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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 14/10/20 (as at 7:45am AEDT)
- SPI200 (Sept) overnight futures down 55 pts to 6148
- SP500 down 22.29 pts to 3511.93
- NASDAQ down 12.36 pts to 11,863.90
- Dow Jones down 157.71 pts to 28,679.81
- FTSE100 down 31.67 pts to 5969.71
- DAX30 down 119.42 pts to 13,018.99
- GOLD futures US session (Dec) down $33.80 to $1895.10 an ounce
- COPPER futures (Comex Dec) down $0.0223 to $3.0417 a pound
- OIL futures US Session (Nymex Nov) up $0.75 to $40.18 a barrel
- CRB Index up 0.58 pts to 150.38
- AUDUSD trading at 0.7161
- EURUSD trading at 1.1746
- GBPUSD trading at 1.2937
- USDJPY trading at 105.4800
- USD Index US Session (ICE Dec) up 0.421 to 93.525
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US indexes took a breather as risk remained on the sidelines for the session and recent buyers were squeezed out of the action. Johnson and Johnson announced they were pausing clinical trials of a COVID-19 vaccine candidate due to an unexplained illness in a study participant. The news put pressure on major indexes at a time when sentiment for a stimulus package before elections is starting to wane. Nancy Pelosi rejected the $1.8 trillion coronavirus relief proposal from Trump and his team saying that it falls well short of what is needed…it may also have a lot to do with the terms attached to the offer by Trump. As the two sides continue to play politics, millions of people are struggling to make ends meet since the emergency unemployment assistance expired, so this will flow on into the labour market data and pressure the recovery. The DOW closed down 0.55% while the broader SP500 ended down 0.63% and the Nasdaq closed down 0.10% for the session. In Europe, major Indexes were under pressure from the open on the vaccine news. The news confirms that a vaccine will still be a long way off and further lockdowns as virus numbers rise will hurt employment numbers. Bank stocks tracked a slide in Bond Yields to move lower on the back of expectations for further stimulus from the ECB.
The USD Index found some safe haven buying on the vaccine news and as recent sellers were put under pressure. The news however, does highlight the need for further stimulus to support the labour market so we expect that the dollar will be held down and find more sellers to hold a lower high and make another push down to the 93.00 zone. If bank earnings out tonight provide some support to stocks, expect that the USD will edge lower. The EURUSD mirrored the move in the dollar but in the opposite direction. Price was hit lower around the open of the US session as the dollar found some safe haven buying. The Euro has extended down to a level we would expect to see a reaction from buyers. The GBPUSD was also hit in tandem with the rally into the USD. Price cleaned out all the recent buyers to push down to the 1.2920 area where we may see some buyers if the dollar moves back down tonight. The AUDUSD was hit lower early in the Asian session which continued into the US close. Price extended down to 0.7150 where buyers stepped in and we will be watching this zone for a potential higher low…but a rally remains dependent on the USD. The USDJPY moved up on the dollar rally. Price rejected the 105.600 zone as the dollar rally stalled. Expect more talk on stimulus tonight to cap the rally into the USD and pressure USDJPY lower.
SPOT GOLD was hit hard as recent buyers were squeezed out of the action. Price will need to hold current levels around 1888 if the bulls have any chance of making back the lost ground. Crude Oil rallied to make back some of the previous losses. Buyers were supported by robust China data out during the Asian session. Price is extended although a fall in the USD will bring in more buyers for a potential push up to the 40.60 area. Copper continued the move down from the previous few sessions as price was pressured on the dollar move. Buyers did put in a strong effort to stem the tide of selling above the 3.015 zone which suggests they will make another run up to highs with the focus being on hopes for better than expected China demand.
Cryptocurrencies edged lower as share markets stalled and risk remained on the sidelines for the session. Bitcoin is currently trading at $11397.5 down 1.32% while Ethereum is at $378.43 down 2.35% and Ripple is at $0.25403 down 0.73%.
The ASX200 moved up strong from the open yesterday to keep the pressure on to attack the 6200 key level before seeing some minor selling into the close. Price ended the day a touch below the level at 6195.7 up 63.7 points. The Telecom Services sector led the charge being followed closely by Utilities and then Financials. Rising stocks outnumbered declining ones by 651 to 601 and 367 ended unchanged.
The ASX200 is expected to open down 50 points as the SPI200 moved down from highs to squeeze out some recent buyers.
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ECONOMIC DATA OUT TODAY (AEST)
AUD Consumer Sentiment 10:30am
EUR Industrial Production 8pm
USD PPI Data 11:30pm
GBP MPC Member Haldane Speaks 12am
USD FOMC Member Clarida Speaks 12am
USD FOMC Member Quarles Speaks 1:30am
AUD RBA Gov Lowe Speaks 8:45am
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SPI200 INTRADAY LEVELS TO WATCH
