The Morning Jumpstart Macro View

OVERNIGHT MARKET SNAPSHOT FOR MONDAY 7/06/21

  • SPI200 (Jun) overnight futures up 7 pts to 7300
  • SP500 up 37.04 pts to 4229.89
  • NASDAQ Composite up 199.98 points to 13814.49
  • Dow Jones up 179.35 pts to 34756.39
  • FTSE100 up 4.69 pts to 7069.04
  • DAX30 up 60.23 pts to 15692.90
  • GOLD futures US session (Aug) up $20.80 to $1894.10 an ounce
  • COPPER futures US session (Comex July) up $0.0530 to $4.5160 a pound
  • OIL futures US Session (Nymex July) up $0.81 to $69.62 a barrel
  • CRB Index up 2.83 pts to 210.29
  • AUDUSD trading at 0.7740
  • EURUSD trading at 1.2167
  • GBPUSD trading at 1.4157
  • USDJPY trading at 109.5200
  • USD Index US Session (ICE Jun) down 0.374 to 90.127

US indexes bounce back after employment data disappoints and concern over inflation abates….again. Tech stocks outperformed with Nasdaq rallying hard from the open. The USD fell as the jobs number came out not as robust as would have been expected from Thursday nights data release. US employers increased hiring and raised wages in May but the payrolls increased 559K jobs which was less than the 650K economists had forecast. Bond yields fell as bonds rallied to take some wind out of the bears sails leaving major indexes hovering around all time highs. Traders will continue to assess the coming labour market data for signs that the Fed will ease tapering but for now, the numbers continue to lag and support the Feds view for continuing support. The DOW closed up 0.52% while the broader SP500 ended up 0.88% and the Nasdaq closed up 1.47% for the session. In Europe, major Indexes were higher with the German DAX index trading into new all time highs. Tech stocks were the best performers for the session as the Nasdaq started the US session strong and supported European tech companies. Traders will be looking to US Fed and European Central Bank policy meetings this week where they will watch for hints on tapering of the bond purchase programs but many expect that there will be no changes.

The USD Index fell on the employment data release to move straight back down to where it was trading prior to the previous sessions spike higher. The news would have disappointed bulls who were looking for a stronger number and again brings into focus supply of USD to weigh on price. If sellers continue to weigh on the dollar today, then expect to see a move back below the 90.00 level for a test towards 89.700 in coming sessions. If 90.000 holds then expect to see a grind higher in Asian trade to set up for a move down in the European or US session. The EURUSD spiked higher to move back above the 1.2170 area into the US close rejecting the 1.2100 area. The move was simply a squeeze on sellers on the back of the USD fall but is hovering in an area where we could see either bulls or bears look to take control. Price remains under pressure in the near term until we see a higher low hold above the 1.2100 level which would lead to a push back up to resistance around 1.2240. For now, we expect to see a grind lower today to potentially trap some sellers prior to a move up. The GBPUSD lifted off support around the 1.4100 area but not after a flush of the lows to trap some sellers. Price was supported by the USD move and remains in the range between 1.4100 and 1.4230 which it has been in the last few weeks. The key level we see today is around 1.4200 which may cap the bulls in Asian trade and see price pressured down. We will be watching for a higher low to build above 1.4120 which will then entice buyers into the action for a later move up. The AUDUSD chewed up and spat out the shorts from Thursdays move down as price ramped higher after the US payroll release. We would expect to see price retest lower into the 0.7700 zone and hold a higher low prior to another move up as price is extended for now. The USDJPY obviously dropped like a stone after the US data release to disappoint bulls who were stacked up expecting to see higher prices. If buyers can hold 109.370 today then we may see a test into the highs but we expect to see this level broken and a move down into 109.100.

SPOT GOLD also saw sellers caught by surprise and on the wrong side of the action over the employment release. Price continues to hold the longer term trend up but we expect to see more pressure down in the near term before bulls gain confidence for a move higher. We are now watching to see a higher low build above 1870 to drag in more buyers. All in all we see the spike into 1860 as a good clean out of weak buyers who will look for an opportunity to re-enter the action on a dip. Crude Oil was strong Friday as price held a higher low to drag in buyers for the move up through 69.50 as expected. We see the potential for the bullish action to continue today and into the US session as talk of inflation adds expectation for more demand for oil. Support for now is around 69.00. Copper held off the support zone around 4.4415 after a few tests of the level before the dollar fall triggered buyers into action. We expect to see another squeeze on recent sellers if 4.5015 holds and for price to test up to 4.5780.

Cryptocurrencies were pressured lower over the weekend thanks to a tweet from Elon Musk spooked the bulls. Bitcoin bulls will have to put up a fight today in order to protect support from breaking and seeing a sharp move below 34000. Bitcoin in currently trading at $35793.8 up 2.32% while Ethereum is at $2700.46 up 4.88% and Ripple is at $0.93815 up 3.92%.

The ASX200 backed up with another positive session on Friday to end the week on a high. The index ended up 35.3 points to 7295.4 with Utilities, Financial and Energy Stocks leading the way. The Gold sector took a hit after Gold fell hard Thursday night although we expect shares to find some bargain hunters today as Spot Gold bounced after the US employment data. Falling stocks outnumbered advancing ones by 726 to 639 and 392 ended unchanged.

The ASX200 is expected to open up 10 points after the SPI200 continued to edge higher into the weekend.

ECONOMIC DATA OUT TODAY (AEDT)

AUD ANZ Job Adverts 11:30am

CNY Trade Balance Tentative

EUR German Factory Orders 4pm

SPI200 INTRADAY LEVELS TO WATCH