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OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 30/07/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures up 54 pts to 6029
- SP500 up 40.00 pts to 3258.44
- NASDAQ up 140.85 pts to 10,542.95
- Dow Jones up 160.29 pts to 26,539.57
- FTSE100 up 2.20 pts to 6131.46
- DAX30 down 13.02 pts to 12,822.26
- GOLD futures US session (Aug) up $19.9 to $1964.5 an ounce
- COPPER futures (Comex Sep) up $0.0162 to $2.9337 a pound
- OIL futures US Session (Nymex Sep) up $0.28 to $41.32 a barrel
- CRB Index up 0.86 pts to 144.34
- AUDUSD trading at 0.7189
- EURUSD trading at 1.1785
- GBPUSD trading at 1.2992
- USDJPY trading at 104.9600
- USD Index US Session (ICE Sept) down 0.412 to 93.235
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US indexes moved higher into the close as the US Fed Reserve reiterated its commitment to lower rates for longer. In its statement, the Fed repeated its pledge to use its ‘full range of tools’ to support the economic recovery but did caution that the outlook will depend on the course of the virus. The Fed said that economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year and still not up to scratch. With the Feds focus on the virus, it highlights the uncertainty that the economy is facing and the need for a vaccine. Not surprisingly, Trump was in the news saying that a vaccine may be approved soon…he has impeccable timing. The Fed support for the economy was a good thing for the bulls as it is basically saying that the ‘Fed backstop’ will remain in place. The DOW closed up 0.61% while the broader SP500 was up 1.24% and the Nasdaq was bounced back ending up 1.35% for the session. In Europe, major Indexes were generally flat ahead of the Fed Reserve rate statement. They may play catchup on the open when Europe kicks into action and find support from the continued strength into the EURO. Earnings triggered some volatility into the major Indexes although buyers were generally happy to stay on the sidelines.
The USD Index was already under pressure coming into the Fed statement and then continued to move lower once traders got confirmation that the stimulus will continue to flow and lower rates will be here to stay. Expecting to see the dollar move down to the 92.50 zone where we may see a reaction from buyers…if not, things may get ugly quick. The EURUSD moved higher as the Dollar looses its appeal and the EU does better on containing the virus outbreak. The 1.1830 area may provide some resistance and see buyers lock away some gains. The GBPUSD cracked the 1.3000 zone and looks likely to continue the march higher. The next target on the upside for the bulls is 1.3200. The AUDUSD found support from both the USD fall and the rally into US share markets. The price action is choppy but still holding higher lows which suggests that buyers continue to look to new highs as long as Indexes continue to be supported. The USDJPY continued lower under the weight of the USD selling. Expect to see this move lower continue as the momentum is well entrenched to the downside.
SPOT GOLD edged back up to recent highs after the sudden selloff the previous session. Buyers are tentative but happy to hold higher levels. As long as the Dollar move lower continues then Gold will head higher. Crude Oil rallied and held above the 40 mark as bulls were supported by the commitment from the Fed to continue stimulus support for the economy. Buyers remain weary of the increasing virus numbers and the US’s lack of containment and dependence on a vaccine. If more states go back into lockdown then demand for crude will take a hit. Copper also rallied as buyers held minor higher levels although price found selling pressure up at recent highs around 2.940. The action remains range bound and extended up at highs so we are watching for cracks in buying to start to appear.
Cryptocurrencies edged back higher with Bitcoin moving back above the 11,000 level. Bitcoin is currently trading at #11236.0 up 2.44% while Ethereum is at $321.85 up 0.70% and Ripple is at $0.24524 up 4.86%.
The ASX200 followed on from the previous sessions weakness yesterday to end down 14.1 points to 6006.4. Traders seemed happy to either remain on the sidelines or lock in some gains ahead of US Fed Statement and Stimulus news. The Materials, Resources and Energy Sectors saw the brunt of the selling while Utilities and Financials ended with gains. Falling stocks outnumbered advancing ones by 724 to 519 and 352 ended unchanged.
The ASX200 is expected to open up 50 points as the SPI200 rallied on the back of a positive US session.
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ECONOMIC DATA OUT TODAY (AEST)
JPY Retail Sales 9:50am
AUD Building Approvals and Import Prices 11:30am
EUR German Prelim CPI All Day
EUR German Unemployment Change 5:55pm
EUR German Prelim GDP 6pm
EUR Unemployment Rate 7pm
USD Advance GDP and Unemployment Claims 10:30pm
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SPI200 INTRADAY LEVELS TO WATCH
