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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 2/10/20 (as at 7:15am AEST)
- SPI200 (Sept) overnight futures down 27 pts to 5841
- SP500 up 17.80 pts to 3380.80
- NASDAQ up 159.00 pts to 11,326.51
- Dow Jones up 35.20 pts to 27,816.90
- FTSE100 up 13.35 pts to 5879.45
- DAX30 down 29.96 pts to 12,730.77
- GOLD futures US session (Oct) up $16.00 to $1903.50 an ounce
- COPPER futures (Comex Dec) down $0.1550 to $2.8775 a pound
- OIL futures US Session (Nymex Nov) down $1.64 to $38.58 a barrel
- CRB Index down 2.45 pts to 146.06
- AUDUSD trading at 0.7187
- EURUSD trading at 1.1747
- GBPUSD trading at 1.2889
- USDJPY trading at 105.5200
- USD Index US Session (ICE Dec) down 0.145 to 93.782
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US indexes were buoyed by the ‘safe trade’ of big tech again as the DOW opened strong but faded into the close while the Nasdaq edged higher all session. Markets were weighed down by stimulus concerns as, not surprisingly, Pelosi and Mnuchin remained far from agreement on COVID-19 relief in key areas. Data out on jobless claims continue to suggest that the limping economic recovery is losing steam. Traders will be eagerly awaiting the employment data out tonight for further detail on the labour market and whether cracks are starting to appear. The main story though is stimulus and the headlines are mixed. We still expect nothing to happen until elections as Trump and his team remain reluctant to come to an agreement but know that taking it off the table will see a hit to the share markets which is not what he wants into elections….so expect to see more mixed messages. SP500 earnings start in a few weeks and expectations are for a hit of 21% year-on-year. The DOW closed up 0.13% while the broader SP500 ended up 0.53% and the Nasdaq closed up 1.42% for the session. In Europe, major Indexes ended mixed as they gave up earlier gains to move lower all session. Prices were weighed down by oil stocks and the energy sector as Crude Oil was hit hard from the European open.
The USD Index moved lower but did find some buying interest on a spike down towards the 93.55 zone. Expect that the weakness may be short lived if the Democrats and Republicans can not come to an agreement on Stimulus. If stock traders start to see the likelihood of no stimulus prior to elections we expect to see risk off into shares and safe haven buying into the USD at current lows. The EURUSD found support on the dollar weakness but the bulls were not so convincing as they could not hold price above previous highs around 1.1755. With numbers of virus cases increasing in Europe, we expect to see some movement out of the Euro for the safety of the Dollar. The GBPUSD saw a choppy session initially falling over 100 pips to then recover all the losses plus more before again getting hit. Price was bullied around by Brexit headlines although some traders believe that a negative outcome for Brexit is largely factored in to price meaning downside may be limited. We see price more linked to the fortunes of the USD and stimulus news in the near term. The AUDUSD rallied through the ASX day session but largely went sideways during overnight trade. Price was whippy as US markets failed to kick on strong from the open and were weighed down by stimulus negativity. The USDJPY did not find the weakness that we expected to see for the break below 105.400 but price is still stuck in a range and looking heavy. If the dollar sees a sudden spike higher, we expect to see some safe haven buying into the YEN and for the pair to come under pressure so the move lower remains on the cards.
SPOT GOLD moved higher as buyers pushed price up through the 1895 zone triggering some bullish action as the USD remained under pressure. We expect to see some heat come out of the move as the USD starts to find a bid down near support on stimulus concerns. Crude Oil was hit hard as previous supply concerns and dollar weakness were brushed aside by sellers and buyers were nowhere to be seen. Price moved lower right from the European open to trade straight through previous lows so we see more weakness in the near term as the global economic recovery comes into question. Copper was also hit hard as sellers piled into the action on a worsening demand outlook as coronavirus cases rise. Bulls remained on the sidelines providing no support at all as the sentiment into the metal seems to have taken a hit. Price is extended lower so we may see some bargain hunting in the short term but do expect pressure from a rally into the USD.
Cryptocurrencies were weaker across the board as shares lost ground into the close. Bitcoin is currently trading at $10616.7 down 0.88% while Ethereum is at $352.26 down 1.27% and Ripple is at $0.23766 down 0.76%.
The ASX200 yesterday bounced back from the previous sessions selloff with buyers ramping prices hard early but the enthusiasm eventually faded into the close. The index still managed to end the day up 57 points to 5872.9 with the Materials Sector, Metals and Mining and Resources leading the charge. We may see a more reserved session today as traders await US employment data out at the start of the US session tonight.
The ASX200 is expected to open down 25/30 points as the SPI200 drifted lower through the European and US Sessions.
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ECONOMIC DATA OUT TODAY (AEST)
CNY Bank Holiday
AUD Retail Sales 11:30am
EUR Spanish Employment Change 5pm
EUR CPI Flash Estimate 7pm
USD Non-Farm Employment Change and Unemployment Rate 10:30pm
USD Consumer Sentiment and Factory Orders 12am
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SPI200 INTRADAY LEVELS TO WATCH
