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OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 12/03/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures up 37 pts to 6756
- SP500 up 38.81 pts to 3937.62
- NASDAQ Composite up 329.84 pts to 13398.67
- Dow Jones up 188.57 pts to 32,485.59
- FTSE100 up 11.36 pts to 6736.96
- DAX30 up 29.14 pts to 14569.39
- GOLD futures US session (April) up $0.80 to $1722.60 an ounce
- COPPER futures US session (Comex May) up $0.1132 to $4.1457 a pound
- OIL futures US Session (Nymex April) up $1.68 to $66.12 a barrel
- CRB Index up 2.79 pts to 194.54
- AUDUSD trading at 0.7792
- EURUSD trading at 1.1989
- GBPUSD trading at 1.3993
- USDJPY trading at 108.4500
- USD Index US Session (ICE Mar) down 0.436 to 91.392
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US indexes went from strength to strength with the SP500 trading into new all time highs along with the DOW while tech was again a target for some bargain hunting. Traders were supported by data showing that the number of Americans filing for jobless benefits dropped to a four-month low last week with people getting back to work as more segments of the economy reopen. Biden signed into law the new stimulus bill as data shows that US households ended 2020 with a record $130.2 trillion in wealth. Rising equity markets and real estate values, being supported by low interest rates, added a combined $5.8 trillion while cash rose by a combined $642.7 billion in the fourth quarter. Debt was also paid down by $118.3 billion which puts the consumer in good stead to support growth and accelerate inflation. The numbers do not take into account the disparities between low and high income earners and ‘out of work’ Americans but also does not show the new round of relief coming which will only add to the numbers. The new stimulus is targeted at getting people back to work which will bring down unemployment numbers and keep the Fed happy. The question is how all the money floating around will affect inflation and will it go into the stock market to keep the rally going. The DOW closed up 0.58% while the broader SP500 ended up 1.00% and the Nasdaq closed up 2.52% for the session. In Europe, major Indexes were tentative after the recent run higher but did manage to end the session with gains. Traders were supported by comments from the ECB to ease concerns about inflation. The ECB said that they were ready to accelerate the money printing to keep a lid on the borrowing costs to support the recovery. The message from the ECB was stronger than expected and supports their commitment to action if needed to support lending. Banks came under pressure while tech, mining and travel were the gainers.
The USD Index continued to edge lower but does not look to be in any hurry. The inflationary concerns have eased and stimulus is keeping a lid on the bulls for now but a lot of the news has previously been factored in to price. The Central bank buying of US treasuries, therefore the dollar, has dried up leaving the US Fed reserve to take up the slack. Recent data showed bond auctions drew decent demand which helps the case for a stronger dollar over time. For now, the dollar is grinding lower in search of support which could come in around current levels or lower around 90.800. The EURUSD continued to gain on the back of the struggling USD and was also supported by the ECB comments regarding ramping up the printing presses. Price did not kick off hard after the comments as the EU is still weighed down by covid issues. For now minor support for the leg up is around 1.1930 and near term target around 1.2017 then 1.2087. The GBPUSD chopped its way higher to the 1.4000 zone so we will be watching the area to see if sellers get more active. The way price moved up was strange and seemed controlled suggesting there were buying programs at play. Price is extended but may still want to kick higher as the UK is on a better road to recovery than the EU as vaccines roll out. The AUDUSD continued to be supported by the risk on sentiment into the market. Price held a higher low that may come into play today around 0.7739. If the level holds then expect the move up to continue to test recent highs around 0.7839. The USDJPY held the 108.33 level that we were watching from yesterday even as the USD edged lower. The level may come under fire today as lower highs into the zone hold. The key now to watch for is a clean break of the level or a stop loss run and pop back above. One will hint at further negativity into the USD while the other will hint at support.
SPOT GOLD gave up earlier gains from the Asian session to move lower in European trade against the flow of the USD selling. This is not a great sign for buyers and shows the unconvinced nature of the market and recent run higher. Bulls will need to hold 1720 to leave the door open for another leg higher. If they can not hold the level, and a lower high is confirmed, then watch for an unwind of buyers for a move back down to support. Crude Oil gained as markets continue to be risk on and focused on the recovery from the pandemic. Oil traders are expecting increased demand and being supported by extended production cuts. Copper managed to break higher and drag in more buyers to hold a minor higher low around 4.0800. As expected, buyers were quick to move into copper on the weakness into the USD so we expect that the move will continue as long as the dollar remains heavy. If price can get through 4.1715 cleanly, then an attack on the highs around 4.3750 is on the cards.
Cryptocurrencies stepped higher after a flush lower in the Asian session. Buyers were happy to support major pairs with Bitcoin and Ethereum leading the charge while EOS is set for a run higher. Bitcoin is currently trading at $57820.3 up 2.72% while Ethereum is at $1828.54 up 1.32% and Ripple is at $0.45461 down 1.44%.
The ASX200 was a whipsaw yesterday as price was again hit in early trade to go into negative territory before a surprise rally ramped price back up into the close. The Index ended the day down 0.2 points to 6713.9 with the Gold sector being the best performer while IT bore the brunt of the selling. Rising stocks outnumbered declining ones by 708 to 563 and 356 ended unchanged. Expect to see a quieter gold sector while IT may find some bargain hunting.
The ASX200 is expected to open up 35 points as the SPI200 fought back from the day sessions selloff as European and US indexes continued higher.
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ECONOMIC DATA OUT TODAY (AEDT)
EUR German Final CPI 6pm
GBP GDP, Industrial Production and Manufacturing Production 6pm
EUR Industrial Production 9pm
CAD Employment Change and Unemployment Rate 12:30am
USD PPI Data 12:30am
USD Prelim Consumer Sentiment 2am
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SPI200 INTRADAY LEVELS TO WATCH
