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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 28/08/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures down 9 pts to 6076
- SP500 up 5.82 pts to 3484.55
- NASDAQ down 39.72 pts to 11,625.34
- Dow Jones up 160.35 pts to 28,492.27
- FTSE100 down 45.61 pts to 5999.99
- DAX30 down 93.79 pts to 13,096.36
- GOLD futures US session (Oct) down $15.20 to $1928.90 an ounce
- COPPER futures (Comex Dec) up $0.0150 to $2.9765 a pound
- OIL futures US Session (Nymex Oct) down $0.37 to $43.02 a barrel
- CRB Index up 0.25 pts to 152.70
- AUDUSD trading at 0.7259
- EURUSD trading at 1.1821
- GBPUSD trading at 1.3205
- USDJPY trading at 106.5500
- USD Index US Session (ICE Sept) up 0.019 to 93.015
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US indexes saw some rotation overnight as traders pushed the Nasdaq lower while the DOW found support to end with gains. Banks supported the action as investors digested the US Federal Reserve’s new strategy to adopt an average inflation target and aim to restore the United States to full employment. US Bond Yields lifted on expectations for inflationary pressure on the horizon although full employment seems a long way off yet as initial jobless claims hover above 1 million. The action lost steam late in the session after Nancy Pelosi issued a statement saying Democrats and Republicans remain far apart over the next stimulus bill. The DOW closed up 0.57% along with the broader SP500 which ended up 0.17% while the Nasdaq ended down 0.34% for the session. In Europe, major Indexes ended the session lower as the Fed news weighed on resource stocks while other sectors were held down also with buyers showing little enthusiasm to add any further risk.
The USD Index bounced around after the Feds new interest rate news. Price initially spiked lower before finding buyers to lift the index back above the 93.00 level. Traders will now be trying to decide whether the news will be longer term bullish or bearish for the dollar. The rate of recovery of major economies will be the factor for the respective currencies and therefore the carry trade (buying one currency while selling another) for the USD. The EURUSD obviously reacted in reverse to whip between gains and losses. In the end price ended lower for the session and may be range bound for a while while the USD figures out a direction. The GBPUSD managed to flush out the highs at 1.3267 on the Dollar move but then ended back below the 1.3240 area. Like the Euro, the Pound seems happy to remain in a holding pattern until the dollar makes a move. The AUDUSD also flushed out previous highs at 0.7276 only to end the session back below the level. Price remains in a very short term up trend but expect that new buyers may choose to remain on the sidelines for now until more certainty comes into the Dollar. If shares markets start to see some sellers lock in gains, then expect to see the Aussie move lower off the highs. The USDJPY eventually managed to hold the 105.900 area but not after a big squeeze of buyers on a spike lower. Once the Fed news hit the wires, price action started to lift and push back to previous highs which suggests a bullish outlook for the USD.
SPOT GOLD managed to flush out sellers on a spike up through 1950 on the back of the Fed Reserve inflation news only to get hit back down and lower into the close. The safe haven trade into gold is taking a back seat now with inflation on the cards for the Fed while the USD will continue to be the key driver for Gold moves. Crude Oil continued to be heavy off the 43.50 area as sellers were out in force overnight well outweighing buyers. Price held lower highs on the USD strength although spikes lower were met with buying as production cuts remain the backstop to fend off lower prices. Copper remained choppy but did end at the top end of the sessions range as bulls continued to provide support. Bulls remain committed to holding prices up near the 3.000 zone but the momentum up is struggling and and positive move in the USD will cap the action into the commodity.
Cryptocurrencies moved lower as the USD found some strength. Bitcoin is currently trading at $11273.5 down 2.03% while Ethereum is at $380.94 down 1.81% and Ripple is at $0.26376 down 5.42%.
The ASX200 rallied from the open only to give up the gains and drift lower into the close. The index ended the session up 9.8 points to 6126.2 with the Utilities, Energy and Financial sectors weighing on the action while Gold stocks found some love from bulls. Rising stocks outnumbered declining ones by 704 to 586 and 341 ended unchanged.
The ASX200 is expected to open down 10 points as the SPI200 came under some selling pressure overnight.
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ECONOMIC DATA OUT TODAY (AEST)
EUR German Consumer Climate and Import Prices 4pm
EUR French Prelim CPI and GDP 4:45pm
CAD GDP 10:30pm
USD Wholesale Inventories, Personal Spending and Goods Trade Balance 10:30pm
GBP BOE Gov Bailey Speaks 11:05pm
USD Consumer Sentiment and Inflation Expectations 12am
ALL Jackson Hole Symposium Day 2
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SPI200 INTRADAY LEVELS TO WATCH
