–
OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 17/02/21
- SPI200 (Mar) overnight futures down 20 pts to 6838
- SP500 down 2.24 pts to 3932.59
- NASDAQ down 47.97 pts to 14047.50
- Dow Jones up 64.35 pts to 31522.75
- FTSE100 down 7.25 pts to 6748.86
- DAX30 down 44.88 pts to 14,064.60
- GOLD futures US session (Feb) down $28.60 to $1793.00 an ounce
- COPPER futures US session (Comex Mar) up $0.0498 to $3.8378 a pound
- OIL futures US Session (Nymex Mar) up $0.66 to $60.13 a barrel
- CRB Index up 2.38 pts to 187.67
- AUDUSD trading at 0.7756
- EURUSD trading at 1.2107
- GBPUSD trading at 1.3906
- USDJPY trading at 105.9900
- USD Index US Session (ICE Mar) up 0.092 to 90.562
–
US indexes opened stronger but then faded into the close as the reflation trade gives investors something to think about. US bond yields rallied as expectations for an increase in inflation take hold which supported the USD. The Nasdaq moved lower as tech giants came under pressure with traders locking in some gains after the index opened at new all time highs. If many are expecting a return to the norm in coming months then ‘stay at home’ trades will likely come off the boil. With inflation on the cards, many will be searching for under valued stocks and take some heat out of the over-performers that have stoked the rally. The DOW closed up 0.20% while the broader SP500 ended down 0.06% and the Nasdaq closed down 0.34% for the session.. In Europe, major Indexes ended the session lower to give up some gains from the previous session. Gains in the Mining and Banking sectors struggled to offset losses in most other sectors as traders are uncertain of the pace of a Eurozone recovery. Traders may be looking to the US for yield as stimulus is set to stoke inflation.
The USD Index was initially moving lower into the 90.000 area before price spiked higher on the back of rising bond yields. Some shorts were happy to lock in some gains as the focus moves to inflation after some bullish comments from a US Fed Reserve official and also some positive manufacturing data. If the USD continues higher, we expect that there may be some profit taking into shares as markets are extended and a lot of the positive news is already factored into the price. The EURUSD followed the USD lead and gave up early gains to spike lower and trigger a wave of stop losses from buyers. If bond yields continue to rise expect to see further support into the USD and traders turning their backs on the Euro as economic data continues to lag in the Eurozone. The GBPUSD also took a hit on the dollar rally although bulls soaked up a lot of the selling pessure to hold the Pound in its uptrend. The Pound reacted off the 1.3870 area which we will be watching for support again if price moves lower. If the level can not hold, then there will be an unwind of recent buyers from the 1.3600 area. The AUDUSD took a turn lower after pushing above the 0.7800 level in the Asian session. The sharp move lower coincided with the dollar rally in European trade and it will be interesting to see if the move down has some legs to it or whether it is just another swing thanks to short term covering from buyers. The focus will be on the USD so the AUD will need to hold above the 0.7715 area to fend off a bigger wave of selling potentially through 0.7650. The USDJPY charged higher after flushing out some buyers on a push down to 105.182. Price is extended at current levels so may see some short term profit taking from buyers which we expect to be soaked up to build a higher low for continuation up. Price has been in a downtrend since march…albeit choppy…which has now broken so there is a lot of longer term fuel to stoke a rally.
SPOT GOLD showed its hand as buyers lacked any strength before the USD rally saw sellers dive into the action to push price straight down through 1810. There was a fight back off the lows but that was quickly quashed and price ended back down below the 1800. Bulls will have their work cut out for them as there will be some lingering negative sentiment today especially if 1790 comes under fire. Crude Oil has now closed the gap up from Monday and buyers look set to support another run up above the 61.00 area. With expectations that the vaccine rollouts are supporting an increase in economic activity, traders will be looking to an increase in demand for oil to continue to support price. Copper brushed aside the dollar strength to also focus on increasing demand. Price was held up above the 3.8010 area and ended up at session highs. The question now is how much of the recovery has been factored in already and can the move up continue before a major correction.
Cryptocurrencies continued to be supported on expectations that Bitcoin is becoming more ‘mainstream’ and will be adopted by more and more companies after the Tesla news. Bitcoin pushed above the 50k mark only to fade into the US close. Price continues to look heavy so expect to see rallies find some profit taking in the near term. Bitcoin is currently trading at $48433.4 down 0.31% while Ethereum is at $1739.48 down 4.72% and Ripple is at $0.49048 down 13.82%.
The ASX200 had another positive session and added to the previous days gains as the index ended the day up 48.4 points to 6917.3. The Energy sector was the best performer being followed by Industrials and Resources while Gold socks came under some pressure. Falling stocks outnumbered advancing ones by 685 to 685 and 349 ended unchanged.
The ASX200 is expected to open down 20 points as the US faded off opening highs to drag the SPI200 lower.
–
ECONOMIC DATA OUT TODAY (AEDT)
AUD MI Leading Index 10:30am
JPY Trade Balance 10:50am
CNY Bank Holiday
AUD RBA Assist Gov Kent Speaks 12pm
GBP CPI and PPI Data 6pm
CAD CPI Data 12:30am
USD Retail Sales Data 12:30am
USD FOMC Meeting Minutes 6am
–
SPI200 INTRADAY LEVELS TO WATCH
