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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 6/11/20 (as at 8am AEDT)
- SPI200 (Sept) overnight futures up 42 pts to 6166
- SP500 up 67.74 pts to 3511.18
- NASDAQ up 300.15 pts to 11,890.93
- Dow Jones up 542.52 pts to 28,390.18
- FTSE100 up 22.92 pts to 5906.18
- DAX30 up 243.87 pts to 12,568.09
- GOLD futures US session (Dec) up $55.70 to $1951.90 an ounce
- COPPER futures (Comex Dec) up $0.0083 to $3.1153 a pound
- OIL futures US Session (Nymex Dec) down $0.63 to $38.52 a barrel
- CRB Index up 0.25 pts to 149.16
- AUDUSD trading at 0.7287
- EURUSD trading at 1.1829
- GBPUSD trading at 1.3144
- USDJPY trading at 103.5300
- USD Index US Session (ICE Dec) down 0.833 to 92.578
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US indexes again marched higher as they continue to factor in a divided congress and a Biden victory. Traders now expect to see the Republicans retain control of the Senate which would mean they will block any major policy changes that would dampen corporate profits. On the flip side is a major stimulus package is now up in the air which we believe has been brushed aside for now. There has already been opposition from Republicans to more stimulus and we expect to see more from the losing team which would make it hard to see a package put through in the near term. Unemployment Claims data out overnight in the US show a consistent number of Americans filing for benefits so traders will be watching the payroll numbers out tonight very closely. Many expect the economy may plunge into a period of uncertainty which would hold back business investment as a relief package is delayed at a time when a second wave of layoffs may be hitting the economy. Many businesses will be hampered by rising virus cases and may be unable to open which may lead to more layoffs for employees….but then again the bulls are well and truly in control and continue to brush aside negative news. The DOW closed up 1.95% while the broader SP500 ended up 1.97% and the Nasdaq closed up 2.59% for the session. In Europe, major Indexes were again buoyed by positive sentiment thanks to strong earnings and fresh stimulus for Britain as they increased their already huge bond-buying stimulus program.
The Fed Reserve maintained its ultra easy monetary policy stance and pledged again to do whatever it can to sustain the recovery. The focus from traders will shift from government to the Fed to pump more money into the economy which the Fed has already indicated is the Governments domain.
The USD Index was hit hard back below 93.00 to test towards the lows around 92.500. It seems that there is more weakness for the USD being factored in as unemployment numbers hold stubbornly high. Sellers are indicating they believe there is too much at stake to ‘not’ see a major stimulus package….even if it does take a lot more time. Price looks to be reacting up off the level which we would expect to see hold into payroll data tonight. The EURUSD launched higher on the back of dollar weakness. Price is pushing back up into previous highs around 1.1875 but buyers may need to consolidate current levels prior to a final push to the level. If the 1.1790 level can hold, expect the spike up. The GBPUSD also spiked higher into previous minor highs at 1.3140. We expect to see some profit taking as buyers lock in some gains although this will depend on what the USD does today. The AUDUSD continues to hold higher levels as the share markets go risk on. Commodity prices also lifted on the USD weakness to support the commodity currency. Price pushed straight up and through the 0.7240 high from late October so we see an extension to 0.7340 and potentially beyond may be on the cards. The USDJPY was hit hard on the USD weakness to push straight through support around 104.200. The next low to come into the picture is way down around 101.200 but this would mean a complete unwind into the USD.
SPOT GOLD rocketed higher as the USD fell to finally break up through the 1910 zone with strength. Price is well and truly extended so we do expect to see some profit taking, especially if the USD bounces higher of current lows. The rally in gold will be pretty supportive of local gold stocks although Aussie gold does not look quite so good as spot gold. We will be watching the first pullback to see if gold looks like it wants to hold a higher low which will lead to continuation up. Crude Oil was heavier than expected and found selling pressure up at the 39.00 zone even against the flow of the USD. From here we would expect to see a squeeze on recent buyers and a move lower. Copper did push higher although did not show the strength from bulls as would have been expected from the sentiment into the share market. It seems that shares are still the place to be for yield.
Cryptocurrencies gained again on the back of the risk on sentiment in to global share markets. Bitcoin is on another tear higher and is currently trading at $15147.7 up 6.89%. Ethereum is also starting to charge higher and is at $413.95 up 2.48% while Ripple is at $0.24450 up 2.64%.
The ASX200 followed on from where it finished the previous session to rally into the close yesterday and end up 77.5 points to 6139.6. The Telecom Services sector led the charge with Consumer discretionary not far behind while Energy and Resources were the biggest drag on the market. Aussie trade balance data came out a lot better than expected to support the bullish sentiment. Rising stocks outnumbered declining ones by 743 to 464 and 343 ended unchanged.
The ASX200 is expected to open up 40 points as the SPI200 continued higher in the European and US sessions.
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ECONOMIC DATA OUT TODAY (AEST)
AUD RBA Monetary Policy Statement 11:30am
EUR German Industrial Production 6pm
CAD Employment Change and Unemployment Rate 12:30am
USD Non-Farm Employment Change and Unemployment Rate 12:30am
USD Final Wholesale Inventories 2am
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SPI200 INTRADAY LEVELS TO WATCH
