–
OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 5/02/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures up 69 pts to 6766
- SP500 up 35.03 pts to 3865.20
- NASDAQ up 167.20 pts to 13,777.74
- Dow Jones up 332.26 pts to 31,055.86
- FTSE100 down 4.10 pts to 6503.72
- DAX30 up 126.66 pts to 14,060.29
- GOLD futures US session (Feb) down $40.00 to $1792.20 an ounce
- COPPER futures US session (Comex Mar) down $0.0155 to $3.5500 a pound
- OIL futures US Session (Nymex Mar) up $0.68 to $56.37 a barrel
- CRB Index up 1.20 pts to 180.24
- AUDUSD trading at 0.7602
- EURUSD trading at 1.1965
- GBPUSD trading at 1.3674
- USDJPY trading at 105.5400
- USD Index US Session (ICE Mar) up 0.430 to 91.532
–
US indexes rallied to extend on the recent gains ahead of important employment data out tonight. Bulls were supported by steps taken by the Biden administration to accelerate a stimulus rollout through congress without the Republicans hampering it. US Bond yields rose as traders focused on massive debts levels and potential inflation and how the government will deal with the problems as the vaccines take control of the pandemic. The GME debacle continues as shares sank and Treasury Secretary Janet Yellen and regulators are being pressured to take action…reviewing social media and hedge funds rolls in financial markets. We are expecting short selling to come under scrutiny and social media forums to be more highly regulated as retail traders continue to get caught out in an increasingly volatile market. In our opinion, the reaction may be pointing to a pre-emptive move that officials are taking in advance of an over-valued market seeing a corrective reaction lower soon as bonds point to inflation. The DOW closed up 1.08% while the broader SP500 ended up 0.91% and the Nasdaq closed up 1.23% for the session. In Europe, major Indexes were mixed with the FTSE under-performing the DAX and other regional Indexes for a second session after earnings disappointments weigh on investors. The DAX led the charge higher after Germany’s government agreed on additional support measures for those hit hard from the pandemic.
The USD Index continued to move higher once traders pushed price up through the 91.200 level and cleared the resistance zone. The USD is finding support from flows to the economy as they outperform other major economies on the road to recovery. Traders will also be unwinding some short positions ahead of the employment data later tonight which is expected to be in line with expectations. The tide may quickly change though if numbers underperform which will see shorts jump back into the action. The EURUSD nosedived at the start of the European session as the dollar pressured Euro bulls to break down through support around 1.2000 even and trigger a wave of stop losses. The longer term uptrend is now in question which may trigger further selling which will help the EU on the export front and lead to more upside pressure on the USD. Traders will be monitoring the speed of the vaccine rollout as continued ‘slowness’ will lead to a further widening of the gap between the USD and Euro. The GBPUSD was initially moving lower extending on recent losses with the USD pressing higher. Traders have been concerned for negative interest rates from the Bank of England which would pressure the pound lower. The BOE indicated that it would not take any step towards negative rates for 6 months if at all which led to a spike in the pound to clean out sellers. Price has now broken the back for the recent downtrend so watching for continuation higher in the near term. The AUDUSD was hit coming in to the US open and price pushed back down to test support. We will be watching for the 0.7585 level to hold and squeeze out the recent sells as the longer term trend up remains in tact. The USDJPY was all one way action from the start of Asian trade until the close of the US. Price rallied with buyers soaking up and selling pressure as they target a resistance zone around 105.660 and 106.000. If sellers do not step in the way then expect the squeeze on longer term short sellers to continue.
SPOT GOLD took a beating as expected and broke down below the 1820 area to trigger a wave of stop losses. We expect that the selling may not be over in the short term and for price to potentially move down to test 1760 lows. Crude Oil fought back from a spike lower to test the 55.35 area to end higher on the day. The move seemed driven more from buyers impatiently locking in gains from the recent run up. Momentum up is starting to fade so we may expect to see more of the same as the move up becomes extended…but for now the trend up continues. Copper continued to find weakness from sellers as the dollar rallied. Price failed at the 3.5830 level and may be setting for another test of support. If buyers can hold the line then expect to see a run up.
Cryptocurrencies saw some profit taking of the highs as buyers took the opportunity to play it smart and lock in some gains. Bitcoin is currently trading at $37722.4 up 1.76% while Ethereum is at $1644.01 up 0.60% and Ripple is playing catchup trading at $0.44283 up 14.46%.
The ASX200 started the session relatively flat but then proceeded to be sold lower all session as gains from the previous day were given back by bulls. The index closed down 59.1 points to 6765.5 with all sectors feeling some pain. The biggest pressure came in the Gold and Utilities sectors while Energy was not far behind. Falling stocks outnumbered advancing ones by 787 to 600 and 317 ended unchanged.
The ASX200 is expected to open up 70 points after SPI200 had a solid overnight session thanks to the US.
–
ECONOMIC DATA OUT TODAY (AEDT)
AUD RBA Gov Lowe Speaks 9:30am
AUD RBA Monetary Policy Statement and Retail Sales 11:30am
EUR German Factory Orders 6pm
CAD Employment Change and Unemployment Rate 12:30am
USD Non-Farm Employment Change and Unemployment Rate 12:30am
–
SPI200 INTRADAY LEVELS TO WATCH
