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OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 22/10/20 (as at 8:00am AEDT)
- SPI200 (Sept) overnight futures down 69 pts to 6112
- SP500 down 7.56 pts to 3435.56
- NASDAQ down 31.80 pts to 11,484.70
- Dow Jones down 97.97 pts to 28,210.82
- FTSE100 down 112.72 pts to 5776.50
- DAX30 down 179.31 pts to 12,557.64
- GOLD futures US session (Dec) up $12.30 to $1927.70 an ounce
- COPPER futures (Comex Dec) up $0.0475 to $3.1955 a pound
- OIL futures US Session (Nymex Nov) down $1.70 to $40.00 a barrel
- CRB Index down 1.29 pts to 151.04
- AUDUSD trading at 0.7114
- EURUSD trading at 1.1859
- GBPUSD trading at 1.3141
- USDJPY trading at 104.5700
- USD Index US Session (ICE Dec) down 0.416 to 92.635
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US indexes were under pressure from the open but managed to hold key support levels and fend off a bigger move down. Stimulus remains elusive as the two sides will not get anything done prior to elections. The Feds Beige book highlighted that the economy continued to recover at a modest pace but did show a major variation from sector to sector and state to state. A lot of local economies mentioned consumer spending had leveled off or declined while manufacturing activity had increased at a moderate pace although the outlook remains uncertain. With the lack of further stimulus, expect this picture to slowly worsen especially when further restrictions come into play. Also of concern was the employment market as hiring continued at a varied pace but the trend of temporary layoffs becoming permanent persisted. This all points to the need for further stimulus to keep the recovery on track. The DOW closed down 0.35% while the broader SP500 ended down 0.22% and the Nasdaq closed down 0.28% for the session. In Europe, major Indexes moved lower as concerns that a surge in virus cases will lead to more restrictions and lockdowns. The negative tone well outweighed positive earnings which have generally been above expectations with positive guidance. The FTSE index was hurt by a surge in the Pound after some positive Brexit comments as Britain said that they will return to talks to try to work out the differences and bridge the gap between themselves and the EU on key issues.
The USD Index spent the Asian session and European session moving lower only finding some buyers late in US trade. The action pushed down through support around 92.750 so if price consolidates below the level them expect lower levels. The move down may have been exacerbated by buying into the Pound and Euro on Brexit news. The EURUSD ramped higher back up into the previous sell zone. The action is being held up at 1.1840 so as long as this level holds we expect to see a grind higher…as long as there is no significant bounce into the dollar. The GBPUSD rallied hard being supported by Britain heading back to the Brexit negotiating table. The action broke up through key highs at 1.3080 but it is extended so we may see a pullback. Still, the rally opens the door to a bigger move up if a higher low holds. The AUDUSD did find some more buyers to lift price up as the Aussie was supported purely by the USD fall. Price managed to break back up above the 0.7100 zone which will be a positive as long as the pullback finds support to hold a higher low. The USDJPY fell like a stone as the USD was hit and the YEN found some safe haven buying in the European session as indexes came under pressure. Price is extended but has the potential to move down further into previous major lows at 104.230.
SPOT GOLD had a good night thanks to the USD. Price action managed to push up and consolidate above the 1913 level to extend the rally into the 1932 area. If price action can hold above the 1920 zone then we expect to see a spike through 1932…again it will depend on the action into the USD. Crude Oil fell even as the USD moved lower which usually would have provided support to the commodity. Sellers took charge on expectations that demand will take a hit as Europe and the US see pending virus restrictions. Price looks set now to extend the move back down into the 39.50 zone where we would expect to see a reaction from buyers. Copper continued the march higher from the open of the Asian session as the dollar resumed its trend lower. Watching now for continuation up to the recent highs around 3.3050.
Cryptocurrencies had a good session on the back of the weakness into the USD. Bitcoin took off and is currently trading at $12697.9 up 6.09% while Ethereum is at $391.25 up 5.82% and Ripple is at $0.25132 up 3.41%.
The ASX200 yesterday had a relatively lackluster session as early minor gains were given back into the close and the index ended up only 7.2 points to 6191.8. Rising stocks outnumbered declining ones by 648 to 623 and 315 ended unchanged. Price held below the 6200 level as buyers seem content for now although the action overnight may keep buyers on the sidelines today.
The ASX200 is expected to open down 65 points as the SPI200 broke below support levels in a negative European session and held the losses through to the US close.
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ECONOMIC DATA OUT TODAY (AEST)
AUD RBA Deputy Gov Debelle Speaks 9:30am
AUD NAB Quarterly Business Confidence 11:30am
EUR German Consumer Climate 5pm
GBP BOE Gov Bailey Speaks 8:25pm
USD Unemployment Claims 11:30pm
USD Existing Home Sales 1am
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SPI200 INTRADAY LEVELS TO WATCH
