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OVERNIGHT MARKET SNAPSHOT FOR MONDAY 1/06/20
- SPI200 (Jun) overnight futures down 24 pts to 5725
- SP500 up 14.58 pts to 3044.31
- NASDAQ up 120.88 pts to 9489.87
- Dow Jones down 17.53 pts to 25,383.11
- FTSE100 down 142.19 pts to 6076.60
- DAX30 down 194.28 pts to 11,586.85
- GOLD futures (Aug Contract) up $23.40 to $1751.70 an ounce
- COPPER futures (Comex July) up $0.029 to $2.442 a pound
- OIL futures US Session (Nymex July) up $1.78 to $35.49 a barrel
- CRB Index up 2.48 pts to 132.24
- AUDUSD trading at 0.6667
- EURUSD trading at 1.1101
- GBPUSD trading at 1.2343
- USDJPY trading at 107.8300
- USD Index US Session (ICE June) down 0.097 to 98.275
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US Indexes were weaker coming into the close before investors welcomed Trumps approach to Hong Kong and dived into the action to lift shares into the close. Generally investors believe that the move will not jeopardize trade relations with China and the reaction from the US was expected to be far more detrimental than it was. Trump said that China broke its word over Hong Kong’s autonomy but did not mention any action that would undermine the Phase 1 deal. The DOW ended down 0.07% while the broader SP500 was up 0.48% and the Nasdaq also ended up 1.29% for the session. In Europe, major indexes were lower ahead of Trumps response to China. Expect to see a more risk on tone tonight once the session gets underway to play catchup to the US close.
US protests against police brutality are getting out of hand and is expected to hit an already hurting economy. The cost to state governments is yet unknown but we expect costs to insurers and business to be high. Many local businesses will not survive after being hit by the coronavirus and then attacked and looted by protesters. The protests will have a major impact on consumer and business sentiment and may flow into the markets and impact investor risk tolerance. We will be interested to see the US’s market response to the protesters riots tonight once the US opens for trade.
The USD Index was initially moving lower as shares were being sold before Trump gave support and the Dollar fell into the close on the spike in share indexes. The dollar also continued to find some weakness from Euro buying and also from month end flows. The EURUSD ended the session higher thanks to earlier strength through the Asian and European sessions. Traders continue to buy up on the back of the EU’s recent plan to prop up the bloc’s hardest hit economies. The GBPUSD was choppy but little changed in the end ahead of a new round of Brexit talks this week. Price did spike up through resistance at 1.2365 but was then quick to fail showing the unwillingness to push higher as yet. The AUDUSD moved higher most of the session although found selling pressure up at the 0.6675 zone. Price continues to hold minor higher lows but sellers are content to step in around resistance. The USDJPY was under early pressure through the Asian session before rallying hard to make back the losses as the USD moved up. Price spiked straight up into resistance around 107.920 where we expect to see a reaction lower.
SPOT GOLD found some buying strength into the US close as shares were initially under pressure but buyers held onto the majority of the gains after Trumps speech as shares rallied. Gold has opened stronger today as safe haven buyers are concerned for US riots. Crude Oil rallied after the speech as investors became more positive that the Hong Kong situation will not derail the economic recovery. Traders continue to focus on production cuts and a recovery in demand led by China. Copper moved higher being supported by the continued strength into the share market. The focus remains on demand out of lockdown so it will be interesting to see how price unfolds today if the unrest in the US can not be contained.
Cryptocurrency held onto recent gains over the weekend as Bitcoin holds above the $9000 level. Bitcoin is currently trading at $9504.6 up 0.19% while Ethereum is at $235.63 down 4.40% and Ripple is at $0.20595 up 0.82%
The ASX200 had a rough session for the bulls as the index opened weak and then was hit again into the close. The index dropped around 30 points on the final match to end down 95.4 points to 5755.7. The Financial Sector was hit hardest after the previous few days of strength. The Consumer Discretionary and Energy sectors were the next biggest drag on the index while Gold ended up 3.88% and is expected to see further action today.
The ASX200 is expected to open down 25 points and could have been a lot worse if the US didn’t rally in the final hours of the session.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD MI Inflation Gauge 11am
CNY Caixin Manufacturing PMI 11:45am
EUR German Bank Holiday
EUR German Final Manufacturing PMI 5:55pm
EUR Final Manufacturing PMI 6pm
GBP Final Manufacturing PMI 6:30pm
USD Final Manufacturing PMI 11:45pm
USD ISM Manufacturing PMI 12am
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SPI200 INTRADAY LEVELS TO WATCH
