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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 5/06/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures down 13 pts to 5987
- SP500 down 10.52 pts to 3112.35
- NASDAQ down 67.10 pts to 9615.81
- Dow Jones up 11.93 pts to 26,281.82
- FTSE100 down 40.97 pts to 6341.44
- DAX30 down 56.80 pts to 12430.56
- GOLD futures (Aug Contract) up $15.80 to $1720.60 an ounce
- COPPER futures (Comex July) down $0.002 to $2.486 a pound
- OIL futures US Session (Nymex July) up $0.01 to $37.30 a barrel
- CRB Index up 0.74 pts to 135.75
- AUDUSD trading at 0.6940
- EURUSD trading at 1.1336
- GBPUSD trading at 1.2602
- USDJPY trading at 109.1500
- USD Index US Session (ICE June) down 0.502 to 96.757
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The DOW managed to add to gains for the 5th straight session while other US Indexes edged lower. The SP500 saw some minor losses but price action still suggests the rally is in tact with a pop higher into the close off the Moving Average. US bond yields have rallied the previous few days which is a positive sign for bulls as it suggests that bond traders perceive the worst of the market selloff is over. It leaves many traders wondering whether the Fed may need to intervene in the yield curve to make sure that inflation does not lift significantly due to the amount of stimulus into the economy. The Fed will be happy with a slow creep higher in yields and borrowing costs. The number of Americans filing for unemployment benefits continued to increase although at a lesser pace than expected but tonights unemployment rate data release is expected to show an historic 19.7%. The DOW closed up 0.05% while the broader SP500 was down 0.34% and the Nasdaq ended down 0.69% for the session. In Europe, major Indexes edged lower as investors were happy to lock in some gains up at extended levels. The market was supported by the ECB’s approval of a stimulus package that surpassed all expectations to nearly double the size of its Pandemic Emergency Purchase Plan to 1.35 trillion Euros from 750 billion. The move highlighted the ECB’s commitment to strengthening the EU economies and confirming the recovery.
The USD Index was all one way traffic again as prices continued lower to squeeze out any buyers trying to pick a bottom. Price may start to find a bid as it heads into support around 96.250. The EURUSD lifted on the back of dollar weakness and also after the ECB stimulus package was announced. Bulls see it as a big positive to the region so we expect to see price continually supported on pullbacks. The GBPUSD spiked up into resistance around the 1.2650 zone on dollar weakness. If price action can hold another higher low, we expect to see a spike up through the level to target stop loss orders above. The AUDUSD may be showing a few cracks up at these high levels into the 0.7000 zone. Increased risk sentiment has helped the Aussie to push higher but bulls will need to lock in gains at some stage and we will be watching to see what happens on the first pullback. The USDJPY found buyers to lift price into resistance around 109.200 as the USD fell on YEN selling pressure. If price holds above 108.650 and can consolidate the level, then we may see a push up through resistance.
SPOT GOLD found buying support after the previous sessions selloff through 1690. If momentum up starts to wane, then we expect the lower high to trigger some further selling into the commodity. The weaker USD supported buyers but if it starts to rally, then gold will come under pressure. Crude Oil saw a choppy Asian session but held up well during the European session to be supported at 36.40. Price action looks like it is building for another run up through recent highs at 38.18 thanks to OPEC continuing output cuts for longer. Copper spiked back up hard to 2.5000 after an earlier selloff to clean out some buyers during the Asian session. If price can consolidate the current level then it may be enough to start a new leg up.
Cryptocurrencies edged higher but may be starting to find some pressure as prices generally struggle to move to higher levels. Bitcoin is currently trading at $9771.3 up 1.91% while Ethereum is at $241.34 down 0.13% and Ripple is at $0.20367 up 0.07%.
The ASX200 had a choppy session yesterday as some cracks appeared in buyers confidence as the market sold off hard just after the open. Price bounced back to make back most of the losses but Indexes did come under selling pressure during the Asian session. The ASX200 ended up 50.2 points to 5991.8 with a mixed bag in sector performance. The Consumer Discretionary and Financials helped the index end in the green while the Gold sector was by far the biggest drag on the action down 3.62%. Rising stocks outnumbered declining ones by 629 to 613 and 335 ended unchanged.
The ASX200 is expected to open down 10 points after the SPI200 spent most of the overnight session locked in a tight range. We expect to see a kick higher off support into the long weekend.
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ECONOMIC DATA OUT TODAY (AEDT)
EUR German Factory Orders 4pm
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
