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OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 4/03/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures down 38 pts to 6741
- SP500 down 50.57 pts to 3819.72
- NASDAQ Composite down 361.03 pts to 12997.75
- Dow Jones down 121.43 pts to 31,270.09
- FTSE100 up 61.72 pts to 6675.47
- DAX30 up 40.23 pts to 14080.03
- GOLD futures US session (Mar) down $14.70 to $1718.40 an ounce
- COPPER futures US session (Comex May) down $0.0898 to $4.1322 a pound
- OIL futures US Session (Nymex April) up $1.49 to $61.24 a barrel
- CRB Index down 0.02 pts to 189.96
- AUDUSD trading at 0.7783
- EURUSD trading at 1.2065
- GBPUSD trading at 1.3952
- USDJPY trading at 106.9700
- USD Index US Session (ICE Mar) up 0.178 to 90.968
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US indexes were mixed with the DOW range bound as the Nasdaq sold off and dragged the SP500 down with it. Payroll data out ahead of Fridays big employment release showed a weaker than expected number suggesting continuing problems with the labour market. It seems that much of the problem comes with lack of skilled workers returning to work as many businesses are reporting that they are unable to fill vacant positions. It seems that many may be reluctant to return to work being fearful of exposure to the coronavirus and are happy to receive government aid for now. The lack of improvement comes as a $900 Billion relief package in December boosted consumer spending which suggests people are not feeling the pinch as they previously were. Expectations are that the labor market will accelerate in the spring and through summer to boost the economic rebound. The DOW closed down 0.39% while the broader SP500 ended down 1.31% and the Nasdaq closed down 2.70% for the session. In Europe, major Indexes had a choppy session to open strong and then proceed to selloff and give back a lot of the gains into the close. Traders were again spooked by the rise in yields as Euro Bund futures headed lower as inflation expectations rose. UK finance minister Rishi Sunak presented the budget which included further support for companies and people affected by the pandemic but also included a plan for future higher taxes to bankroll the spending.
The USD Index found some support around 90.700 in European trade and rallied as bond yields headed higher. The USD is reacting to bond prices which again edged lower in the US so expect to see pressure to the upside into the dollar if the move in bonds continue. Many say that the move is temporary in bonds and inflation will spike but remain under control but for now, the dollar is moving higher and if it gains momentum, it will put pressure on commodities and trigger some profit taking. The concern also is if there will be another unwind of bonds from hedge funds to take some more risk off their books. The EURUSD reversed earlier gains to move lower as the dollar rallied. If the 1.2080 level holds then we expect to see a push below 1.2040 towards the 1.2000 zone. Support may come in if traders see inflation into the Eurozone lifting also which would make the currency more attractive as a yield play. For now, price remains locked to the USD movements. The GBPUSD was more contained than the Euro and was range bound between 1.3930 and the 1.4000 areas. We expect to see more flushes lower but for price to hold up above the 1.3850 area and eventually push up and out of contraction through 1.4000. The AUDUSD came under pressure off highs made in the European session as major Indexes struggled to gain traction. Traders are still battling with risk expectations and prices being over valued while the economy is on the mend ie/ has too much already been factored into share prices. We will be watching to see if the Aussie can hold the 0.7760/68 area which will drag in more bulls for a move up. If the level breaks then watch for a move down to 0.7720 today. The USDJPY trend up remains in tact as bulls continue to soak up selling pressure. Sellers are being flushed out of the action so we expect the trend to continue and hold today until the USD makes a strong move either way.
SPOT GOLD ran into more selling pressure as the dollar rallied. There remains a committed group willing to buy and try and pick a bottom although price can not hold any gains. Expecting to see the 1700 area come under fire in the near term and a potential spike into the 1670 area. Crude Oil surged higher even as inventory data came out better than expected. Price reacted more to the dollar fall around 2:30am (the time the data was released) with the rally pushing price up and out of the recent contraction lower. This points to a potential run up to retest the highs around the 63.60 area in the near term. Copper came under pressure into the US session open as the dollar weighed on buyers. Price remains in a contraction mode as buyers and sellers fight it out. If price pushes lower into the 4.0890 area, we expect to see a reaction from buyers to support price otherwise the long term trend up may come under fire.
Cryptocurrencies surged as bulls regained some lost ground and pushed prices out of contraction looking to build a new leg higher. It seems that Goldman Sachs has reopened its crypto trading desk which may bring in some pressure and cap the bullish action as they take advantage of the rally and bullish sentiment to squeeze out buyers. Bitcoin is currently trading at $50488.3 up 6.22% while Ethereum is at $1576.45 up 7.27% and Ripple is at $0.44562 up 3.91%.
The ASX200 made back some of the previous sessions losses as price rallied from the open. The buying was still relatively subdued as the index ended up 55.7 points to 6818. The USD fall helped the Metals and Mining, Gold and Resources sectors which all ended up over 3%. Falling stocks outnumbered advancing ones by 685 to 649 and 378 ended unchanged.
The ASX200 is expected to open down 40 points to give up the previous sessions gains and pressure bulls on the open.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD Retail Sales and Trade Balance 11:30am
EUR Retail Sales and Unemployment Rate 9pm
ALL OPEC-JMMC Meetings Tentative
USD Unemployment Claims 12:30am
USD Factory Orders 2am
USD Fed Chair Powell Speaks 4:05am
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SPI200 INTRADAY LEVELS TO WATCH
