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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 25/11/20 (as at 8am AEDT)
- SPI200 (Sept) overnight futures up 37 pts to 6684
- SP500 up 59.59 pts to 3634.18
- NASDAQ up 156.15 pts to 12,036.79
- Dow Jones up 454.97 pts to 30,046.24
- FTSE100 up 98.33 pts to 6432.17
- DAX30 up 165.47 pts to 13,292.44
- GOLD futures US session (Dec) down $32.80 to $1805.00 an ounce
- COPPER futures (Comex Dec) up $0.0430 to $3.3010 a pound
- OIL futures US Session (Nymex Jan) up $1.81 to $44.87 a barrel
- CRB Index up 2.47 pts to 159.79
- AUDUSD trading at 0.7359
- EURUSD trading at 1.1890
- GBPUSD trading at 1.3360
- USDJPY trading at 104.4200
- USD Index US Session (ICE Dec) down 0.344 to 92.150
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US indexes charged higher as the DOW Jones trades above the 30,000 level for the first time ever. Traders bullish sentiment was supported by vaccine progress and finally some closure on the US presidency on the formal go-ahead for President-elect Joe Biden’s transition to the White House. Traders are now looking ahead to an economic recovery in 2021 and are happy to be risk on into all things stock market as even short term virus issues are taken as a positive thanks to stimulus expectations. Risk assets are being pushed aside for stock market yield which is expected to continue as long as traders brush off rising US Debt and worsening Budget deficits. The DOW closed up 1.54% while the broader SP500 ended up 1.58% and the Nasdaq closed up 1.31% for the session. In Europe, major Indexes bounced back to end the session higher as traders focus on easing of lockdowns in France and the release of a virus vaccine. Oil has been on a tear and it is generally seen as an economic indicator so investors are becoming more confident for a lift in economic activity.
Janet Yellen is to be nominated as Treasury Secretary and is expected to push for more government aid to support businesses and the disadvantaged in the near term. She has also highlighted her concerns for the rising debt levels and growing deficits so expectations are for her to tackle the issues with conventional market friendly policies which would be a benefit in the long term.
The USD Index had a choppy session as price retested into support around 92.150. It continues to be a battle between bulls and bears and neither side is willing to concede yet as both have good reason to be positive. Expect that another major leg down will be averted as vaccine hopes point to a lift in economic activity and therefore inflation. On the flip side, short term issues with virus cases persist and point to the need for another stimulus package. Many bears may still be factoring in an extensive aid package now that Biden is in the Whitehouse but do not expect Republicans to agree anytime soon. The EURUSD rallied straight back up to the 1.1893 resistance zone after breaking support in the previous session. FX markets remain choppy and focused on Dollar movements so traders will be watching to see if the dollar again finds support near lows and push the Euro lower to retest 1.1820. The GBPUSD held both a lower high under selling pressure and a higher low off the 1.3310 zone. The action is contracting but does look set to continue the trend up in the medium term. Again it will depend on the USD and whether it can find support. If so, expect the Pound to move back down to pressure buyers. The AUDUSD spiked higher through resistance at 0.7340 on the European open but then was just as quick to give up the gains on a spike lower ahead of the US open. Later bulls regained control as investors went risk on into the share market and pushed the DOW into new all time highs. Expect to see a grind higher, not without the chop, if the 0.7320 level holds. The USDJPY initially moved lower on dollar weakness before the positive US housing data came out to support price and lift the pair. The pair remains whippy and we expect the same price action going forward until the Dollar can make a decisive move either way.
SPOT GOLD bulls were again disappointed as price dropped another $30 and extended the move down through support. There still may be more to come as price seems to be trading in the opposite way to the fortunes in the share market. Buyers will be looking for support levels but may be disappointed if the dollar rallies back to recent highs. Crude Oil launched higher on the back of positive sentiment for global recovery. Price pushed straight up through the 43.60 daily resistance area and ended the session on its highs. We may see some short term profit taking before continuation higher. Copper also moved up through the Asian session and held the gains into the US close on the back of expectations for a continued lift in demand. Price may still see some profit taking as it is trading at a key resistance zone on a daily basis.
Cryptocurrencies were positive with Ripple on a tear higher as share markets moved up. Bitcoin is currently trading at $19095.3 up 3.74% while Ethereum continues the march higher and is at $606.96 up 1.78% and Ripple is at $0.70991 up 23.17%.
The ASX200 had a strong session yesterday as buyers were active from the opening bell right up until the close. At the end of the day the index ended up 82.5 points to 6644.1 with the Energy sector leading the way being followed by IT while the Gold sector took a beating and was down 6.97% for the session. Rising stocks outnumbered declining ones by 648 to 646 and 308 ended unchanged.
The ASX200 is expected to open up 40 points as the SPI200 was pushed higher on the back of another positive US session.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD Construction Work Done 11:30am
NZD RBNZ Gov Orr Speaks 1pm
EUR ECB Financial Stability Review 8pm
USD Prelim GDP, Unemployment Claims, Durable Goods Data, Goods Trade Balance and Prelim Wholesale Inventories 12:30am
USD Revised Consumer Sentiment, New Home Sales and Personal Income and Spending 2am
USD Crude Oil Inventories 2:30am
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SPI200 INTRADAY LEVELS TO WATCH
