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OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 20/08/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures down 15 pts to 6102
- SP500 down 14.93 pts to 3374.85
- NASDAQ down 64.38 pts to 11,146.46
- Dow Jones down 85.19 pts to 27,692.88
- FTSE100 up 35.36 pts to 6111.98
- DAX30 up 95.57 pts to 12,977.33
- GOLD futures US session (Aug) down $60.7 to $1938.70 an ounce
- COPPER futures (Comex Sep) up $0.0242 to $2.9992 a pound
- OIL futures US Session (Nymex Sep) down $0.10 to $42.79 a barrel
- CRB Index up 0.31 pts to 152.00
- AUDUSD trading at 0.7182
- EURUSD trading at 1.1842
- GBPUSD trading at 1.3107
- USDJPY trading at 106.1100
- USD Index US Session (ICE Sept) up 0.766 to 93.025
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US indexes moved lower into the close after the US FOMC minutes pointed to a highly uncertain road to recovery. Buyers were earlier buoyed by strong earnings results by retailers Target and Lowes before sellers were quick to jump in on the Fed statement. The selling pressure shows that the key Indexes may be on shaky ground and running out of steam after the fastest recovery from a bear market in history. Many FOMC members see the need to potentially ease monetary policy further as the rebound in employment is already slowing and any improvement hinges on reopening of businesses. US bond markets reacted negatively as Yields rallied after the Fed decided not to pursue a form of ‘yield curve control’. This may affect lending rates down the line to hamper economic growth. The DOW again closed down 0.31% with the broader SP500 following and ending down 0.44% along with the Nasdaq that ended down 0.57% for the session. In Europe, major Indexes finished higher being supported by travel and leisure stocks. The bullish action may be blunted as the move came prior to the US Feds minutes so we expect the open later today to see some sellers.
The USD Index rallied in a move that started well ahead of the minutes as recent sellers locked in some gains to take some risk off the table. The move extended higher into the close once the minutes hit the news wires. Traders now will be awaiting further stimulus news before adding more shorts to the market. If the news fails to eventuate soon then we expect more sellers to close positions and price to squeeze higher. The EURUSD came under pressure from the rally into the Dollar as buyers were squeezed back out of the action. Price has pushed back into the range below the 1.1900 area after the rally stalled through the Asian and European sessions. The GBPUSD also took a big hit on the USD strength. Buyers gave up all of the recent gains from Tuesdays rally so expect that further buyers will be very tentative for now. The AUDUSD was also knocked off its highs after trapping some buyers on a push up through 0.7265. Price fell apart but still remains in a longer term uptrend. The coming action will depend on the USD’s next move. The USDJPY spiked higher to squeeze out recent sellers so any further move up may need to follow a pullback to take some heat out of the rally and drag in more buyers to provide support.
SPOT GOLD fell over as expected once the USD started to charge higher. Recent buyers were quick to exit long positions and push the price down nearly 3% for the session. The move lower will have shaken a few bulls and will trigger more holders to re-think whether they should exit to lock in some gains. Crude Oil held up okay under the USD pressure as price is also being buoyed by production cuts and expectations for a lift in demand. Price may still come under pressure in the near term as we see buyers failing up at the 43.20 zone. Buyers will need to see price hold above 42.60 for further upside. Copper took the opportunity to continue the rally as the USD was trading sideways before coming under pressure off the highs as the dollar started to move up. The move up took out previous highs around 3.000 so the next move will be key as to whether the break was a washout of highs or continuation of the trend up.
Cryptocurrencies were lower overnight thanks to the rally into the USD. Bitcoin is currently trading at $11732.1 down 2.43% while Ethereum is at $403.42 down 5.89% and Ripple is trading at $0.28628 down 7.72%.
The ASX200 had another good session yesterday to extend on the gains from the Tuesday. The index ended the day up 44.2 points to 6167.6. The IT sector led the charge with Consumer Discretionary a bit behind while Gold and Materials stocks were beaten down. Falling stocks outnumbered advancing ones by 635 to 632 and 352 ended unchanged.
The ASX200 is expected to open down 15 points as the SPI200 followed the US lower into the close.
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ECONOMIC DATA OUT TODAY (AEST)
CHF Trade Balance 4pm
EUR German PPI 4pm
EUR ECB Monetary Policy Meeting Accounts 9:30pm
USD Philly Fed Manufacturing Index and Unemployment Claims 10:30pm
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SPI200 INTRADAY LEVELS TO WATCH
