–
OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 8/07/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures down 30 pts to 5959
- SP500 down 34.40 pts to 3145.32
- NASDAQ down 89.76 pts to 10343.89
- Dow Jones down 396.85 pts to 25,890.18
- FTSE100 down 96.04 pts to 6189.90
- DAX30 down 116.65 pts to 12,616.80
- GOLD futures US session (Aug) up $14.00 to $1807.50 an ounce
- COPPER futures (Comex Sept) up $0.0123 to $2.7868 a pound
- OIL futures US Session (Nymex Aug) down $0.14 to $40.49 a barrel
- CRB Index up 0.66 pts to 141.56
- AUDUSD trading at 0.6949
- EURUSD trading at 1.1275
- GBPUSD trading at 1.2549
- USDJPY trading at 107.5700
- USD Index US Session (ICE Sept) up 0.228 to 96.910
–
US indexes were under pressure right from the open as some heat is starting to come out of the recent rally. Traders were weighed down by the increasing number of coronavirus cases as many parts of the US report thousands of new infections. The move lower may just be some profit taking as the Fed Reserve continues to reiterate that it will be a longer road to recovery than most are hoping for. They mentioned that with the rise in new cases, consumers are more cautious and more fiscal stimulus is needed from the government to help the economy recover fully. The DOW closed down 1.51% while the broader SP500 was down 1.08% and the Nasdaq ended down 0.86% for the session. In Europe, major Indexes were hit lower to follow on from the Asian sessions weakness. Forecasts for a deeper-than-feared recession in the euro zone dimmed optimism and triggered a risk off tone to the action. The European commission said that the EU is expected to contract by a record 8.7% before rising 6.1% in 2021 which is worse than previously forecast. Traders will be waiting for news from talks in Brussels on the European recovery fund which investors hope will provide grants for support.
The USD Index rallied off recent lows as major stock Indexes started to selloff. The move started in the Asian session and flowed over into the European session as safe haven buyers started to get active. Price reacted off support and we will be watching for signs of further follow through to the upside which will suggest a further risk off tone into shares. The EURUSD obviously fell away from the highs under the USD pressure as recent buyers were happy to lock in some gains. Price action is still looking tentatively bullish but is having trouble with resistance around the 1.1350 area. A break below 1.1200 will lead to some serious selling pressure but until then, longer term buyers are happy to hold tight to watch for an extension higher. The GBPUSD weathered the rally into the USD well, before rallying hard through recent minor highs. Buyers were supported by optimism that British and EU trade negotiators could find common ground and Brexit will take a step forward. The AUDUSD touched on the 0.7000 zone before being hit lower along with the risk off tone into the share market. Price did bounce back hard into resistance at 0.6980 before sellers again reacted to push price lower into the close. A key lower high may be on the cards and trigger a long squeeze lower but this will depend on market sentiment tonight and the idea of further stimulus. The USDJPY continues to be a choppy mess as price cleans out both lows and highs in some serious swings. The action mirrored the movements of the USD which we expect to continue in the near term as price continues to lack direction.
SPOT GOLD rocketed higher to take out recent highs around 1788. Price initially fell on the back of the rally into the USD but then made the sharp move higher, again cleaning out some buyers, once the dollar started to come under pressure. Bulls remain in control but we expect to see some heat come out of the move up and some gains locked away in the near term. Crude Oil continued to chop around the 40 zone. Price initially moved below the level as the USD rallied but managed to find some buyers for a spike back up before settling lower into the US close. The initial move lower as the Indexes came under pressure, shows some nervousness from bulls so we are watching the action for the potential for a lower high after a break below 39.85. Copper had some strange price action as bulls initially took a hit on the USD rally before turning with no warning to rally back up and through the previous highs. Usually we would expect some consolidation at lows as buyers build a higher low, but there was none which suggests some euphoria creeping into the action….which is generally a sign we are approaching a key turning point.
Cryptocurrencies eased off recent highs made in the previous session with the bulls taking a breather. Bitcoin is currently trading at $9238.1 down 0.45% while Ethereum is at $237.70 down 0.49% and Ripple is at $0.18352 down 1.57%.
The ASX200 had a very choppy session yesterday with three 60 points swings during the day. At the close, the index ended down 1.7 points to 6012.9 after the RBA left rates on hold at 0.25%. The Gold sector was the biggest gainer being followed by Metals and Mining and then Materials. Energy came under fire as the sector ended down 1.50%. Falling stocks outnumbered advancing ones by 704 to 527 and 327 ended unchanged.
The ASX200 is expected to open down 30 points after the US sold off into the close to drag the SPI200 down with it.
–
ECONOMIC DATA OUT TODAY (AEST)
JPY Bank Lending and Current Account 9:50am
EUR EU Economic Forecasts Tentative
USD Crude Oil Inventories 12:30am
–
SPI200 INTRADAY LEVELS TO WATCH
