The Morning Jumpstart Macro View

OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 3/06/21 (as at 7:15am AEST)

  • SPI200 (Jun) overnight futures up 16 pts to 7229
  • SP500 up 6.08 pts to 4208.12
  • NASDAQ Composite up 19.85 points to 13756.33
  • Dow Jones up 25.07 pts to 34600.38
  • FTSE100 up 27.54 pts to 7108.00
  • DAX30 up 35.35 pts to 15602.71
  • GOLD futures US session (Aug) up $5.90 to $1910.90 an ounce
  • COPPER futures US session (Comex July) down $0.0502 to $4.6018 a pound
  • OIL futures US Session (Nymex July) up $1.11 to $68.83 a barrel
  • CRB Index up 0.84 pts to 209.28
  • AUDUSD trading at 0.7753
  • EURUSD trading at 1.2212
  • GBPUSD trading at 1.4172
  • USDJPY trading at 109.5500
  • USD Index US Session (ICE Jun) up 0.081 to 89.900

US indexes were happy to trade in a range overnight ending with minor gains as traders await key jobs data Friday. The broader market SP500 and the DOW both edged higher from the open before sellers capped the advance to push price back down to the opening lows as the Nasdaq weighed on the bulls. The Energy sector added to gains being the best performing sector this year, as oil pushed higher while a 3% fall in Tesla weighed on the Nasdaq. AMC may be the next GME with the Reddit crew potentially at it again with price rallying almost 100% as bulls ramped higher. It will be interesting to see how major Indexes react to a potentially strong jobs number Friday as it suggests that the Fed will be starting to hit employment targets and then will be forced to look at easing stimulus. Even if any easing is well in the future, markets are forward looking and have been geared up for a sell-off…the question is how much risk off can we expect in an underlying strong economic environment. The DOW closed up 0.07% while the broader SP500 ended up 0.14% and the Nasdaq closed up 0.14% for the session. In Europe, major Indexes were also range bound for the session but managed to consolidate the previous sessions gains as prices were supported by energy and consumer stocks. Indexes have started the new month on a solid footing after a bout of volatility in May on inflation concerns which have been tempered by reassurances from the US Fed and ECB that bond buying support will continue. Expecting that the message will continue to be hammered home from the central banks until they are ready to start the easing process in coming months.

The USD Index took a sharp turn higher at the start of the European session hitting 90.250 before fading back down below 90.000 where it held steady into the US close. With a lack of any clear catalyst, the move was put down to risk aversion and some sellers taking some risk off the table before Fridays jobs data release. The move further confirms the support zone around 89.650 and sees traders happy to be within a range between 90.300 and 89.650 until Friday. The previous payroll release saw selling being triggered by a weaker than expected number so there remains an unknown factor for traders. The EURUSD spiked lower on the USD move up before, like with the USD, settling back around the same level that it started the European session. Price seems happy to remain within a range between 1.2165 and 1.2235 until traders expect to see more directional bias into the USD. The GBPUSD continued to be range bound between 1.4230 and off 1.4100 after buyers rejected a push into 1.4100. We expect to see the 1.4160 area hold and buyers to make a push up to 1.4200 for a retest of resistance. Expect to see the usual flush lower and hold first into European trade before any rally. The AUDUSD was more choppy than other major pairs with resistance holding at 0.7767 before a spike lower and bounce thanks to the USD. Price did take out the lows at 0.7730 so may trigger some more pressure lower today if a lower high holds at 0.7756. The USDJPY initially rallied up off support before fading back down into the US close. Price looks set to hold a higher low around 109.500 so we will be watching for evidence that buyers are stepping into the action.

SPOT GOLD had a good night to brush aside earlier weakness below 1900 and rally into the US close. Bond prices edged higher which provided some support to Gold along with the move lower on the USD. Sellers may again cap any push up through 1910 but we will then be watching for a higher low to again hold. Aussie gold remains strong and has room to move on the upside today which will help local ASX gold stocks. Crude Oil again rallied to extend on recent gains after OPEC and its Oil allies stuck to their plan to slowly bring back supply to markets through June and July. Price is extended into previous highs so we do expect a grind lower today just to take some heat out of the action prior to the US open. Copper continued to push lower and tested the anchor at 4.5940 which managed to hold into the close. We will be watching this level today to hold as longer term demand should still be strong and drag in buyers around the level for a squeeze higher.

Cryptocurrencies generally pushed higher being led by Bitcoin while there seems to be less excitement from bulls this time after many had some issue with margins on the pullback. We expect that prices still have some work to do to recover the positive sentiment as Bitcoin is far from out of the woods yet on the daily timeframe and may see another bout of selling if buyers can not break back above $40000. Bitcoin is currently trading at $37622.3 up 3.31% while Ethereum is at $2701.79 up 4.16% and Ripple is at $1.02411 up 1.68%.

The ASX200 had a bumper session yesterday with bulls taking control right from the open to finally push the index up into new all time highs. The Index ended up 75.2 points to 7217.8 with the Energy sector leading the charge up 4.05% while Utilities, Resources and Metals and Mining stocks being the next favorites for the bulls. Aussie GDP figures came out better than expected which helped to lift the market a day after the RBA left rates on hold. The Nikkei edged its way higher while the Hang Seng moved lower to give up some of the previous sessions gains. Rising stocks outnumbered declining ones by 754 to 632 and 354 ended unchanged.

The ASX200 is expected to open up 20 points after the SPI200 managed to add to the days session gains.

ECONOMIC DATA OUT TODAY (AEDT)

AUD Retail Sales and Trade Balance 11:30am

CNY Caixin Services PMI 11:45am

EUR German Final Services PMI 5:55pm

EUR Final Services PMI 6pm

GBP Final Services PMI 6:30pm

USD ADP Non-Farm Employment Change 10:15pm

USD Unemployment Claims 10:30pm

USD ISM Services PMI 12am

USD Crude Oil Inventories 1am

GBP BOE Gov Bailey Speaks 2am

SPI200 INTRADAY LEVELS TO WATCH