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OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 23/03/21 (as at 8am AEDT)
- SPI200 (Jun) overnight futures down 20 pts to 6705
- SP500 up 27.49 pts to 3940.59
- NASDAQ Composite up 162.31 pts to 13377.54
- Dow Jones up 103.23 pts to 32,731.20
- FTSE100 up 17.39 pts to 6726.10
- DAX30 up 36.21 pts to 14657.21
- GOLD futures US session (April) down $3.30 to $1738.40 an ounce
- COPPER futures US session (Comex May) up $0.0295 to $4.1425 a pound
- OIL futures US Session (Nymex April) up $0.13 to $61.55 a barrelCRB Index up 0.28 pts to 189.06
- AUDUSD trading at 0.7745
- EURUSD trading at 1.1934
- GBPUSD trading at 1.3866
- USDJPY trading at 108.8400
- USD Index US Session (ICE Mar) down 0.113 to 91.812
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US indexes rallied to end in green as the Nasdaq bounced back from a recent selloff. Tech stocks garnered some attention overnight as bond yields eased giving some relief to the inflation narrative. Traders looked to pick up some bargains although the Nasdaq remains below the 13300 level and therefore under pressure and a target for another surge lower….it would not take much for prices to reverse in the coming days if bond yields edge higher. Bank stocks gave up some of their recent gains to end the session lower while materials, industrials and energy were also under some pressure. Traders are still trying to digest the bond markets and yields and what that means to shares prices and risk trades in the near term. There is no doubt that inflation is on the cards in the near future, the question is whether it will be enough and hang around long enough to see bonds being sold lower at a faster pace to put the squeeze on the Fed and interest rates. The DOW closed up 0.32% while the broader SP500 ended up 0.70% and the Nasdaq closed up 1.23% for the session. In Europe, major Indexes ended the session with gains thanks largely to a rally in automakers on the back of a buying frenzy into Volkswagon after they unveiled plans to challenge Tesla. Bank stocks came under pressure after a slump in the Turkish Lira after President Erdogan replaced a hawkish central bank governor with a critic of high interest rates. The situation is not as bad as 2018 as banks have cut their loan books to Turkey and even contemplated closing altogether.
The USD Index opened up near previous highs in the Asian session only to be sold lower all day into the US close. The dollar reacted to the rally into bonds but we expect that bigger swings will be the name of the game in the near term as traders try to work out the fate on the currency. Bond prices still look like they are under pressure which may mean further upside for the USD. If the dollar holds the 91.660 area then we expect to see a lift in price to push back above the 92.000 zone and potentially higher. The EURUSD rallied early off support around 1.1870 and kept the pressure on all session. Price looks to be well contained in the near term while the dollar finds its way and may continue its push higher to test resistance around 1.1985. The move will of course depend on the USD and any rally suggests that the dollar is testing lows. The GBPUSD was not as clear cut as the Euro and selling pressure was constant through the night even as the USD fell. Price rallies were capped around 1.3873 and buyers were happy to soak up the pressure on pushes into 1.3820 just above major support. The continued drag on the vaccine rollout is weighing on the Pound keeping price hovering just above support. If 1.3775 holds then we may see a spike lower into support where we expect that buyers will be waiting. If not, then a squeeze higher is on the cards and price to remain in the short term range. The AUDUSD edged its way higher to put some pressure on recent sellers off the 0.7700 zone. Price action higher is not very convincing so may see some selling pressure today. We expect that the key level for the day is around 0.7731 as if the level can hold, then expect another grind higher. If the level breaks, bears will be looking to a retest of the 0.7700 zone. The USDJPY was just a choppy mess as price held above 108.400. Bulls are convinced that there is more strength to come into the USD so are soaking up any selling pressure into the pair. If price pushes up through 108.870 then expect to see a squeeze on recent sellers and run up to 109.250 highs.
SPOT GOLD fought back from a minor selloff late in the Asian session to keep the bulls happy. Price continues to contract and hold both higher lows and lower highs as bulls and bears fight it out. Another push down to 1728 will see buyers squeezed out and a run lower. If buyers can hold and push through 1747, then a bigger leg higher is on the cards. Crude Oil was well contained and fended off another selloff. Price remains under pressure for now on demand concerns from Europe as covid problems persist. We expect to see the price grind higher although there is a real possibility of another sharp spike lower if the 60 zone can not hold as there is a lot of buyer fuel built up in the move higher from the 34.00 lows. Copper too advantage of the fall in the USD to move up into previous highs and resistance around 4.1500. Key resistance is a little higher which we expect to cap the buyers enthusiasm so we will be looking for a squeeze lower to clear out some recent buyers in the short term.
Cryptocurrencies came under pressure as Bitcoin broke down below the 56250 area to squeeze out some buyers. Bitcoin is currently trading at $54813.5 down 5.12% and Ethereum is at $1688.88 down 6.05% while Ripple is finding some interest and is at $0.54586 up 6.73%
The ASX200 started the new week on a positive note as price opened and rallied into the close. The index ended the day up 44.3 points to 6752.5 with the Energy and Utilities sectors doing the bulk of the heavy lifting. The gold sector also ended the day with gains while Metals and Mining and Materials ended in the red. Falling stocks outnumbered advancing ones by 725 to 632 and 334 ended unchanged.
The ASX200 is expected to open down 20 points after the SPI200 drifted lower to give up some gains from the days session.
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ECONOMIC DATA OUT TODAY (AEDT)
JPY CPI Data 4pm
GBP Unemployment Rate and Claimant Count 6pm
GBP MPC Member Haldane Speaks 7:40pm
GBP MPC Member Cunliffe Speaks 8:55pm
GBP BOE Gov Bailey Speaks 10:50pm
USD Current Account 11:30pm
USD Fed Chair Powell Testifies 1am
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SPI200 INTRADAY LEVELS TO WATCH
