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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 12/06/20 (as at 7:15am AEST)
- SPI200 (Jun) overnight futures down 181 pts to 5775
- SP500 down 188.04 pts to 3002.10
- NASDAQ down 527.62 pts to 9492.73
- Dow Jones down 1861.82 pts to 25,128.17
- FTSE100 down 252.43 pts to 6076.70
- DAX30 down 559.87 pts to 11,970.29
- GOLD futures (Aug Contract) up $13.00 to $1733.70 an ounce
- COPPER futures (Comex July) down $0.082 to $2.575 a pound
- OIL futures US Session (Nymex July) down $3.43 to $36.17 a barrel
- CRB Index down 4.32 pts to 134.90
- AUDUSD trading at 0.6851
- EURUSD trading at 1.1296
- GBPUSD trading at 1.2600
- USDJPY trading at 106.8500
- USD Index US Session (ICE June) up 0.810 to 96.760
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The bears finally came out in force to drive the US lower in a big way. Major Indexes collapsed right from the open in a move that started unexpectedly in the Asian session in the overnight DOW and SP500 futures. The futures started to sell off and dragged Asia and the ASX down with it as bears piled the pressure on. The move down that continued during the European and US sessions was a big squeeze setup of buyers prior to the US open causing selling pressure from the opening bell. There was no buying and everything was on sale as economic fundamentals and the Feds more negative view of the recovery finally caught up with the bulls to trigger the selloff. US Unemployment claims remain high and inflationary data suppressed which supports the Feds view of a slow recovery with little inflationary concerns. Add on top of that the increased fear of a resurgence of the coronavirus, the action saw buyers in a panic. The DOW closed down 6.90% while the broader SP500 was down 5.89% and the Nasdaq ended up 5.27% for the session. In Europe, major Indexes followed on from the weakness in Asian trading to start on the back foot and press lower all session. The selloff was a reality check for bulls who expected a quick and clean recovery. The question will be now if Central banks are prepared to continue to pump in money if the selloff accelerates or whether they have used all their ammunition on the V-shaped recovery.
The USD Index bounced as the safe haven trade into the dollar was back. US bonds rallied as yields pushed lower to put pressure on dollar bears. There may still be a lot of unwinding into the USD as shorts are squeezed out of the action. The EURUSD also reversed fortunes as the dollar rallied and buyers locked in some gains. Price did not collapse as expected so we will be watching to see how price reacts on a rally and whether sellers will hold a lower high. The GBPUSD also found selling pressure during the Asian session which continued on until the close of the US. The AUDUSD was hit harder than most as traders went risk off into the pair. Price pushed below the 0.6900 zone which was the anchor to the trend up so we will watch now for a lower high that may lead to a further unwind of longs. The USDJPY moved lower through support as the YEN safe haven buying outweighed the USD weakness.
SPOT GOLD did spike higher during the European session but was quick to give up the gains as the USD rallied to pressure price. It will be interesting to see what plays out with gold as price is still holding the trend up but rejecting the highs. Aussie gold rallied hard as the AUD fell over so Aussie gold stocks are expected to open strong. Crude Oil fell on expectations that a hit to the global economy will hit demand as recent US inventory data showed stockpiles were higher than expected. The Copper rally came to an abrupt halt as prices fell over and a wave of profit taking flooded the market. Late buyers were squeezed out of the action but the trend up still remains in tact.
Cryptocurrencies moved lower along with the overall risk off tone into share Indexes. Bitcoin is currently trading at $9351.3 down 5.42% while Ethereum is at $232.89 down 6.37% and Ripple is at $0.19085 down 6.29%.
The ASX200 started off the session on the back foot yesterday and then was hit hard through out the day as overnight US markets and Asian markets sold off. The index closed out the session down 187.8 with all sectors bar Gold getting hit. Energy and Financials saw the brunt of the selling down 5.42% and 5.04% consecutively. Falling stocks outnumbered advancing ones by 943 to 328 and 345 ended unchanged.
The ASX200 is expected to open down 120 points after the US fell apart overnight.
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ECONOMIC DATA OUT TODAY (AEDT)
JPY Revised Industrial Production 2:30pm
GBP GDP, Manufacturing Production and Goods Trade Balance 4pm
EUR Industrial Production 7pm
USD Import Prices 10:30pm
USD Prelim Consumer Sentiment 12am
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SPI200 INTRADAY LEVELS TO WATCH
