The Morning Jumpstart Macro View

OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 8/06/21 (as at 7:15am AEST)

  • SPI200 (Jun) overnight futures up 10 pts to 7314
  • SP500 up 0.74 pts to 4227.26
  • NASDAQ Composite up 43.19 points to 13924.91
  • Dow Jones down 30.42 pts to 34599.82
  • FTSE100 up 17.87 pts to 7095.09
  • DAX30 down 36.55 pts to 15640.60
  • GOLD futures US session (Aug) down $3.60 to $1895.20 an ounce
  • COPPER futures US session (Comex July) up $0.0160 to $4.5425 a pound
  • OIL futures US Session (Nymex July) up $0.82 to $70.05 a barrel
  • CRB Index up 1.67 pts to 211.21
  • AUDUSD trading at 0.7738
  • EURUSD trading at 1.2174
  • GBPUSD trading at 1.4149
  • USDJPY trading at 109.5000
  • USD Index US Session (ICE Jun) up 0.181 to 90.127

US indexes saw some choppy trade only to end the session relatively flat with the broader market SP500 holding just below all time highs. Jolts job data out overnight showed that job openings surged to a new record high in April while more people voluntarily left their employment. Rising wages helped job growth but will also put pressure on inflation so traders are now focused solely on CPI data out Thursday and may remain in a holding patter until then. Institutional traders were happy to remain on the sidelines and watch the action unfold into the meme stocks. Retails traders were again at it and continued to fuel the ongoing smallcap stocks rally with the latest being Clover Hill Investments which surged 85.8% leaving it the biggest percentage winner in the Nasdaq. Other meme stocks that are seeing social media buzz such as Gamestop, Bed Bath & Beyond and Workhorse Group ended up between 7% and 12%. The DOW closed down 0.09% while the broader SP500 ended up 0.02% and the Nasdaq closed up 0.31% for the session. In Europe, major Indexes were mixed with the DAX edging lower off all time highs while the FTSE continued higher. Indexes were supported by action into travel and real estate shares while prices were pressured by weaker than expected German Industrial Production data and doubts whether Britain will lift its restrictions later this month over concerns of the spreading of new variants of Covid-19.

The USD Index managed to make its away back above the 90.000 level earlier in Asian trade before getting stuck in a range into the US close. Seems that traders remain on the sidelines for now awaiting US CPI data leaving some sellers happy to lock in some gains for now. Bulls were capped as long term Bond yields were pushed to their lowest level in more than a month after a report showed small business owners were less confident with the jobs market. We would expect to see the dollar continue to be held between 90.250 and 89.920 today. The EURUSD was a bit of a choppy mess during the European session as the weaker than expected German data weighed on the action along with the USD grind higher. There remains a lot of uncertain Forex traders who are not willing to commit to the market with the volatility so low until there is a clearer direction on the USD. The Euro may continue to creep lower today being held down at 1.2190. The GBPUSD could not add to the recent gains for a test into 1.4200 and instead drifted lower. Price remains in a wide range for now with recent concern over extended restrictions expected to weigh on the action. For now the Pound is being held down at 1.4163 so if the level breaks, expect a grind up to 1.4185, but if it holds, expect a grind down to 1.4120…either way we do not expect any clear directional movement. The AUDUSD contracted off resistance at 0.7763 as expected with some buyers locking away some gains. Bulls will try to defend the 0.7727 area to stop from a bigger move lower potentially to the 0.7680 zone. The USDJPY could not continue lower to the 109.100 area as buyers stepped in to squeeze out some sellers on a push higher. The move up did not go too far as price was capped into 109.560. There may be a further grind higher today but price action is not looking too pretty for now and may be capped at 109.630 and supported around 109.200.

SPOT GOLD had a bit of a messy choppy session with a push lower into the 1885 area rejected. Price also was capped at 1902 so we expect to see further directionless range bound market with both sides getting flushed out of the action. With bond yields moving lower, we would expect to see further pressure lower although any flush down rejected again until the US CPI release Thursday. Crude Oil kicked higher as price reacted to comments from a US diplomat who said that even if the US were to reach a nuclear deal with Iran, hundreds of sanctions on Tehran would remain in place…meaning that additional Iranian supply will not hit the market anytime soon. Price ended the session on highs above the 70 level so we would expect to see some minor profit taking from bulls to trigger a pullback back below 70. Copper bulls are not finished as price moved lower through Asian and European trade to flush out previous lows prior to a ramp higher during the US session up through 4.5385 highs. We will be watching to see if bulls can now hold a higher low above the 4.5000 level.

Cryptocurrencies remain under pressure as prices test major lows and hold minor lower highs. Bitcoin did manage to react up and off the 31200 lows which may give bulls some confidence but the selling pressure may be far from over yet. Bitcoin is currently trading at $33541.0 down 1.71% while Ethereum is at $2528.61 down 3.76% and Ripple is at $0.87636 up 0.17%.

The ASX200 swung between gains and losses yesterday as a strong open saw sellers push price down into negative territory before bulls fought back into the close. The index ended the day up 10.7 points to 7292.6 as prices continue to struggle into new highs. The IT sector was again the best performer, taking its lead from the Nasdaq the previous night, while Utilities were the next in line and others ended just better than breakeven. With the USD swinging around, Metals and Mining and Resources were again in the red. Falling stocks outnumbered advancing ones by 694 to 668 and 397 ended unchanged.

The ASX200 is expected to open up 10 points as the SPI200 worked its way higher from the day sessions close.

ECONOMIC DATA OUT TODAY (AEDT)

AUD RBA Assist Gov Kent Speaks 9:30am

NZD Prelim ANZ Business Confidence 11am

CNY CPI and PPI 11:30am

EUR German Trade Balance 4pm

CAD BOC Rate Statement and Overnight Rate 12am

USD Final Wholesale Inventories 12am

USD Crude Oil Inventories 12:30am

USD 10-yr Bond Auction 3:01am

SPI200 INTRADAY LEVELS TO WATCH