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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 13/01/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures down 7 pts to 6610
- SP500 up 4.97 pts to 3804.58
- NASDAQ up 36 pts to 13,072.43
- Dow Jones up 60 pts to 31,068.69
- FTSE100 down 44.37 pts to 6754.11
- DAX30 down 11.60 pts to 13,925.06
- GOLD futures US session (Feb) up $5.70 to $1856.50 an ounce
- COPPER futures US session (Comex Mar) up $0.0717 to $3.6362 a pound
- OIL futures US Session (Nymex Feb) up $0.89 to $53.14 a barrel
- CRB Index up 2.22 pts to 174.95
- AUDUSD trading at 0.7775
- EURUSD trading at 1.2206
- GBPUSD trading at 1.3668
- USDJPY trading at 103.7600
- USD Index US Session (ICE Mar) down 0.410 to 90.032
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US indexes struggled for direction and had a relatively contained session as traders take stock ahead of earnings and Bidens inauguration next week. US bond yields continued higher on expectations that a wave of spending under the new Biden administration will lead to higher inflation. Traders are now waiting to see the shape and size of the stimulus package and how buyers will react to a more settled government and prospects for growth into 2021. Signs that the labour market slowing as the crisis in the US picks up steam may pressure the incoming Biden government to deliver a bigger relief package. Biden has already said that people need $2000 rather than the current $600 on offer so this may be signs of what is to come. Expectations that social media platforms will come under more scrutiny weighed in the NASDAQ after recent riots on the Capitol. The DOW closed up 0.19% while the broader SP500 ended up 0.13% and the Nasdaq closed up 0.28% for the session. In Europe, major Indexes edged lower even as economically sensitive sectors, such as banks and oil, supported the markets. Traders are happy to sit and wait for more clarity on the US’s fiscal spending plans and therefore the flow on affects that will have on a Global recovery.
The USD Index took a hit off the highs in the US session as expectations for a bigger stimulus package weighed on the action to bring in bears again. The recent rally off major lows saw late sellers into the dollar fall lock in gains but we expect that there is some re-positioning ahead of a stimulus package announcement. The EURUSD lifted on the back of the dollar weakness as bargain hunters stepped into the action off the 1.2150 zone after the recent selloff. The pullback has broken the uptrend from 1.1600 so we are watching to see the buyers reaction and whether they will consolidate above 1.2100….expect that the USD will play a big part and how much stimulus has been factored in already. The GBPUSD had a strong session to push higher right from the start of the Asian session into the US close. Short term price action may extend up to the previous highs around 1.3700 but it is extended in the short term. The AUDUSD also bounced back well from recent weakness and unlike the Euro, is holding the longer term uptrend off 70 cents. Expect to see some heat come out of the action in the near term but longer term stimulus expectations be supportive of the Aussie in a weak USD environment. The USDJPY took its lead from the USD and fell during the US session off the 104.300 zone. Like the other major pairs, the move is extended and may need some sellers to be squeezed out prior to continuation lower.
SPOT GOLD found some bargain hunters as the USD came under pressure to move lower. Prices are still under pressure off the 1820 zone which is making bulls tentative. Expect to see some buyers as US bond yields rally although any stock market strength will dampen rallies even on dollar weakness. Crude Oil continued higher as traders evaluated the supply and demand outlook and decided that tighter supply going forward thanks to Saudi production cuts and expectations for a drop in US inventories, will be supportive for price. We expect to see oil continue higher in the near term looking for 55.50 then longer term up to 63.00. Copper had a choppy session finding some selling pressure into the 3.6400 area. Buyers did step up to the plate for support and we expect that this will continue as traders expect a bigger stimulus package and weak USD.
Cryptocurrencies continue to find pressure and will need to find a bid soon or else we may see a bigger correction lower as more buyers come to terms with the pullback and watch losses rise. Bitcoin is currently trading at $34130 up 2.21% while Ethereum is at $1077.02 up 5.29% and Ripple is at $0.29386 up 5.65%.
The ASX200 struggled again after a positive open to end the day down 18.1 points to 6679.1. The 6750 area on the ASX200 is proving to be difficult for bulls and seeing some buyers lock in gains. The IT sector was the biggest drag on the action followed by Metals and Mining and Resources. Falling stocks outnumbered advancing ones by 718 to 573 and 354 ended unchanged.
The ASX200 is expected to open flat as the SPI200 made back any losses into the close of the US session. The ASX200 is at a level that may see some buyers step back into the action and support price off the 6682 level.
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ECONOMIC DATA OUT TODAY (AEDT)
EUR ECB President Lagarde Speaks 8pm
EUR Industrial Production 9pm
USD CPI Data 12:30am
USD Crude Oil Inventories 2:30am
USD Beige Book and Federal Budget Balance 6am
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SPI200 INTRADAY LEVELS TO WATCH
