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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 23/09/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures up 60 pts to 5831
- SP500 up 34.51 pts to 3315.57
- NASDAQ up 184.84 pts to 10,963.64
- Dow Jones up 140.48 pts to 27,288.18
- FTSE100 up 25.17 pts to 5829.46
- DAX30 up 51.95 pts to 12,594.39
- GOLD futures US session (Oct) down $6.10 to $1896.00 an ounce
- COPPER futures (Comex Dec) up $0.0380 to $3.0700 a pound
- OIL futures US Session (Nymex Oct) up $0.29 to $39.60 a barrel
- CRB Index down 0.31 pts to 147.52
- AUDUSD trading at 0.7169
- EURUSD trading at 1.1706
- GBPUSD trading at 1.2736
- USDJPY trading at 104.9400
- USD Index US Session (ICE Dec) up 0.309 to 93.993
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US indexes were led higher by some bargain hunting into big tech after the recent sell down into the Nasdaq. The tech heavy index again outperformed the SP500 and DOW as Amazon rocketed higher from the open after being upgraded to ‘outperform’ which dragged other tech stocks along for the ride. The Fed Reserve and Powell continued to put pressure on Congress for further stimulus so as not to derail the recovery. Congress remains focused on a new Supreme Court nomination and traders on the implications of what that means to elections and stimulus. We do not expect to see stimulus pushed through Congress prior to Nov 2 which should cap any bullish enthusiasm into shares….but still, a ramp of a few good tech stocks can push the overall markets higher and trigger risk on again. The DOW closed up 0.52% while the broader SP500 ended up 1.05% and the Nasdaq led the charge to end up 1.71% for the session. In Europe, major Indexes made back some of the recent losses but were not as positive about the near term outlook as US markets and investors remained tentative. Buyers were well contained from the open with the EuroStoxx50 Index ending flat while the US rallied into the close. Expect to see further pressure on markets as lockdowns crimp growth.
The USD Index continued the push higher after Chicago Fed President Charles Evans highlighted the potential for raising rates earlier than traders initially expected and catching many off guard. He also mentioned that ‘more quantitative easing may not provide another lift to the US economy’ and said fiscal stimulus is what is needed. A perfect storm may be brewing for the bears if Congress can not start to re-focus on stimulus and the USD continues to pressure higher on rate rising expectations. The EURUSD found further selling pressure as the USD rallied and lockdowns quieten the bulls. Price pushed lower to test down to the 1.1700 level which it will need to hold if there is a chance for higher prices. A clean break of the level will see another wave of selling pressure as the next level of buyers are squeezed out of the action. The GBPUSD had a choppy session after British PM Boris told people to work from home whenever possible and ordered bars and restaurants to close early while the new restrictions will possibly last for six months. We do not expect to see any love into the Pound as the trend is down and USD pressures higher. The AUDUSD broke down out of minor consolidation and through the 0.7200 mark. Expect to see further pressure today in the Asian session as more buyers start to realise that they are on the wrong side of the market. The USDJPY rallied being dragged higher by a lift in the USD. Expect to see a further push higher and squeeze on recent sellers but price may need to reset at a higher level first above 104.400 key support.
SPOT GOLD does not look so healthy as price pushed below the 1900 level and hovers ever so tentatively at the level currently. Bulls may continue to come under pressure so we do not expect too much love into local gold stocks today. A break down below 1895 on the spot price may see another leg lower. Crude Oil did bounce back slightly but remains looking heavy as the pressure from a rising USD weighs. Sellers were happy to step into the action around the 40.00 level so we may see this hold as a lower high if share markets come under pressure tonight. Copper spent all the Asian session and through the US rallying as bulls continue to support price off lows. Price remains below recent major lows and we expect that higher levels will be triggered by a risk on tone into equities. If share markets take another hit, then along with a stronger USD, sellers will dive back into the action. For now, price remains in a broad range until there is a key change in sentiment.
Cryptocurrencies ended the US session relatively flat as the higher USD weighed on bullish sentiment. Bitcoin is currently trading at $10528.8 up 0.47% while Ethereum is at $345.10 down 0.38% and Ripple is at $0.23375 up 0.73%.
The ASX200 put in a better performance than expected yesterday considering the overnight selloff in Global Indexes. At the close the index ended down 38.5 points to 5784.1 with the Gold, Metals and Mining and Resources sectors leading the charge lower. The IT and Consumer Staples sectors were the only sectors to end with gains. Falling stocks outnumbered advancing ones by 922 to 339 and 334 ended unchanged.
The ASX200 is expected to open up 55 points after the SPI200 ramped higher overnight along with the bounce in European and US Indexes.
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ECONOMIC DATA OUT TODAY (AEST)
AUD Flash Manufacturing and Services PMI 9am
NZD Official Cash Rate and RBNZ Rate Statement 12pm
EUR French Flash Services and Manufacturing PMI 5:15pm
EUR German Flash Services and Manufacturing PMI 5:30pm
EUR Flash Services and Manufacturing PMI 6pm
GBP Flash Services and Manufacturing PMI 6:30pm
USD Flash Services and Manufacturing PMI 11:45pm
USD Ffed Chair Poewell Testifies 12am
USD Crude Oil Inventories 12:30am
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SPI200 INTRADAY LEVELS TO WATCH
