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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 16/09/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures up 44 pts to 5941
- SP500 up 17.66 pts to 3401.20
- NASDAQ up 133.67 pts to 11,190.32
- Dow Jones up 2.27 pts to 27,995.60
- FTSE100 up 79.29 pts to 6105.54
- DAX30 up 24.01 pts to 13,217.67
- GOLD futures US session (Oct) down $1.20 to $1953.50 an ounce
- COPPER futures (Comex Dec) up $0.0250 to $3.0645 a pound
- OIL futures US Session (Nymex Oct) up $1.13 to $38.39 a barrel
- CRB Index up 1.26 pts to 147.76
- AUDUSD trading at 0.7304
- EURUSD trading at 1.1849
- GBPUSD trading at 1.2891
- USDJPY trading at 105.4200
- USD Index US Session (ICE Dec) up 0.055 to 93.115
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US indexes jumped up on the open but generally faded into the close to give up a lot of the earlier gains. The NASDAQ held up well as traders continue to see tech as the place to be and looked to ‘buy the dip’ looking for prices to push back to all time highs. Bulls were supported from the open after Chinese data came out stronger than expected to help boost commodity linked currencies and US data showed factory production increased for a fourth straight month. The US data supports the view that inflation pressures from low rates and stimulus may be building which may start to weigh on stocks so traders will be focused on the FOMC statement tonight. If the Fed is happy to stick to its commitment to stoking inflation and letting it run above average for longer, expect to see an increase in interest rate volatility and in turn stock prices which are at all time highs. The DOW lagged to close up 0.01% while the broader SP500 ended up 0.52% and the Nasdaq ended up 1.21% for the session. In Europe, major Indexes were lifted by retail and mining stocks on the back of the positive Chinese data. Also, data from Germany showed that investor sentiment rose signalling confidence in the recovery. In Brexit news, PM Boris is facing opposition within his own party to his proposed legislation that would breach the Brexit treaty.
The USD Index again reversed some earlier losses around the open of the US session as sellers were squeezed out of the action. Traders may be squaring up some positions ahead of the FOMC statement on rates and as data starts to hint at inflationary pressures. The EURUSD gave up all of its earlier gains and more as the dollar rallied and brexit concerns weighed on the currency pair. Price dropped over 50 pips from the highs to continue the choppy action and a break below 1.1840 could lead to a push down to 1.1800 and below. The GBPUSD continued to be knocked around thanks to the Brexit uncertainty and gains were capped as the Dollar started to show strength. We may see a squeeze on shorts if further news comes out that Boris may not get his plans through parliament. If so, a break up through 1.2920 off current levels would be the trigger. The AUDUSD spiked up through the 0.7300 zone yesterday after Chinese data was released. Price brushed aside the weaker than expected Aussie housing price index and focused on improving conditions for commodities. If the Aussie can hold around current levels and push up through 0.7310 then we may see a push to new short term highs. The USDJPY did extend down to the 105.300 area but not after an earlier flush of sellers. Price may be extended so any upside pressure in to the USD will see some buyers step into the action around support.
SPOT GOLD was hit off the highs as the dollar rallied. Price will need to hold above the 1950 area to drag in further buyers for a run higher. If not, then we expect to see a deeper USD led correction to 1940 and potentially lower. Crude Oil spiked hard to squeeze out a lot of recent selling action. Price was supported by concerns over hurricane supply disruptions in the US. There may be more upside to come although continued demand concerns may throw a spanner in the works for bulls. Copper managed to push back into the highs around 3.090 before sellers jumped in to lock away some gains on the USD rally. If price starts to again fail on a push back up then we expect to see a deeper correction lower to test down to 3.000.
Cryptocurrencies were mixed overnight with Bitcoin gaining while others moved lower. Bitcoin is currently trading at $10860.2 up 1.60% while Ethereum is at $365.32 down 3.03% and Ripple is at $0.24371 down 1.07%.
The ASX200 started the day on a positive note but then price was quick to fade under constant selling pressure. At the close, the index could not end in the green and ended the day down 4.7 points to 5894.8. The Gold sector along with IT and Metals and Mining stemmed the selling while Financials and Energy were the biggest drag on the action. Rising stocks outnumbered declining ones by 709 to 547 and 380 ended unchanged.
The ASX200 is expected to open up 45 points as the SPI200 was ramped higher from the night session open potentially on the back of positive Chinese data.
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ECONOMIC DATA OUT TODAY (AEST)
AUD MI Leading Index 10:30am
GBP CPI and PPI Data 4pm
EUR Trade Balance 7pm
CAD CPI Data 10:30pm
USD Retail Sales 10:30pm
USD Crude Oil Inventories 12:30am
USD FOMC Statement and Fed Funds Rate 4am
USD FOMC Press Conference 4:30am
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SPI200 INTRADAY LEVELS TO WATCH
