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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 3/11/20 (as at 8am AEDT)
- SPI200 (Sept) overnight futures up 5 pts to 5940
- SP500 up 40.18 pts to 3310.14
- NASDAQ up 46.02 pts to 10,957.61
- Dow Jones up 423.45 pts to 26,925.05
- FTSE100 up 77.70 pts to 5654.97
- DAX30 up 231.80 pts to 11,788.28
- GOLD futures US session (Dec) up $15.70 to $1895.60 an ounce
- COPPER futures (Comex Dec) up $0.0373 to $3.0848 a pound
- OIL futures US Session (Nymex Dec) up $1.23 to $37.02 a barrel
- CRB Index up 1.18 pts to 145.91
- AUDUSD trading at 0.7055
- EURUSD trading at 1.1640
- GBPUSD trading at 1.2919
- USDJPY trading at 104.7600
- USD Index US Session (ICE Dec) up 0.031 to 94.073
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US indexes opened strong and held the gains into the close as traders position themselves ahead of elections later tomorrow. The Nasdaq faded for most of the session, although ended with gains, and pressured the SP500 while the DOW performed well and made back a lot of the losses from the last few sessions. Whatever the outcome for the elections, the focus will remain on getting the stimulus measures in place as the economy suffers from the pandemic and rising new cases. The risk that markets can not factor in is being left with no immediate winner as this will leave stimulus unknown and could see a wave of fear based selling. A Biden win is expected to deliver a massive fiscal stimulus and long-term policy shifts related to taxes, government spending, trade and regulation. A Trump win is expected to be more of the same, ie/ good for Banks and Wall Street, although his stance on stimulus has been mixed in the run up to elections. The DOW closed up 1.60% while the broader SP500 ended up 1.23% and the Nasdaq closed up 0.42% for the session. In Europe, major Indexes started the new month with a rally to lift prices off the lows from last weeks selloff. A rebound in factory activity globally outweighed concerns of rising covid cases and lockdowns as traders equate rising cases with rising stimulus measures. The export heavy DAX benefited from the data and also on the expectations for a Biden win which is expected to be good for the EU on reduced trade uncertainty.
The USD Index again edged higher to hold above the 94.00 level. The dollar is not really factoring in a big package for stimulus and seems to be playing if safe for now after some shorts have been squeezed out of the action on the recent rally. The dollar volatility will lift as it becomes clearer on the stimulus outlook and as traders reposition themselves. The EURUSD did find further weakness on the open yesterday and held the lows around daily support levels at 1.1610. Neither buyers or sellers were ready to load the boat as the dollar action was well contained. The GBPUSD spiked lower into major support at the start of the European session on England lockdown concerns. Price was quick to rebound as the USD found strength. Focus is well and truly on elections and the USD. If the 1.2850 zone comes under fire, we may see a run lower as buyers are forced out of the action. The AUDUSD held up well being supported by the stock markets positive sentiment. Traders will be focused on the RBA statement at 2:30pm AEDT and may be adjusting their risk ahead of time. The Aussie is holding support at 0.7010 and lower highs at 0.7068. The USDJPY continued to move up holding higher levels as the USD held above the 94.00 level. Major highs around the 104.950/105.000 zone are expected to contain the action ahead of the elections until the picture for the USD becomes clearer.
SPOT GOLD was a straight grind higher all day after an early spike lower to 1873 was rejected. Buyers seem to be focusing on a potentially weaker USD as rising virus cases point to the need for stimulus whoever the eventual victor may be for elections. Still the short term trend remains down being held at 1909. Crude Oil bounced back strong from early weakness and push back above the 36.50 level in a decisive move for bulls. Prices were lifted by factory data and also by a big squeeze of short sellers as traders square up ahead of election chop. Copper also benefited from the positive sentiment as price held up off the 3.0400 level to rally into the US close. Most of the gains were made on the US open as share Indexes opened stronger than expected and put the squeeze on recent sellers. We expect that the action will be contained into the election result and may be choppy as the USD finds a direction.
Cryptocurrencies again eased lower as the USD rallied and put pressure on the pairs. Bitcoin is currently trading around $13574.5 down 1.57% while Ethereum is at $386.59 down 0.60% and Ripple is trading around $0.23564 down 1.59%.
The ASX200 bounced back from opening weakness yesterday, then went into consolidation mode around midday as traders have a lot to consider with RBA rates and US elections ahead. The Utilities and Gold sectors had a strong outing while Energy lagged. Falling stocks outnumbered advancing ones by 926 to 393 and 271 ended unchanged.
The ASX200 is expected to open up 10 points as the SPI200 found support from a rally in the European and US markets to start the new month.
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ECONOMIC DATA OUT TODAY (AEST)
JPY Bank Holiday
AUD RBA Cash Rate and Rate Statement 2:30pm
USD Factory Orders 2am
USD Presidential Elections
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SPI200 INTRADAY LEVELS TO WATCH
