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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 22/01/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures down 18 pts to 6754
- SP500 up 1.22 pts to 3853.07
- NASDAQ up 73.67 pts to 13,530.91
- Dow Jones down 12.37 pts to 31,176.01
- FTSE100 down 24.97 pts to 6715.42
- DAX30 down 14.70 pts to 13,906.67
- GOLD futures US session (Feb) up $3.30 to $1869.80 an ounce
- COPPER futures US session (Comex Mar) up $0.0077 to $3.6492 a pound
- OIL futures US Session (Nymex Feb) down $0.29 to $53.02 a barrel
- CRB Index up 0.02 pts to 175.16
- AUDUSD trading at 0.7761
- EURUSD trading at 1.2166
- GBPUSD trading at 1.3730
- USDJPY trading at 103.5200
- USD Index US Session (ICE Mar) down 0.376 to 90.093
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US indexes put in another slightly positive session although the action was well contained after Bidens inauguration. Data out showed the labour market continues to struggle as unemployment claims remain stubbornly high. Traders equated that with more stimulus from the new administration and were happy to keep chugging on higher. Because inflation remains a non issue in the short term, Biden will be happy to add further stimulus to support a covid ravaged economy and get his term off to a positive start. Stay at home shares on the Nasdaq continued to benefit as the megacaps lifted the index into new all time highs again and supported the broader SP500. Biden in his first days in office has ramped up testing and vaccine rollouts to help stem the tide of infections and curb the affects of the pandemic on growth. The DOW closed down 0.04% while the broader SP500 ended up 0.03% and the Nasdaq closed up 0.55% for the session. In Europe, major Indexes could not hold onto early gains and drifted lower into the close. It was a tentative session ahead of the ECB rate statement where they stuck to their monetary policy but warned increased risks to the recovery due to the surge in coronavirus cases.
The USD Index continued to see short positions win out as price moved lower off resistance. Price is set to move back below the 90.000 level as stimulus weighs on the short term outlook with the lack of any buying from inflationary concerns. Expect to see the dollar grind its way lower into major support where where it will be interesting to see if bulls come in for support again. The EURUSD saw some choppy action over the ECB rate statement but otherwise was happy to tick higher on the dollar weakness. Expect that bulls will take full advantage and squeeze out a lot of sellers with a move up through 1.2173 to 1.2220 and higher. The minor anchor to the move up is at 1.2136 which we see holding today through the Asian session as the dollar pressures lower. The GBPUSD had a good day as buyers ramped price up through the 1.3720 area and consolidated the rally into the close of the US. The Action points to more strength to come as buyers squeeze sellers and may target a move through 1.4000 towards major previous highs around 1.4330 over the longer term. The AUDUSD looks very good on the daily as price has retested and held the key 0.7665 area. The recent move up off the level may need some heat to come out of the action in the near term and hold a higher level to support a break up. The ingredients are there with a weak USD and risk on into equities so we will see how this plays out. The USDJPY held below the 103.600 level as the USD crept lower. Buyers did hold a minor support area at 103.320 which will be the level to break and drag in more sellers for an expansionary move lower….but will depend on the strength down in the USD.
SPOT GOLD bulls will be very happy to wake up today and see that price has retested the 1860 level and held suggesting higher prices to come in the near term. We expect that price still has some work to do to convince more buyers to jump into the action but the case for a run up is building. If buyers can support a minor pullback and hold a higher level around 1865, then we should see a move up through 1875 soon. Crude Oil remains concerned with the increased number of covid cases in the US and Europe and what that means to demand. Support remains due to stimulus, a weak dollar and vaccines for the longer term although bulls are struggling up at highs around 53.80. European and US energy sectors are seeing oil indecisiveness as they fall and weigh on the overall market. Oil bulls will need to hold 52.80 to fend off a short term flush lower. Copper continues to see choppy action and some concern from buyers although holds key daily support levels. Price spiked lower at the start of the US session but buyers soon stepped back in as the USD headed lower. Price is holding below the MAs which suggests that sellers may have not finished yet and may be looking for a bigger squeeze lower in the short term.
Cryptocurrencies moved lower as the pressure was too much for some holders who decided it was time to lock in some gains. Bitcoin is currently trading at $31746.9 down 9.94% while Ethereum is at $1196.91 down 10.56% and Ripple is at $0.27618 down 6.52%. Prices remain under pressure and may take another hit in the Asian session as local crypto enthusiasts book some gains.
The ASX200 extended the gains from the previous few sessions yesterday with another solid day as the index ended up 53.3 points to 6823.7. It was the best performing sector for day following the overnight move in the Nasdaq. Metals and Mining was close behind while Energy ended in the red even after crude oil pushed back into highs. Rising stocks outnumbered declining ones by 804 to 578 and 328 ended unchanged.
The ASX200 is expected to open down 15/20 points as the SPI200 faded off the days session close as markets took a breather overnight.
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ECONOMIC DATA OUT TODAY (AEDT)
NZD CPI 8:45am
AUD Flash Manufacturing and PMI 9am
AUD Retail Sales 11:30am
GBP Retail Sales 6pm
EUR French Flash Manufacturing and Services PMI 7:15pm
EUR German Flash Manufacturing and Services PMI 7:30am
EUR Flash Manufacturing and Services PMI 8pm
GBP Flash Manufacturing and Services PMI 8:30pm
USD Flash Manufacturing and Services PMI 1:45am
USD Crude Oil Inventories 3am
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SPI200 INTRADAY LEVELS TO WATCH
