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OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 14/01/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures up 7 pts to 6622
- SP500 up 8.65 pts to 3809.84
- NASDAQ up 56.52 pts to 13,128.95
- Dow Jones down 8.22 pts to 31,060.47
- FTSE100 down 8.59 pts to 6745.52
- DAX30 up 14.65 pts to 13,939.71
- GOLD futures US session (Feb) up $4.40 to $1848.60 an ounce
- COPPER futures US session (Comex Mar) up $0.0092 to $3.6147 a pound
- OIL futures US Session (Nymex Feb) down $0.31 to $52.90 a barrel
- CRB Index up 0.24 pts to 175.19
- AUDUSD trading at 0.7737
- EURUSD trading at 1.2154
- GBPUSD trading at 1.3636
- USDJPY trading at 103.8900
- USD Index US Session (ICE Mar) up 0.246 to 90.310
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US indexes were flat and generally in a holding pattern for the session as they await more news on fiscal stimulus plans. Trump became the first president to be impeached for a second time as 10 Republicans voted against him. The Feds Beige book showed the US posted a $144 billion deficit for the month due to higher relief outlays and unemployment benefits. It also showed economic activity remained subdued and only increased modestly in the previous few weeks due to rising covid cases. This led to a move lower into the close as traders continue to focus on the later stages of 2021 and a ‘re-opening’. US Bond yields fell after rising for the previous six sessions. The DOW closed down 0.03% while the broader SP500 ended up 0.23% and the Nasdaq closed up 0.43% for the session. In Europe, major Indexes were mixed as traders were well contained awaiting news on a US stimulus package and the flow on affects for global growth as rising coronavirus cases and lockdowns continue to hamper economic activity in Europe. Banks and travel stocks fell most on fears for a slow recovery in earnings.
The USD Index edged higher off the previous sessions lows as dollar bears become more cautious on rising US bond yields and prospects for inflation. The ‘short dollar’ trade from 2020 is a very crowded trade and will see more volatility down around lows if bond yields continue higher. Many traders will now be assessing whether the stimulus weakness has been already factored into price or not. If so, then we may be looking at a short squeeze in the near term. Many shorts will also be happily squaring up some risk ahead of further stimulus news with the risk being that the package will not be as big as many expect. The EURUSD moved back down to test the lows from the previous session around 1.2140. Like the USD, there are a few buyers built up that may be getting nervous if price remains heavy. Expect that a strong break below 1.2140 will see a lot of sell stops triggered and may be the start of another leg lower. The GBPUSD fared better than the Euro as sellers were well contained off the highs. If buyers can hold the 1.3630 area then we expect to see a run at the highs at 1.3700 and potentially through but do expect this will need to be associated with a move back down in the USD. The AUDUSD also backed off from the previous sessions high into 0.7780 as sellers unwound some of the rally on dollar strength. A push up through 0.7755 may see another leg up but a break below 0.7725 will bring in more sellers for a run below 0.7700. The USDJPY rallied with the USD although not as convincingly as we would have expected. This suggests that there is more room to move lower which points to dollar weakness. For now, the pair may be in a holding pattern until the USD makes a move either way.
SPOT GOLD bulls are not looking too convincing off the 1820 level as they battle with the USD strength. Price is finding sellers happy to cap any rallies around 1863 so this may trigger more sellers into action and a move down through 1820. Crude Oil saw some heat come out of the recent rally as bulls took a breather and price moved lower from the US open. We will be watching to see if price is going to hold the 52.70 area and build for another leg higher. Copper also struggled as traders assess the dollar strength and where to next for the metal. Price is range bound for now between 3.6020 support and 3.6405 resistance. A break of either will trigger either another leg up or unwinding of long term buyers.
Cryptocurrencies managed to fight back from the recent selling and push up into highs. Bitcoin is now up at a resistance level that will trigger some interest from both bulls and bears as to whether it will be defended or broken for a rally. Bitcoin is trading at $35960.6 up 4.60% while Ethereum is at $1102.12 up 1.91% and Ripple is at $0.30187 up 2.48%.
The ASX200 fought back from a weak open as buyers soaked up early selling pressure to push the index up into the close. In the end the index could only close up 7.5 points to 6686.6 as the Energy (up 4.25%), Gold and Resources sectors led the charge higher. Rising stocks outnumbered declining ones by 739 to 572 and 372 ended unchanged.
The ASX200 is expected to open up 5/10 points as the SPI200 hovers just below resistance. The ASX200 is more constructive and may have a positive session if price can hold above yesterdays lows around 6657.
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ECONOMIC DATA OUT TODAY (AEDT)
CNY Trade Balance Data Tentative
EUR ECB Monetary Policy Meeting Accounts 11:30pm
USD Import Prices and Unemployment Claims 12:30am
USD Fed Chair Powell Speaks 4:30am
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SPI200 INTRADAY LEVELS TO WATCH
