The Morning Jumpstart Macro View

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

  • SPI200 (Jun) overnight futures up 13 pts to 7368
  • SP500 up 7.71 pts to 4255.15
  • NASDAQ Composite up 104.72 points to 14174.14
  • Dow Jones down 85.85 pts to 34393.75
  • FTSE100 up 12.62 pts to 7146.68
  • DAX30 down 19.63 pts to 15673.64
  • GOLD futures US session (Aug) down $13.80 to $1865.80 an ounce
  • COPPER futures US session (Comex July) down $0.0132 to $4.5243 a pound
  • OIL futures US Session (Nymex July) down $0.03 to $70.88 a barrel
  • CRB Index down 1.21 pts to 211.03
  • AUDUSD trading at 0.7712
  • EURUSD trading at 1.2121
  • GBPUSD trading at 1.4107
  • USDJPY trading at 110.0700
  • USD Index US Session (ICE Sep) down 0.040 to 90.487

US indexes have held up well since Friday with the broader market SP500 pushing into new all time closing highs the last two sessions. The SP500 was supported by tech as the NASDAQ continued to add to gains hitting new all time highs with a late spike up into the close. Markets gained on lower volume as many traders await the FOMC statement on Thursday where they will be combing it for new cues from the central bank on its inflation outlook. Recent economic data suggests that the US is not overheating so the Fed is expected to continue on the same path until potentially the central banks annual Jackson Hole conference in August. Many will be watching for any hint that the Fed is ready to discuss tapering of its bond buying program that have kept borrowing costs low. US 10-year bonds pushed lower as yields rallied into the US open and continued down into the close of the session. Recent buyers may be squaring up some positions and taking some risk off the table ahead of the FOMC release. The DOW closed down 0.25% while the broader SP500 ended up 0.18% and the Nasdaq closed up 0.74% for the session. In Europe, major Indexes were mixed with the German DAX ending lower and the FTSE higher. Energy stocks helped to support the action on continued strength in the oil market. Traders are also awaiting cues from this weeks FOMC statement on rates and inflation. The key for continued market bullishness is whether or not the Fed looks to lay out a path that involves a withdrawal of stimulus.

The USD Index spiked higher in European trade on Friday and has managed to hold the gains above 90.000 since. Bulls look to be making a stand off the lows as they await FOMC with many squaring some shorts. The recent movements into the dollar and overnight movements into the US 10-year bond, suggests that many may be anticipating talk of easing stimulus. If that is the case, we may see the USD work its way higher through 90.620 highs and test into 90.905 resistance. The EURUSD also saw a good move lower on the USD strength Friday and has since spent time squeezing out some of the sellers on a pullback off 1.2093 lows. We may see some more back and fill as price grinds higher today in the Asian session. The GBPUSD continues in a range between 1.4090 and 1.4213 but the pressure is mounting on the downside. Price has recently held lower levels and flushed support areas with the latest being a flush of 1.4073 down to 1.4070 before a bounce back into the range. We expect that price will creep higher as long as 1.4090 holds a retest today. The AUDUSD took a hit Friday night with the spike into the USD with price pushing down through the 0.7726 support zone. Price has since consolidated below the level and held a retest of the level which suggests some more downside to come. If sellers hold below the level today, then we expect to see a move down to test 0.7689. The USDJPY did not find the weakness as expected after last weeks CPI number but instead has rallied back up through 109.800 after consolidating between 109.601 and 109.823. We expect to see a minor squeeze lower as the rally into the US close is extended but bulls may want to test previous highs at 110.300 first.

SPOT GOLD did an about face off 1902 Friday as the USD rallied. Price was under constant selling pressure before spiking off lows overnight at the start of the US session. The move into support around 1850 would have cleared out a lot of stale buyers so we will be watching to see if price can continue to hold minor higher lows off the level today and see a bid establish again. Crude Oil moved off highs around 71.75 into the US open but managed to bounce off support around 70.65 into the close. Price continues to find support on expectations that global demand will increase into the end of the year and into the next. The longer term trend remains in tact off 65.36 and is being anchored at 69.43. Expect to see a test of 70.65 but for the level to hold and drag in more bulls. Copper has done well since Fridays ASX close. Price spiked hard up off major support and has since retested the breakout level at 4.5000 suggesting that there may be more bullish action to come back into the highs around 4.5860. Longer term, price is holding major lower highs with the recent holding the action down at 4.5860 so we do not expect to see bulls get out of hand today.

Cryptocurrencies rallied as Bitcoin pushed back above $40,000 on Musk’s recent comments that Tesla may resume bitcoin transactions. Bitcoin is currently trading at $40203.2 up 3.31% while Ethereum is at $2563 up 1.70% and Ripple is at $0.88887 up 0.61%.

The ASX200 ended the week on a positive note but only by a few fraction ahead of the ASX long weekend. The index ended the session up 9.8 points to 7312.3 with the Gold sector by far the strongest while Metals and Mining and Resources also put in a good effort although Financials weighed most on the market to cap the enthusiasm. Rising stocks outnumbered declining ones by 809 to 512 and 436 ended unchanged.

The ASX200 is expected to open up 50 points from Fridays close as the SPI200 has kicked on into new highs.

ECONOMIC DATA OUT TODAY (AEDT)

AUD Monetary Policy Meeting Minutes 11:30am

EUR German Final CPI 4pm

GBP Unemployment Rate, Claimant Count and Average Earnings Index 4pm

EUR Trade Balance 7pm

GBP BOE Gov Bailey Speaks 10:15pm

USD Retail Sales Data and PPI 10:30pm

USD Industrial Production 11:15pm

SPI200 INTRADAY LEVELS TO WATCH