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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 29/01/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures up 69 pts to 6659
- SP500 up 36.50 pts to 3787.27
- NASDAQ up 66.56 pts to 13,337.16
- Dow Jones up 300.19 pts to 30,603.36
- FTSE100 down 41.22 pts to 6526.15
- DAX30 up 45.47 pts to 13,665.93
- GOLD futures US session (Feb) down $4.90 to $1840.00 an ounce
- COPPER futures US session (Comex Mar) up $0.0218 to $3.5793 a pound
- OIL futures US Session (Nymex Mar) down $0.57 to $52.28 a barrel
- CRB Index down 1.04 pts to 174.29
- AUDUSD trading at 0.7688
- EURUSD trading at 1.2125
- GBPUSD trading at 1.3730
- USDJPY trading at 104.2400
- USD Index US Session (ICE Mar) down 0.145 to 90.495
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US indexes managed to bounce back from the previous sessions selloff on the back of the short squeeze concern. Buyers jumped straight back into the action from the open to lift price back towards Tuesdays close although faded into the close. GDP data out in the US showed just how hard the economy was hit by the pandemic as the US contracted at its deepest pace since World War II as consumer spending (which accounts for around two thirds of the economy) and business spending was suppressed while millions were pushed out of work. Traders remain focused on the vaccine led recovery as Biden unveiled a recovery plan worth $1.9 trillion. The US debt remains a massive issue that we expect to bite back soon but the cost of doing nothing now is far greater. The DOW closed up 0.99% while the broader SP500 ended up 0.97% and the Nasdaq closed up 0.50% for the session. In Europe, major Indexes closed stronger generally across the board although the FTSE lagged as a rally in the Pound weighed on the export heavy economy and as they continue to deal with the virus spread. Upbeat earnings and gains in airlines lifted prices off early lows after bears hit the market on the open.
The USD Index again found a safe haven bid to buoy prices through the Asian and European sessions as markets were under pressure. Sellers did cap price on any push toward the 90.900 area and managed to squeeze out buyers once the US opened for trade and Indexes bounced. For now, prices seem content to remain in the range between the 90.000 support and 90.900 resistance. Any extended negative move in shares will lift price which may be enough to test the resolve of sellers for a move higher. For now, stimulus will continue to keep prices down. The EURUSD managed to fend off any weakness during the Asian and European sessions as buyers supported the action around 1.2085. Once the USD started to shows signs of cracking, the Euro was quick to respond and rally. Price will need to add to the move up to convince buyers although price is extended so we may need to see a pullback hold a higher low first. The GBPUSD bulls managed to hold the 1.3635 area well and ramp price straight back up to resistance around 1.3745 and squeeze out the shorts. We will have to see if the rally was over done as price, like other majors, is extended and trigger some sellers into action off the resistance level. The AUDUSD was under pressure during Asian and European trade before price did an about face to spike higher on the US share market rally. Price stalled at the 0.7700 area which may see some traders lock in some gains. From here, it will be interesting to see whether buyers are happy to hold a higher low for a bigger move up. The USDJPY continued the ramp higher once the Asian session opened and pushed price through a key zone around 104.220. Bulls dismissed the USD sellers to hold the highs into the close so we may see another extension on the rally today although the YEN will be watching local data out around 10:30am.
SPOT GOLD hovered around the lows as sellers held prices down even as the USD rallied. If price starts to attack the 1820 area, then we expect to see a bigger unwind of buyers who got it wrong. This will depend on the USD and shares tonight in the US session. Crude Oil is starting to show some range bound action as price held an inside offerzone around 53.30. Sellers seem happy to cap the action for now while buyers defend the 51.80 zone. There is room for a big unwind of buyers if price can not hold support as many will race to lock in the gains although OPEC can still support price to fend off a major pullback. Copper took another hit in the Asian and European sessions before the positive US sentiment lifted price for a major spike and squeeze on shorts. Price will need to put in an effort to hold a higher low soon to convince buyers that they will see another good leg up.
Cryptocurrencies were happy with the US session as they lifted off lows in a risk on mood. Bitcoin is currently trading at $32733.4 up 3.49% while Ethereum is at $1336.30 up 3.74% and Ripple is at $0.26158 up 2.35%.
The ASX200 had another rough session to give back in two days what it made in the previous thirteen…’up by the escalator and down by the elevator’. The index ended the day down 130.9 points or 1.93% to 6649.7 with all sector bar Utilities taking a hit. The IT sector led the charge lower down 4.76% and that was followed closely by Gold which was down 3.5%. Falling stocks outnumbered advancing ones by 1175 to 277 and 251 ended unchanged. Asian markets also took a hit but will be expected to lift on the open as the futures markets rallied along with the US.
The ASX200 is expected to open up 70 points after a strong performance in the SPI200 as US indexes bounced back.
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ECONOMIC DATA OUT TODAY (AEDT)
JPY Unemployment Rate and CPI data 10:30am
AUD PPI and Private Sector Credit 11:30am
EUR German Prelim GDP and Import Prices 6pm
EUR German Unemployment Change 7:55pm
CAD GDP 12:30am
USD Personal Income and Spending 12:30am
USD Pending Home Sales and Consumer Sentiment 2am
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SPI200 INTRADAY LEVELS TO WATCH
