–
OVERNIGHT MARKET SNAPSHOT FOR MONDAY 5/01/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures down 30 pts to 6583
- SP500 down 55.42 pts to 3700.65
- NASDAQ down 189.83 pts to 12,698.45
- Dow Jones down 382.59 pts to 30,223.89
- FTSE100 up 111.36 pts to 6571.88
- DAX30 up 7.96 pts to 13,726.74
- GOLD futures US session (Feb) up $51.60 to $1946.70 an ounce
- COPPER futures US session (Comex Mar) up $0.0462 to $3.5652 a pound
- OIL futures US Session (Nymex Feb) down $1.16 to $47.36 a barrel
- CRB Index down 0.45 pts to 1673.65
- AUDUSD trading at 0.7666
- EURUSD trading at 1.2251
- GBPUSD trading at 1.3564
- USDJPY trading at 103.1500
- USD Index US Session (ICE Mar) down 0.024 to 89.870
–
It was a nervous first day of trading for the new year on US indexes which started on the back foot as traders went risk off in a thin market. Traders are focused now on many things that may change the landscape for yield. Covid cases are surging in the US which will dent economic activity and returns and could affect sectors that did well on the back of vaccine hopes into the end of 2020 eg/ Banks and Oil and Gas. Georgia’s runoff elections could have a big impact on the balance of power in the Senate to take away control from Republicans which may see legislative overhauls such as higher corporate taxes and tougher regulations….ie boosting Bidens agenda. It may or may not be a mute topic as it will finally bring some clarity to the political landscape and it will be only a slim Democrat margin at best. Still, shares remain the best place for yield and the move overnight may just prove to be another flush of late buyers to pave the way for another leg higher. The DOW closed down 1.25% while the broader SP500 ended down 1.48% and the Nasdaq closed down 1.47% for the session. In Europe, major Indexes started the session with a bang and rallied from the open. Sellers soon entered the action once the US opened for trading and saw a lot of the gains given back into the close. The DAX was quick to fall away from new all time highs as traders took some risk off the table. The FTSE was supported by the Brexit deal and also as Britain began vaccinating with the COVID-19 shot developed by Oxford University and AstraZeneca.
The USD Index initially opened weaker in the Asian session and went lower before finding a safe haven bid as US Indexes went lower. The action saw some short covering but the move down is a long way from over. If the index holds below the 90 area then expect another wave of selling lower on expectations for a bigger stimulus hit from Biden. The EURUSD pushed up into previous highs at 1.2310 on the back of early USD weakness before sellers jumped into the action and squeezed out some buyers for a move lower. Like the USD, the Euro is holding the trend and price may need to spend some time consolidating new highs before another leg up. A break down through 1.2200 will pressure the action and may see a bigger unwind of buyers. The GBPUSD took a hit late in the European session as recent buyers were happy to lock in some gains. Watching now to see if bulls are happy to step back into the action to hold a major higher low around current levels of 1.3560 or whether there will be more downside action. The AUDUSD failed early off the 0.7740 zone as buyers were quick to lock in some gains. Price moved straight back to the daily breakout level around 0.7645 so watching now to see if the move is a retest before heading higher. The USDJPY bounced on the dollar rally but the trend down in the near term remains in tact. If price continues up to take out the 103.350 zone, then we may see a decent squeeze on sellers and a spike higher. Bias remains down for now especially if we see some further consolidation around 103.155.
SPOT GOLD charged higher right from the open and never looked back as price rallied straight through a key zone for bulls to trigger a buying frenzy. Price is stretched and momentum is easing but bulls may still have further to go and could target previous highs around 1962. Crude Oil took a hit from the risk off tone on the US share market as US covid cases surge. Price is having some difficulty getting up through to the 50 area so we may see a wave of selling in the near term. Watching now for a potential lower high to start the squeeze on late buyers. Copper continues is range bound action as price swings between major support and resistance. Again the dollar drop triggered sellers and a spike lower so watching to see how buyers react around the support zone at 3.5110.
Cryptocurrencies saw some big volatility as Bitcoin had a big spike lower with buyers rushing to lock in some gains. The move cleared out a lot of late buyers and will be making some holders very nervous. Bitcoin is currently trading at $31005.5 down 8.29% while Ethereum is at $1005.14 up 5.48% and Ripple is at $0.22949 up 0.66%.
The ASX200 started the new year on a positive note as buyers recovered losses from Thursdays shortened session. The index ended the day up 97.1 points or 1.47% to 6684.2 with gains made across the board. The Gold sector led the charge, thanks to a rally in spot gold prices, while Metals and Mining and Resources were not far behind. Rising stocks outnumbered declining ones by 875 to 481 and 310 ended unchanged.
The ASX200 is expected to open down 30 points after the SPI200 gave up early gains in the overnight session.
–
ECONOMIC DATA OUT TODAY (AEDT)
AUD ANZ Job Adverts 11:30am
EUR German Retail Sales 6pm
EUR Spanish Unemployment Change 7pm
EUR German Unemployment Change 7:55pm
USD ISM Manufacturing PMI 2am
–
SPI200 INTRADAY LEVELS TO WATCH
