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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 17/07/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures up 14 pts to 5990
- SP500 down 10.99 pts to 3215.57
- NASDAQ down 76.66 pts to 10473.83
- Dow Jones down 135.39 pts to 26,734.71
- FTSE100 down 41.96 pts to 6250.69
- DAX30 down 56.01 pts to 12,874.97
- GOLD futures US session (Aug) down $17.10 to $1796.70 an ounce
- COPPER futures (Comex Sept) up $0.0098 to $2.8948 a pound
- OIL futures US Session (Nymex Aug) down $0.47 to $40.73 a barrel
- CRB Index down 0.40 pts to 140.82
- AUDUSD trading at 0.6971
- EURUSD trading at 1.1379
- GBPUSD trading at 1.2557
- USDJPY trading at 107.3000
- USD Index US Session (ICE Sept) up 0.231 to 96.270
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US indexes came under pressure as stock market bulls battle with the increasing number of virus cases. The US may be flattening a curve but it may be the wrong curve as the economic recovery stalls. A rise in the number of Covid-19 cases took the shine out of the recent rally and saw some bulls happy to lock in gains in a broader risk off mood. Data out showed that the number of unemployment claims was slightly higher than expected which pressured markets while retail sales came out higher for the month but is expected to show contraction again as states go back into lockdown. Bond prices continue to edge higher while yields fall which is expected to support the safe haven nature of the USD. Traders remain solely focused on stock market movements for direction. Since the bounce from the selloff in March, markets such as FX have been correlated to the swings in stocks. That has been motivated by the notion that as poor as the data may be in coming months, you have a fiscal and monetary backstop. The DOW closed down 0.50% and the broader SP500 was down 0.34% while the Nasdaq was under more pressure and ended down 0.73% for the session. In Europe, major Indexes started the session on the back foot but managed to edge higher off the lows into the close in anticipation of the EU stimulus package. The ECB keep policy steady and said that the bank expected a pending European Union stimulus scheme to favour grants over loans much to the delight of traders.
The USD Index saw some choppy action as price swung between gains and losses for the session. The dollar fell hard down to support during the European session only to make back all the move plus more with a rally into the US close as shares came under pressure. Price is still trending lower but key support is showing signs of holding which may lead to further pressure on the upside. The EURUSD was also ‘swings and roundabouts’ as price chopped higher then lower again along with the USD. Many expect that Europe is in a better position to rebound than the US so the Euro may be favoured longer term over the USD. The GBPUSD was also a bit of a mess lacking any real direction. Sellers continued to defend higher levels and it seems that buyers may be bracing themselves for a potential sharp USD rally if shares take a hit on lockdown concerns. The AUDUSD found a bit more direction which was lower. The share market pressure in the Asian session and into the European session had sellers hold price action down. Still the longer term trend remains up although there looks to be more sellers coming into the fray to nibble at some short positions. The USDJPY rallied as safe haven buyers came out to play and push prices higher to squeeze out shorts into the resistance zone around 107.400. We may see a reaction lower off the zone as buyers lock in some gains.
SPOT GOLD came under constant selling pressure right from the start of Asian trade. The USD pressured buyers and forced them to close and sell back into the market. The safe haven nature of Gold is still eluding the bulls but price is at a levels where it has bounced from previously so watch for a fall in the dollar to trigger bulls back into action. Crude Oil moved back into the $40 area as recent buyers were forced back out of the action. If price can not get up and through the $41 area, then we expect to see some exhaustion from bulls and sellers to swing into action and push price lower. Copper rallied off the lows to weather the pressure from the USD rally. Price found some sellers at the 2.9055 area so we may see a lower high hold and another move down.
Cryptocurrencies came under pressure at the start of the European session but did manage to limit the damage and make back some of the losses. Bitcoin is trading at $9114.4 down 1.16% while Ethereum is at $232.80 down 2.68% and Ripple is at $0.19221 down 3.04%.
The ASX200 a rough day for the bulls yesterday with sellers pressuring the market lower right from the open. In the end the index was down 42 points to 6010.9. The Gold and Healthcare sectors were the biggest drag on the action as falling stocks outnumbered advancing ones by 608 to 586 and 359 ended unchanged. The Employment data was mixed with the number of employed coming in better than expected while the unemployment rate was weaker moving to 7.4 from 7.2% to drag on the market.
The ASX200 is expected to open up 15 points as the SPI200 struggled to make back any of the days losses into the US close.
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ECONOMIC DATA OUT TODAY (AEST)
EUR Final CPI Data 7pm
GBP BOE Gov Bailey Speaks 8pm
USD Building Permits and Housing Starts 10:30pm
USD Prelim Consumer Sentiment and Inflation Expectations 12am
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SPI200 INTRADAY LEVELS TO WATCH
