TO WATCH
