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OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 1/10/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures up 11 pts to 5813
- SP500 up 27.53 pts to 3363
- NASDAQ up 82.26 pts to 11,167.51
- Dow Jones up 329.04 pts to 27,781.70
- FTSE100 down 31.40 pts to 5866.10
- DAX30 down 65.09 pts to 12,760.73
- GOLD futures US session (Oct) down $4.30 to $1890.0 an ounce
- COPPER futures (Comex Dec) up $0.0323 to $3.0223 a pound
- OIL futures US Session (Nymex Nov) up $0.57 to $39.86 a barrel
- CRB Index up 1.75 pts to 148.51
- AUDUSD trading at 0.7166
- EURUSD trading at 1.1723
- GBPUSD trading at 1.2920
- USDJPY trading at 105.4600
- USD Index US Session (ICE Dec) down 0.037 to 93.890
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US indexes brushed aside presidential debate weakness in the Asian session and rallied from the open to end the session in the green. Buyers were supported by positive stimulus sentiment as both Pelosi and Mnuchin expressed hopes that they can come to terms in negotiations. The major indexes later paired gains as Senate Majority Leader Mitch McConnell warned that the sides are still far apart in their talks. It seems that both sides are playing games and talking up stimulus for the markets benefit and ahead of elections but neither side is willing to budge. This would mean that the market may be factoring in something that may not happen or be a lot more watered down than expected. Economic data out was positive for pending home sales and employment and helped to support sentiment on the open. The DOW closed up 1.20% while the broader SP500 ended up 0.83% and the Nasdaq closed up 0.74% for the session. In Europe, major Indexes ended the session on the back foot as prices headed lower. Buyers kept from adding risk to markets after the messy debate and a weak Asian session as Trump cast doubt on whether he would accept the election outcome if he lost. Concern for a second wave of infections and further lockdowns hampered Europe’s recovery for the third quarter.
The USD Index moved lower from the US session open on the back of positive sentiment for stimulus talks to round out a choppy quarter. Sellers were quick to jump on the stimulus news and pressure the dollar lower. As we expect that a decision on the much needed stimulus may not be what the market expects; or even eventuate prior to elections; we see volatility continuing and the potential for a sharp correction higher. The EURUSD turned from bearish to bullish suddenly as the dollar fell. Price looks set to kick higher although sellers are soaking up buying pressure around the 1.1760 offer zone. If the dollar swings higher then expect to see Euro fall off this level. The GBPUSD initially came under pressure but was later supported by the dollar selloff. Price spiked up through previous highs around 1.2927 but closed below. We expect to see some heat come out of the move today and see the potential for a pop into the USD after Mitch McConnell poured cold water on stimulus hopes. The AUDUSD benefited from the risk on mood and expectations that further weakness into the USD will stoke strong buying into commodities which will be a positive for local miners. The USDJPY saw the pressure mount as the dollar fell and sent the pair lower. Price is looking heavy and may be set for a bigger move lower. This will of course coincide with a further dollar fall although we see that any delays in stimulus may see dollar bulls get active again and send the USDJPY back to, and potentially through, resistance around 105.800.
SPOT GOLD struggled around the 1900 level as sellers jumped into the action. The continued rally into the US stock market has left any safe haven buyers on the sidelines leaving movements purely linked to the USD. A move below 1880 will trigger further sellers into action to squeeze out late buyers but for now bulls are being supported by the dollar grind lower. Crude Oil inventories were weaker than expected to stoke supply concerns and support price for a move higher. Added to the bullish support was the weakness into the USD from the US session open. We expect see a squeeze lower from current levels as the overall price struggles to gain traction for a strong move up. Copper bulls were quick to jump on the USD fall and send Copper prices higher. The metal continues to be resilient around the 3.000 level and flush out any sellers on dollar weakness.
Cryptocurrencies were relatively flat for the session lacking any commitment either way from bulls or bears. Bitcoin is currently trading at $10733.4 down 0.35% while Ethereum is at $357.80 up 0.02% and Ripple is at $0.23984 down 0.72%.
The ASX200 was beaten lower yesterday as global markets did not react well to the messy US presidential debate. The Index started the session on the back foot and sellers continued to pile on the pressure into the close. The index ended the day down 136.2 points or 2.29% to 5815.9. It was a sea of red across the sectors with Energy (down 4.20%) and Utilities (down 3.38%) leading the market lower. Buyers will need to get active and provide support in order to fend off some serious downside.
The ASX200 is expected to open up 10 points as the SPI200 was not convinced of the US rally and moved lower into the close.
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ECONOMIC DATA OUT TODAY (AEST)
CNY Bank Holiday All Day
AUD Commodity Prices 4:30pm
EUR German Final Manufacturing PMI 5:55pm
EUR Final Manufacturing PMI 6pm
GBP Final Manufacturing PMI 6:30pm
EUR PPI Data and Unemployment Rate 7pm
USD Unemployment Claims and Personal Spending 10:30pm
USD ISM Manufacturing PMI 12am
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SPI200 INTRADAY LEVELS TO WATCH
