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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 15/07/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures up 28 pts to 5941
- SP500 up 42.30 pts to 3197.52
- NASDAQ up 97.73 pts to 10488.58
- Dow Jones up 556.79 pts to 26,642.59
- FTSE100 up 3.56 pts to 6179.75
- DAX30 down 102.61 pts to 12,697.36
- GOLD futures US session (Aug) down $1.20 to $1812.90 an ounce
- COPPER futures (Comex Sept) down $0.0165 to $2.9385 a pound
- OIL futures US Session (Nymex Aug) up $0.34 to $40.44 a barrel
- CRB Index down 0.69 pts to 139.99
- AUDUSD trading at 0.6977
- EURUSD trading at 1.1395
- GBPUSD trading at 1.2559
- USDJPY trading at 107.2400
- USD Index US Session (ICE Sept) down 0.232 to 96.175
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US indexes continued the merry-go-round to bounce back from the previous sessions selloff into the close. Buyers lifted prices to shrug off earlier weakness from the European session to ramp prices right from the US open. The NASDAQ did struggle unlike the DOW which closed right back up at the previous sessions highs. Investor attention was fixed on the start of earnings season with mixed results from banks to kick it off. JPMorgan and Citigroup beat consensus estimates thanks to strong trading revenue, while Wells Fargo cut its dividend by 80% and reported its first-quarter loss in more than a decade. The three banks also locked away nearly $28 Billion to fortify themselves for an expected wave of bad loans. The DOW closed up 2.13% and the broader SP500 was up 1.34% while the Nasdaq was bounced back slightly ending up 0.94% for the session. In Europe, major Indexes came under early pressure as expected but were lifted late in the session thanks to a strong open in the US. Investors will be focused on earnings and for evidence to support the V-shaped recovery narrative that has lifted stocks.
Tensions between the US and China continue to increase as Trump signed into law sanctions on Chinese officials who crack down on Hong Kong residents. Legislation was approved, after markets closed, to penalize banks doing business with Chinese officials who implement Beijing’s draconian new national security law on Hong Kong. Trump also said that he is not interested in talking to China regarding the Phase 2 deal.
The USD Index initially spiked on the open of the European session as Indexes came under pressure but then price started the march lower to close back down below support around 96.26. The Dollar is brushing aside any strength and continues to hold key lower highs and give a smile to share market bulls. The EURUSD rallied on the back of the dollar weakness and continues to trade in parallel (and opposite) to the USD. Buyers were also supported by expectations for the EU stimulus package. The GBPUSD was under pressure all of the European session after economic data disappointed. Price later bounced back hard at the start of US trade once US share markets began to rally. Price action has now cleared out a lot of buyers so we expect to see a further reaction higher but will be interested to see if price holds a major lower high below 1.2650. The AUDUSD struggled to make up its mind early in the European session but buyers managed to soak up any spike lower to hold support until US shares opened and rallied. Price is extended so we expect to see some gains locked away and a reaction lower from sellers up around the 0.6995 zone. The USDJPY was happy to hold onto the recent gains up around 107.300. Price did not really react to the USD selloff suggesting some selling into the YEN also.
SPOT GOLD initially spiked lower as share Indexes came under pressure during the European session and the USD edged higher. Price was later supported by the fall into the USD. The action is currently ranging and capped around 1813 and supported around 1792. Expect that there is a general theme of safe haven buying longer term but all could change quickly if the dollar charges higher. Crude Oil managed to hold its ground after earlier weakness and bulls were only saved from further weakness by the rally into shares. All markets seem to have there focus firmly on share markets with Oil tentative to kick higher from here. Copper managed to hold minor higher levels as stubborn bulls continued into the metal. Price is not showing the strength and conviction of a few days ago which suggests a further squeeze lower is on the cards.
Cryptocurrencies were mixed but prices generally shrugged off earlier weakness along following the DOW to rally into the close of the US. Bitcoin is currently trading at $9263.9 up 0.12% while Ethereum is at $241.18 up 0.43% and Ripple is at $0.19907 up 0.21%.
The ASX200 was hit on the open yesterday but managed to fight back and make back some of the losses into the close. The index ended down 36.4 points to 5941.1. The IT sector was hit hardest ending down 4% while Gold ended down just over 2% for the day. Falling stocks outnumbered advancing ones by 895 to 329 and 335 ended unchanged.
The ASX200 is expected to open up 30 points after the SPI200 followed the US higher into the close.
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ECONOMIC DATA OUT TODAY (AEST)
AUD Westpac Consumer Sentiment 10:30am
JPY BOY Policy Rate, Outlook Report and Monetary Policy Statement Tentative
GBP CPI and PPI Data 4pm
GBP MPC Member Tenreyro Speaks 6pm
USD Empire State Manufacturing Index and Import Prices 10:30pm
USD Industrial Production 11:15pm
CAD Overnight Rate and Rate Statement 12am
USD Crude Oil Inventories 12:30am
USD Beige Book 4am
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SPI200 INTRADAY LEVELS TO WATCH
