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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 10/07/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures down 24 pts to 5896
- SP500 down 17.89 pts to 3152.05
- NASDAQ up 55.25 pts to 10547.75
- Dow Jones down 361.19 pts to 25,706.09
- FTSE100 down 106.54 pts to 6049.62
- DAX30 down 5.35 pts to 12,489.46
- GOLD futures US session (Aug) down $12.90 to $1807.70 an ounce
- COPPER futures (Comex Sept) up $0.0130 to $2.8370 a pound
- OIL futures US Session (Nymex Aug) down $1.31 to $39.59 a barrel
- CRB Index down 1.50 pts to 140.46
- AUDUSD trading at 0.6959
- EURUSD trading at 1.1284
- GBPUSD trading at 1.2606
- USDJPY trading at 107.2300
- USD Index US Session (ICE Sept) up 0.384 to 96.725
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US indexes came under pressure right from the open as data showed more Americans filing for jobless benefits and a record 32.9 million people were collecting unemployment checks in the third week of June. The news supports the Feds view that the labour market will takes years to recover from the coronavirus hit. One good sign for the US is that the Bank liquidity crunch is stabilizing after a shortfall of bank reserves led to a record surge in short-term borrowing costs. The Fed was forced into intervening in the Repo market to support the system which is now showing signs that banks are no longer having to tap this source for short term funding.
The Nasdaq was again one bright spot and continues to look unstoppable as price ended on new highs to continue to grow the bubble. The DOW closed down 1.39% and the broader SP500 was also down 0.56% while the Nasdaq ended up 0.53% for the session. In Europe, major Indexes were under pressure on global growth concerns due to the increasing likelihood of further shutdowns. The US employment data sent Indexes spiking lower into the European close and start to pressure key support levels. The Enthusiasm from the Chinese recovery and stock market rally has waned with further heat expected to come out of the markets into the weekend.
The USD Index bounced off key support zones as share markets came under pressure. The dollar found some safe haven buying to ramp higher but the overall trend is still being held down by sellers. If we see further safe haven interest into the dollar and a good rally from current levels on the dollar index, then expect to see pressure on shares increase. The question is which market is leading which…dollar leading or Indexes leading??!! One thing that also triggered some safe haven buying was the US Supreme Court ruling on Thursday that a New York prosecutor can obtain Trump’s financial records. The EURUSD fell over off the 1.1350 level as expected but not after cleaning out some sellers first on a washout of resistance. The Euro is showing stronger signs of coming share market weakness than the USD as price starts to break support levels. The GBPUSD continues to look okay as buyers continue to hold higher lows and soak up selling from the Dollar rally. If price can not hold current levels and start to lift again, then a move down through 1.2590 may trigger a wave of selling and break the current trend up. The AUDUSD obviously came under pressure with the share market selloff. Price was earlier struggling to hold the 0.6995 zone and finding some sellers jumping into the action. If the virus fears continue to rise and bullish sentiment disappears, then expect the Aussie to come under further pressure and start to attack 0.6920 and lower as we see a long position unwind. The USDJPY was choppy as the Dollar strength was offset by safe haven Yen buying. Price looks weak and may see a move lower to clean out some buyers today.
SPOT GOLD was hit on the back of the USD rally as recent buyers started to lock in some gains. Price still remains in an uptrend and we may just be seeing a healthy correction prior to a new wave of buying. Bulls will need to see price supported from here for a chance at new highs…but this will depend on the USD movements in the near term. Crude Oil was hit hard on concerns for future demand as US coronavirus cases surge and the death toll rises which all points to further lockdowns. The move cleaned out a lot of buyers and we will see another wave of selling if price breaks through 39.25. Copper is showing early stages of buyers unwinding into the growing negative sentiment as price fell away from the 2.8750 zone as expected. Price has been ramped up into this levels over the last few days and we expect that further lockdowns will bring into question demand and in turn hit the metals price to squeeze out buyers.
Cryptocurrencies came under pressure to squeeze out some recent buyers as share indexes moved lower. Bitcoin is currently trading at $9244.2 down 1.95% while Ethereum is at $241.63 down 2.42% and Ripple is at $0.20158 down 1.93%.
The ASX200 rallied from the open yesterday and continued to edge higher most of the session until the final hour when it sold off around 40 points. In the end the Index still ended with gains to close up 35.2 points to 5955.5. Buyer seem to be getting a little nervous and sellers more active which may not bode well for coming action. Gains in IT, Energy and the Gold sectors helped the index hold onto the gains. Rising stocks outnumbered declining ones by 761 to 463 and 321 ended unchanged.
The ASX200 is expected to open down 25 points after the US found further pressure to close in the red.
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ECONOMIC DATA OUT TODAY (AEST)
JPY PPI 9:50am
EUR French Industrial Production 4:45pm
EUR Italian Industrial Production 6pm
CAD Employment Change and Unemployment Rate 10:30pm
USD PPI Data 10:30pm
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SPI200 INTRADAY LEVELS TO WATCH
