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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 6/01/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures down 7 pts to 6592
- SP500 up 26.21 pts to 3726.86
- NASDAQ up 120.51 pts to 12,818.96
- Dow Jones up 167.71 pts to 30,391.60
- FTSE100 up 40.37 pts to 6612.25
- DAX30 down 75.52 pts to 13,651.22
- GOLD futures US session (Feb) up $6.10 to $1952.70 an ounce
- COPPER futures US session (Comex Mar) up $0.0985 to $3.6530 a pound
- OIL futures US Session (Nymex Feb) up $2.25 to $49.86 a barrel
- CRB Index up 4.36 pts to 171.70
- AUDUSD trading at 0.7763
- EURUSD trading at 1.2296
- GBPUSD trading at 1.3623
- USDJPY trading at 102.7300
- USD Index US Session (ICE Mar) down 0.392 to 89.453
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US indexes were in a bullish mood as buyers made back some of the previous losses from the first day of trading in the new year. Traders are still awaiting the outcome of the Georgia runoff elections which will determine the balance of power in the senate and hence stimulus. A democrat win may lead to greater financial aid but may also see tax reforms. The results are expected soon so we may see a lift in volatility in the futures markets for the Asian session. The DOW closed up 0.55% while the broader SP500 ended up 0.71% and the Nasdaq closed up 0.95% for the session. In Europe, major Indexes were mixed with the German DAX lower while the FTSE rallied. Seems that the DAX is struggling up at all time highs as buyers are happy to lock in some gains while the FTSE was supported by a rally into Oil producers and as UKs finance minister announced plans to support businesses struggling under a third lockdown.
The USD Index took another hit and tested previous lows around 89.400 as the pressure continues on the back of China’s decision to lift its official yuan exchange rate by its highest margin since it abandoned a dollar peg in 2005. Traders will be awaiting news of the Georgia runoff elections although the action looks set to extend the move lower into major lows below 89.000….but either way we expect to see some more volatility near lows. The EURUSD continues to hold minor higher levels and again pushed up into the 1.2310 area before finding some sellers. Price action was supported by the dollar weakness but buyers were not ready to break up through resistance. Inside support is now at 1.2254 which may is the key level for the day to hold the bullish action. The GBPUSD fought its way back up after the previous sessions late selloff but not with as much vigour as the Euro. Lockdowns and covid cases continue to surge but traders were happy to look past that and buyers provided some support to the currency pair thanks to the rally into oil. The AUDUSD benefited from the risk on sentiment into shares and dollar fall. Price moved up through recent highs around 0.7741 with some conviction so we expect to see further upside in the near term and a push to 0.8100 longer term. The USDJPY headed south as the 103.200 zone held during the Asian session. Watching now for an extension in the bearish action to test towards the 101.170 lows although this will depend on the Georgia election outcome.
SPOT GOLD did lift as bulls continued to push although had a relatively contained session as bullish momentum slows. Price was supported by the USD weakness although buyers were scarce which suggests that we may see a pullback to clear out some weak longs before another leg higher. Crude Oil rallied on the back of the weaker USD and as Saudi Arabia said that they would make additional voluntary output cuts of one million barrels per day while other OPEC producers will hold steady. The meetings highlighted the concern for a rebound in demand as lockdowns continue to cap price. Copper was supported by the fall in the USD as buyers piled into the commodity to push price up and out of its recent range. Watching now to see how buyers react on a pullback and whether they are happy to continue to provide support for a run to the 3.750 zone.
Cryptocurrencies were generally higher as Bitcoin pushed back up to retest the previous highs around 36400. Price is looking extended although momentum is still up so it will be interesting to see if some more bulls decide to lock in some gains at current levels. Bitcoin is currently trading at $33822.4 up 8.26% while Ethereum is at $1092.548 up 7.84% and Ripple is at $0.22350 down 3.02%.
The ASX200 started the session yesterday under pressure as traders were concerned with the overnight action in the US. The day belonged to the bulls though as price slowly made its way back to breakeven by the close to end down only 2.3 points to 6681.9. The Energy sector was the biggest drag on the action while Gold and Metals and Mining both did well up 3.09% and 2.43% respectively. Rising stocks outnumbered declining ones by 676 to 650 and 351 ended unchanged.
The ASX200 is expected to open down 5 points as the SPI200 was range bound overnight. Commodities did well so we expect to see buyers flow into the action on the Index over the day.
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ECONOMIC DATA OUT TODAY (AEDT)
CNY Caixin Services PMI 12:45pm
JPY Consumer Confidence 4pm
EUR German Prelim CPI 4pm
EUR Final Services PMI 8pm
EUR PPI 9pm
USD Non-farm Employment Change 12:15am
GBP BOE Gov Bailey Speaks 1am
USD Factory Orders 2am
USD Crude Oil Inventories 2:30am
USD FOMC Meeting Minutes 6am
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SPI200 INTRADAY LEVELS TO WATCH
