TRADESETUP

June 30, 2020

The Morning Jumpstart

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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 30/06/20 (as at 7:15am AEST)

  • SPI200 (Sept) overnight futures up 67 pts to 5874
  • SP500 up 44.19 pts to 3053.24
  • NASDAQ up 116.93 pts to 9874.15
  • Dow Jones up 580.25 pts to 25,595.80
  • FTSE100 up 66.47 pts to 6225.77
  • DAX30 up 142.73 pts to 12,232.12
  • GOLD futures US session (Aug) up $3.80 to $1784.10 an ounce
  • COPPER futures (Comex Sept) up $0.025 to $2.684 a pound
  • OIL futures US Session (Nymex Aug) up $1.14 to $39.63 a barrel
  • CRB Index up 2.62 pts to 137.04
  • AUDUSD trading at 0.6864
  • EURUSD trading at 1.1238
  • GBPUSD trading at 1.2297
  • USDJPY trading at 107.6000
  • USD Index US Session (ICE Sept) up 0.031 to 97.435

Major US indexes moved higher from the open as investors positioned themselves for quarter end with concerns for rising virus cases being offset by improving financial data. Markets were supported by a spike in Boeing shares after the companies re-certification flight for Boeing’s 737 MAX jets which marked a key step towards getting the previously grounded planes back in operation. The market seems intent on further stimulus as many analysts thesis for a ‘v-shaped’ recovery is based on continuing the stimulus party train going. BlackRock Investment Institute downgraded US equities to neutral citing risks to the potential for fading stimulus, a prolonged epidemic and increasing US-China trade tensions. Trumps administration is still touting the recovery in one corner, while in the other, the Fed stresses uncertainty and further challenges facing the US economy. Powell says that a full recovery will depend on success in containing the virus and will be unlikely until people are confident it is safe to be out and about. The DOW closed up 2.32% while the broader SP500 was also up 1.47% and the Nasdaq ended up 1.20% for the session. In Europe, major Indexes ended higher in a choppy session after being saved by the rally on the open in the US. Banks performed the best after data showed a recovery in economic sentiment.

The USD Index spiked at the start of the US session to take out sellers that built up earlier in the European session. The move up was attributed to quarter end repositioning ahead of Jobs data Thursday. The squeeze on shorts was clear but price continues to hold below key resistance on the dollar index at 97.70. The EURUSD was obviously hit hard once the dollar started the short squeeze. Price dropped around 60 pips off the highs which will make bulls tentative going forward. The 1.1200 zone continues to hold and provide support. GBPUSD was already under pressure before the USD spiked as economic data out was weaker than expected. Also weighing on the Pound was concerns about how Britain’s government will pay for its planned infrastructure program and also whether Britain can seal the deal with the EU. The Pound now looks set to push down into the 1.2200 zone where it has previously found broad support. The AUDUSD looks heavy and not supportive of higher prices on share Indexes. Price could only make back some of the early losses on the back US stock market rally as buying was offset by the dollar strength. Bulls are now held down at 0.6895 so we expect to see further choppy action in the near term. The USDJPY was lifted thanks to the rally into the USD and lack of safe haven YEN buying to offset the gains. Price rallied up through previous key highs at 107.600 so we will be watching for a higher low off the level for a buying opportunity.

SPOT GOLD looks to be consolidating the highs as recent safe haven buyers are happy to hold even under USD and bullish share market pressure. If price can move up through 1775 we may see some further bullish action for a spike higher. Crude Oil took off once the European session got underway and never looked back even after a spike in the dollar. Price was supported by news of a better than expected rebound in Chinas economic activity. Copper continues to hold minor higher lows on expectations that the global economy will continue to re-open. Buyers do not seem concerned for now that there may be further lockdowns that will put a dent in demand for the metal.

Cryptocurrencies were moving lower through Asian and European trade but then managed to fight back during the US session to end with minor gains. Bitcoin is trading at $9210.2 up 0.92% while Ethereum is at $228.60 up 1.48% and Ripple is at $0.17855 up 0.58%.

The ASX200 was hit hard on the open yesterday but did manage to minimise the losses into the close. The index ended down 89.1 points to 5815 after being down over 130 points late in the session. All sectors were down except Gold with Energy and Industrials hit the hardest. Falling stocks outnumbered advancing ones by 908 to 430 and 320 ended unchanged.

The ASX200 is expected to open up 70 points as the SPI200 was pushed higher into the US close. We expect to see some window dressing into the end of the Financial year today so the market may be choppy.

ECONOMIC DATA OUT TODAY (AEST)

JPY Unemployment Rate 9:30am

JPY Prelim Industrial Production 9:50am

CNY Manufacturing PMI 11am

AUD Private Sector Credit 11:30am

AUD RBA Deputy Gov Debelle Speaks 1:30pm

GBP Current Account and Final GDP 4pm

EUR CPI Flash Estimate 7pm

CAD GDP 10:30pm

USD Consumer Confidence 12am

USD Fed Chair Powell Testifies 2:30am

SPI200 INTRADAY LEVELS TO WATCH

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