The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 25/03/21 (as at 8am AEDT)

  • SPI200 (Jun) overnight futures down 12 pts to 6737
  • SP500 down 21.38 pts to 3889.14
  • NASDAQ Composite down 265.81 pts to 12961.89
  • Dow Jones down 3.09 pts to 32,420.06
  • FTSE100 up 13.70 pts to 6712.89
  • DAX30 down 51.63 pts to 14610.39
  • GOLD futures US session (April) up $8.10 to $1733.20 an ounce
  • COPPER futures US session (Comex May) down $0.0520 to $4.0275 a pound
  • OIL futures US Session (Nymex April) up $3.08 to $60.84 a barrel
  • CRB Index up 3.41 pts to 187.91
  • AUDUSD trading at 0.7587
  • EURUSD trading at 1.1813
  • GBPUSD trading at 1.3688
  • USDJPY trading at 108.7300
  • USD Index US Session (ICE Mar) up 0.266 to 92.613

US indexes saw a late surge lower again to end with losses as the DOW gave up early gains. The general enthusiasm waned as a selloff in tech stocks weighed on the broader market and added to the previous sessions losses. Traders set aside any optimism about the economic recovery by the Federal Reserve and focused on rates and potentially higher taxes. Growth is set to kick into high gear later in the year according to the Fed which traders see as inflationary and have potentially factored into price. Banks and Energy shares did well while traders took some risk off the table into beloved tech shares. Elon musk said the company’s electric vehicles can now be bought using bitcoin which led to a surge in Crypto prices early in the European session before an about face to give up the gains. The DOW closed down 0.01% while the broader SP500 ended down 0.55% and the Nasdaq closed down 2.01% for the session. In Europe, major Indexes were muted as new lockdowns and coronavirus concerns outweighed a surprise return to economic growth for March. Consumer confidence data came in positive which was a big positive considering the difficulties the EU has faced with tighter restrictions across the bloc and ongoing difficulties with the AstraZeneca vaccine.

The USD Index rallied from the start of the Asian session and any pullbacks were supported by the bulls. Price was supported by a recovery in bond yields from a one week low and as Bonds pushed lower early. Bond prices did recover some of the losses although the Dollar held on to the gains which points to further pressure expected into yields. The USD is extended at current levels and may need some heat to come out of the action before another leg up. The EURUSD pushed lower into new lows under the weight of the rising dollar. Any positive sentiment from a faster than expected recovery into the EU has come out of the currency as lockdowns persist. The positive data out overnight in the EU will be supportive to some extent but traders still see value in the USD at the expense of the Euro with inflationary concerns in the US helping support the carry trade. Price is holding a lower high at 1.1840 which will continue to pressure the action down if it holds today. The GBPUSD headed lower as expected as the 1.3800 area held and sellers jumped into the action. Price is extended into lows around 1.3673 but is holding a lower high at 1.3733. If the lower high holds, the Pound may be looking down to 1.3610 for support. The AUDUSD could not find any buying pressure yesterday and broke down below the 0.7620 level in Asian trade as risk appetite took a hit. The level was later tested a few times and held to see a late selloff back down to session lows into the close. The move suggests that we will see lower prices today as sellers look for liquidity lower. We expect to see the move to extend lower into the 0.7560 zone today. The USDJPY held up off the 108.350 area to move higher off major support. Price held a higher low which suggests that we will see further range bound action in the near term.

SPOT GOLD continues to put up a fight as share markets come under pressure. Price is being held down by the rally into the USD but there is a minor safe haven bid holding up price and soaking up selling pressure on spikes lower. We expect to see a run higher if the dollar takes a turn lower and a break up through 1740 in gold. If the pressure higher into the USD continues then expect another push lower in gold. Crude Oil fought back from the previous sessions selloff as buyers came out to play. Bulls were helped by the fact that one of the worlds largest shipping containers has ran aground in the the Suez Canal a major and vital shipping lane. Prices found support off the 57.30 level and pushed back up to the 61.50 lower high. Expect that once the ship is cleared out of the canal we will see some further downside pressure…the question is whether the 57.30 area can provide support again. Copper was a yo-yo overnight as price initially rallied hard off lows and then gave up all the gains to end where it started. Price felt the pressure from the strength into the USD and held a retest of the 4.1000 area. Expect that there will be more selling pressure in the medium term and a push lower to the 3.8750 area.

Cryptocurrencies were hit in the US session to give back gains made in European trade. Bitcoin and Ethereum ledthe charge with Ethereum taking out some key support. Expecting some more weakness once the Asian session gets underway. Bitcoin is currently trading at $53844.4 down 0.91% while Ethereum is at $1612.10 down 3.58% and Ripple is at $0.52413 down 3.58%.

The ASX200 managed to put together a solid day yesterday considering the US was down the previous night…seems we may lead the US for a change. The index ended the day up 33.4 points to 6778.8 with Consumer Staples, Consumer Discretionary and Gold leading the way while Energy was the biggest drag on the action. Falling stocks outnumbered advancing ones by 786 to 524 and 378 ended unchanged. Gold in Aussie dollar terms did well and is on a run which may support the sector along with a weaker AUD.

The ASX200 is expected to open down 10 points as the SPI200 again faded into the US close.

ECONOMIC DATA OUT TODAY (AEDT)

JPY BOJ Gov Kuroda Speaks Tentative

CHF SNB Monetary Policy Assessment and Policy Rate 7:30pm

CAD BOC Gov Macklem Speaks 8:30pm

EUR ECB President Lagarde Speaks 8:30pm

EUR German Buba President Weidmann Speaks 8:30pm

GBP BOE Gov Bailey Speaks 8:30pm

USD Final GDP and Unemployment Claims 11:30pm

SPI200 INTRADAY LEVELS TO WATCH