The Morning Jumpstart Macro View

OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 23/07/21 (as at 7:15am AEST)

  • SPI200 (Sept) overnight futures down 15 pts to 7280
  • SP500 up 8.79 pts to 4367.48
  • NASDAQ Composite up 52.65 pts to 14684.60
  • Dow Jones up 23.35 pts to 34823.35
  • FTSE100 down 29.98 pts to 6968.30
  • DAX30 up 92.04 pts to 15514.54
  • GOLD futures US session (Aug) up $3.80 to $1807.20 an ounce
  • COPPER futures US session (Comex Sept) up $0.0665 to $4.3385 a pound
  • OIL futures US Session (Nymex Sept) up $1.61 to $71.91 a barrel
  • CRB Index up 3.35 pts to 216.34
  • AUDUSD trading at 0.7383
  • EURUSD trading at 1.1770
  • GBPUSD trading at 1.3765
  • USDJPY trading at 110.1500
  • USD Index US Session (ICE Sep) up 0.091 to 92.850

US indexes edged higher to add to recent gains as bulls continued their push higher. It was a move back into tech stocks that supported the move higher with the Nasdaq outpacing the broader market SP500 and the DOW. Tech was happy to push higher ahead of their earnings next week as bulls may be factoring in some lofty expectations. Indexes may be running out of steam into the previous highs and price may need to consolidate before a push to new high levels. Unemployment numbers came in higher than expected which adds further weight to the Feds view for continued bond buying support as they stick to the full employment mandate over price stability. The Fed has one eye on inflation and the other on the labour market and both are moving as they expected. The market is also focusing closely on new labour market data releases for hints as to when the Fed will start talking about raising key interest rates and ending stimulus. The DOW closed up 0.07% while the broader SP500 ended up 0.20% and the Nasdaq closed up 0.36% for the session. In Europe, major Indexes were mixed with the DAX moving higher while the FTSE moved lower. The ECB pledged to keep interest rates at record lows for even longer and will not hike rates until it sees inflation reach its 2% target. The news pressured the banking sector as bond yields declined.

The USD Index had a spike lower into the US open before bulls stepped in to soak up the selling pressure. Price flushed below the 92.770 zone before recovering and ending higher on the day. The rally may have been supported by bond prices which also found a bid into the US open. We expect to see any push lower soaked up as buyers have their eyes on higher levels and a push into 93.200 as long as 92.600 can hold. The EURUSD continues to be unsure of itself as price whipped around between resistance and support. The Euro did spike into 1.1830 before price fell when traders factored in the continued ECB support and headwinds to the Eurozone and therefore the currency pair. Price again found support into 1.1760 which we will be watching to keep the bears at bay today unless the USD does decide to go for a run higher. The GBPUSD continued its march higher during the Asian session and into the US close. Price pushed above the 1.3740 zone which was previous support so it will be interesting to see if the bulls can keep the ball rolling into the weekend. Expecting to see the 1.3740 level tested prior to any move up. The AUDUSD managed to add to the previous sessions gains in the Asian and European sessions before seeing chop through US trade. Price was rejected by sellers into the 0.7390 zone but also held minor support at 0.7360. If bulls are looking for higher prices they will hold the 0.7360 level today but we expect it will depend on the share market sentiment into the weekend. The USDJPY spent all night contracting off the highs to consolidate the recent gains. We expect to see bulls continue to provide some support before attempting to ramp price up and through 110.400 as they have a lot of sellers that could be squeezed out of the action.

SPOT GOLD had a fun old night with an initial push lower to trap some sellers before recovering and moving back up to where it started. Buyers remain happy to soak up the selling pressure for now on moves below 1800 so we will be watching for any higher low to drag in fresh bulls and build for a new leg higher. Crude Oil continued to work its way up off major support on expectations that the global economy will still be under-supplied even with new production coming on line. Price may find some selling pressure into the 72 area as the move up runs out of steam and recent buyers look to lock is some gains. If the level is cleared, then we are looking for a push to the 73.00/73.50 zone. Copper has put in a pivotal session even though the action was contained and bulls only managed to edge price higher. The move up through 4.3170 pushed price out of longer term daily contraction so price may look to test into new highs over the longer term. It will be interesting to see how local copper miners react to the move today to see whether traders believe that there is a decent rally on the horizon. Expecting to see some chop but for Copper price to generally hold a good bid.

Cryptocurrencies were well contained but bulls managed to consolidate the previous gains off major lows which is a good sign that the majors want to move higher in the near term and would be a welcome relief for many bulls. Bitcoin is currently trading at $32376.5 up 1.74% while Ethereum is at $2022.46 up 3.79% and Ripple is at $0.59505 up 5.97%.

The ASX200 continued with the previous sessions rally yesterday to push up into the top end of the recent range so bulls will be eager to see if it continues today and finally pushes into new highs. The index ended the day up 77.7 points to 7386.4 with Energy, Metals and Mining and Resource stocks leading the bulls higher…although other sectors easily held their own. Rising stocks outnumbered declining ones by 789 to 547 and 408 ended unchanged.

The ASX200 is expected to open down 15 points as the SPI200 drifted lower off resistance which would mean that punters are expecting the ASX200 to hold below all time highs into the weekend.

ECONOMIC DATA OUT TODAY (AEDT)

JPY Bank Holiday

GBP Retail Sales 4pm

EUR French Flash Manufacturing and Services PMI 5:15pm

EUR German Flash Manufacturing and Services PMI 5:30pm

EUR Flash Manufacturing and Services PMI 6pm

GBP Flash Manufacturing and Services PMI 6:30pm

CAD Flash Manufacturing and Services PMI 10:30pm

USD Flash Manufacturing and Services PMI 11:45pm

SPI200 INTRADAY LEVELS TO WATCH