The Morning Jumpstart Macro View

OVERNIGHT MARKET SNAPSHOT FOR MONDAY 28/06/21

  • SPI200 (Sept) overnight futures up 5 pts to 7212
  • SP500 up 14.21 pts to 4280.70
  • NASDAQ Composite down 9.32 points to 14360.39
  • Dow Jones up 237.02 pts to 34433.84
  • FTSE100 up 26.10 pts to 7136.07
  • DAX30 up 18.74 pts to 15607.97
  • GOLD futures US session (Aug) up $5.10 to $1781.80 an ounce
  • COPPER futures US session (Comex July) down $0.0155 to $4.2895 a pound
  • OIL futures US Session (Nymex July) up $0.75 to $74.05 a barrel
  • CRB Index up 0.90 pts to 210.42
  • AUDUSD trading at 0.7590
  • EURUSD trading at 1.1935
  • GBPUSD trading at 1.3879
  • USDJPY trading at 110.7500
  • USD Index US Session (ICE Sep) up 0.002 to 91.797

US indexes ended the week on a positive note with the broader market SP500 hitting new record highs again. The DOW outperformed the tech heavy Nasdaq after Bidens infrastructure deal and Banks lifted trader sentiment. The Bank Stress Tests results helped to lift the sector after the Fed Reserve announced the banking industry could easily withstand a severe recession and are well above minimum capital requirements. The results now clear the way for banks to raise dividends and buy back more stock which was suspended during the pandemic. Also supporting bulls was data out for the Feds key inflation indicator which was a little weaker than expected while personal spending came in weaker than expected to take some heat out of the inflation and rate rise narrative. The DOW closed up 0.69% while the broader SP500 ended up 0.33% and the Nasdaq closed down 0.06% for the session. In Europe, major Indexes also ended the week with minor gains but remain below record highs in the broader Eurostoxx50 index. It only looks like a matter of time before the DAX rallies to test into new all time highs with the positive global economic backdrop. The UK FTSE100 is also edging higher but remains a long way from new highs as they continue to battle with covid restrictions which many say are too restrictive to revive the key summer holiday period. Still, the FTSE outperformed its peers for the session thanks to energy and mining stocks.

The USD Index was again ramped higher at the start of the US session after being sold down during European trade. Price remains range bound between 91.900 and 91.500. The relatively high inflationary numbers continue to see buyers support pullbacks but not willing to break price out into new highs unless there is a clear trigger that inflation may not be transitory. Expecting price to grind its way lower today off 91.850 to squeeze out the late buyers fro Fridays rally. The EURUSD spiked higher as the USD fell directly after the inflation data release at 10:30pm AEST. Price then gave up all the gains on the open of US trade as the dollar was ramped higher. Price continues to go lock step with the USD so we are watching for the 1.1920 level to hold as support today and for buyers and sellers to be well contained. The GBPUSD held the lower high as expected and is currently working its way down into support around 1.3835. We expect to see continued pressure on the Pound today and for sellers to extend on Fridays move down to flush out more buyers ahead of the European session open. The AUDUSD worked its way higher through Asian and European trade before being sold off on the USD spike. Price action is not too clean at the moment suggesting some uncertainty into the recent rally. For now, the recent move up is being supported at 0.7565 which will need to hold today to fend off a squeeze lower. The USDJPY is also showing a little uncertainty as price continues to grind lower off the 111.000 area. The way price rejected a flush lower into 110.500 suggests that bulls are not done yet and may want to engineer another rally up through 111.000. If the 110.500 level holds in the short term, then watching for a higher low to trigger the short squeeze.

SPOT GOLD continues to hold above 1772 in a narrow range with sellers defending 1788 again on Friday thanks to the ramp into the USD. Bulls will need to see price break up and through 1788 before a major short squeeze higher can play out. For now, we expect to see price hold between 1772 and 1788 in the Asian session unless the USD makes a decisive move either way. Crude Oil again showed some bullish action with selling pressure being easily soaked up by bulls as price lifted off 73.00 and ended into recent highs around the 74.00 mark. We are expecting to see price kick higher but may need to flush out some late buyers first. Copper failed to run higher and came under pressure from the rally into the USD. Price fell away from the 4.3400 resistance level in European trade with triggered a selloff and squeeze on buyers which we expect may continue in Asian trade today. A break below 4.2675 will trigger more sellers into action.

Cryptocurrencies had a choppy weekend but generally found some support on dips. Prices spiked higher today as the Asian market wakes up so we may expect further bullish action as Bitcoin holds up off major support. Bitcoin is currently trading at $34307.4 up 7.91% while Ethereum is at $1944.71 up 8.50% and Ripple is at $0.63791 up 4.74%.

The ASX200 reversed the previous sessions price action Friday to start the session moving higher and then held the gains into the close. The index ended the week on a positive note up 32.7 points to 7308 with the Gold, Utilities and Materials sectors leading the way higher. Rising stocks outnumbered declining ones by 770 to 623 and 397 ended unchanged.

The ASX200 is expected to open up 5 points after the US lifted the SPI200 into the US close.

ECONOMIC DATA OUT TODAY (AEDT)

EUR German Import Prices 4pm

EUR German Buba President Weidmann Speaks 10pm

GBP MPC Member Haldane Speaks 10pm

USD FOMC Member Williams Speaks 11pm

SPI200 INTRADAY LEVELS TO WATCH