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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 1/12/20
- SPI200 (Sept) overnight futures down 11 pts to 6518
- SP500 down 16.69 pts to 3621.66
- NASDAQ down 7.11 pts to 12,198.74
- Dow Jones down 271.73 pts to 29,638.64
- FTSE100 down 101.39 pts to 6266.19
- DAX30 down 44.52 pts to 13,291.16
- GOLD futures US session (Dec) down $7.90 to $1774.00 an ounce
- COPPER futures (Comex Dec) up $0.0290 to $3.4465 a pound
- OIL futures US Session (Nymex Jan) down $0.35 to $45.18 a barrel
- CRB Index down 0.92 pts to 160.06
- AUDUSD trading at 0.7345
- EURUSD trading at 1.1930
- GBPUSD trading at 1.3328
- USDJPY trading at 104.4000
- USD Index US Session (ICE Dec) up 0.197 to 91.998
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US indexes take a hit on the open after pending home sales data came in less than expected. This is the second month in a row that data has disappointed and shows that demand is slowing even with record low interest rates. Other data showed that factory activity slowed likely due to a surge in coronavirus cases which cut new orders and disrupted production. The data supports expectations for a slowdown in economic growth at a time when stimulus for many will come to an end unless congress can take significant action fast. Also adding to the selling was end of month portfolio rebalancing as many traders took the opportunity to cash in on gains and pump up their results. The rotation into energy, industrials and financials has paused as covid cases continue to rise although if Moderna have their way, a vaccine may be available sooner rather than later as they push for authorisation from US and European regulators. The DOW closed down 0.91% while the broader SP500 ended down 0.46% and the Nasdaq closed down 0.06% for the session. In Europe, major Indexes gave up some recent gains but Europe’s benchmark index still managed to post its biggest monthly gain on record thanks to vaccine news and the prospect of easing restrictions. All eyes are now on Brexit as the end date gets closer and negotiations over the weekend were not going to plan with many issues continuing to stall talks.
The USD Index opened for Asian trade and continued the move lower before US housing data saw a big short squeeze to move prices higher. The move lower was enough the washout the lows from early September and ended back above the level in a strong showing. The dollar found a safe haven bid as shares were weaker and risk sentiment soured. Traders continue to weigh up another stimulus package with vaccine hopes so if Congress can not get sorted, expect to see a further short squeeze. The EURUSD hit the 1.1995 highs and flushed the level before rolling over hard to put the squeeze on recent buyers. Watching now to see if a lower high builds which would suggest a further move lower into the Euro. The GBPUSD remained choppy with focus on Brexit. Price was happy to hold above the 1.3310 area and found buyers off the zone before the rally into the USD capped the gains around 1.3380. Longer term, if Brexit talks can not progress soon, the Pound will take a hit below 1.3300. The AUDUSD saw some heat come out of the recent rally as US share markets came under pressure. Price fell just short of previous highs around 0.7413 before moving back into support around 0.7335 where we will be watching to see how buyers react. The USDJPY took out recent sellers on a rally as the dollar lifted. Price was already on the march up prior to the dollar move which shows sentiment for a bigger move higher. Watching for a higher low to build and support an extension to test the 104.700 area.
SPOT GOLD continued to be pressured under the 1800 level as buyers remain on the sidelines for now. The rally into the Dollar may have also pressured buyers and if we see price hold below 1784 for too much longer, there may be another move lower on the cards. If US indexes come under pressure at current levels though, expect to see a safe haven bid into gold which may provide some support. Crude Oil came under early pressure and had a choppy session as OPEC and major oil producers discussed extending deep output cuts. OPEC members reached a broad consensus for the need to extend existing production cuts for three months from Jan if Oil allies (known as OPEC+) support the move. Expect support to hold around 44.60 as vaccine hopes remain the focus for increasing demand into 2021. Copper fell from highs made during the Asian session as the USD rallied to pressure the commodity. Still, price only moved down to the close of Saturday. The trend up is still well and truly in tact but may just need to put some late buyers back on the sidelines with a pullback.
Cryptocurrencies continued the move up that started in the Asian session as Bitcoin ramps up above the 19000 area. Bitcoin is now trading at $19410.1 up 6.23% while Ethereum is also on a charge and is trading at $606.43 up 8.22% and Ripple is at $0.64997 up 7.51%.
The ASX200 opened higher yesterday but was hit hard not long after to be sold down all session into the close. At the end of the day the Index was down 83.3 points to 6517.8 over 120 points down from the highs made at 10:15am. The Utility sector was the biggest drag on the index followed closely by Consumer Discretionary and Financials. Falling stocks outnumbered advancing ones by 778 to 528 and 353 ended unchanged.
The ASX200 is expected to open down 5/10 points after the SPI200 gave up an early rally into the US close.
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ECONOMIC DATA OUT TODAY (AEDT)
JPY Unemployment Rate 10:30am
AUD Building Approvals and Current Account 11:30am
CNY Caixin Manufacturing PMI 12:45pm
AUD Cash Statement and RBA Rate Statement 2:30pm
EUR German Unemployment Change 7:55pm
GBP Final Manufacturing PMI 8:30pm
CAD GDP 12:30pm
USD Fed Chair Powell Testifies and ISM Manufacturing PMI 2am
EUR ECB President Lagarde Speaks 4am
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SPI200 INTRADAY LEVELS TO WATCH
