The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR MONDAY 29/03/21

  • SPI200 (Jun) overnight futures up 49 pts to 6848
  • SP500 up 65.02 pts to 3974.54
  • NASDAQ Composite up 161.04 pts to 13138.72
  • Dow Jones up 453.40 pts to 33072.88
  • FTSE100 up 65.76 pts to 6740.59
  • DAX30 up 127.58 pts to 14748.94
  • GOLD futures US session (April) up $6.50 to $1731.60 an ounce
  • COPPER futures US session (Comex May) up $0.1005 to $4.0785 a pound
  • OIL futures US Session (Nymex April) up $2.41 to $60.97 a barrel
  • CRB Index up 3.38 pts to 187.73
  • AUDUSD trading at 0.7637
  • EURUSD trading at 1.1794
  • GBPUSD trading at 1.3789
  • USDJPY trading at 109.6400
  • USD Index US Session (ICE Mar) down 0.108 to 92.718

US indexes saw a late surge from the bulls to end well in the green with the DOW rallying close to 300 points in the last hour of trade. Once again the ‘buy the dip’ mentality proved correct as the broader market SP500 ended the week just below all time highs after sellers recently pushed prices lower. Safe havens such as the USD were flat while Bond yields rallied although any concern over inflation and higher interest rates is being brushed aside for now. Traders shrugged off data that showed consumer spending fell for the previous month and continued to go risk on into shares as the negative data was attributed to the recent cold snap in the US which put a hold on stimulus cheque spending. The Suez Canal issue persists and could do so for a few more weeks to put a back log on imports and exports through the key shipping lane. The DOW closed up 1.39% while the broader SP500 ended up 1.66% and the Nasdaq closed up 1.24% for the session. In Europe, major Indexes ended the week on a strong note finishing well into the green. Investors shrugged off concerns for a third wave of the virus and dived into miners and oil stocks. Traders will also have it in the back of their minds that any negative move lower will be met with continued abundant fiscal and monetary support. The general feeling seems to be that it is time to be long as economies open up and inflation is set to spike.

The USD Index traded sideways for the session as bulls continue to focus on the out performance for the US economy compared to others such as the EU. This was evident after the data release showing a major part of the economy; ie consumer spending; slowed for the previous month. The dollars price action looks to be simply correcting the recent run higher which suggests that there is more to come if buyers are happy to hold long positions. Buyers are being supported by Bidens promise to double vaccinations and as US jobless claims recently fell. The EURUSD is really on the opposite side of the coin with the pace of vaccinations an issue and increasing covid cases both pressuring the currency lower. One saving grace was that business morale in the EUs biggest economy Germany, hit its highest level in almost two years as rising demand for manufactured goods kept factories ticking along nicely. Expect further pressure today if the USD finds a bid and the Euro holds below 1.1817. The GBPUSD took the opportunity to continue to pressure higher as the USD went sideways. Price action is now retesting a key area around the 1.3800 zone which will need to break cleanly if buyers are going to continue the march higher. If not then expect to see sellers kick into action off a lower high. The AUDUSD also moved up and saw a risk on trade back into the pair to end Friday on session highs thanks largely to the final hour of power into the US share market. Price is being held up around 0.7614 and may be looking up to 0.7700 if the dollar can not kick on higher and shares rally. The USDJPY rocketed up through the top side of the range around 109.300 as there was no stopping the bulls. The way price broke up and out of the recent period of consolidation suggests that the next stop is up at 112.220 but price may need to see some heat come out of the action before bulls settle in for the ride.

SPOT GOLD is showing some good signs for bulls and holding up from the recent selling pressure. Bulls will need to make another push up to 1745 in order to put uncertainty in the minds of bears and start to build for a new leg higher. Price needs to hold up above 1722 in coming sessions otherwise we expect to see another run lower towards 1680. Crude Oil once again managed to find buyers around 57.30 and lift up off the zone. Bulls were supported by the continued issues with the Suez Canal blockage to put the squeeze on recent sellers. Price did move back into previous highs at 61.30 before edging lower into the close. We expect to see a pullback and will be watching to see if buyers step in earlier to soak up the selling pressure at a higher level to engineer a move up through 62.00. Copper was all one way action higher as the potential for increasing demand continued, as the global economy continues to open up, and fueled buyers back into the action with little resistance from the USD. Still the recent momentum is down and longer term price action remains corrective so bulls will need to put in more groundwork before we are convinced that price is making a charge for new highs through 4.3775.

Cryptocurrencies were relatively quiet over the weekend and managed to hold onto the gains made into the end of the week. Bitcoin is currently trading at $55025.2 down 1.53% while Ethereum is at $1672.16 down 2.64% and Ripple is at $0.54302 down 2.17%.

The ASX200 lifted through the 6800 area on the open and managed to hold the gains into the close. The index ended the session up 33.6 points to 6824.2 as bulls gear up for another push higher potentially to new all time highs. The Metals and Mining, Materials and Resource sectors did the bulk of the heavy lifting as bulls looks to pick up some potential bargains in anticipation of a weaker USD and stronger commodity prices. Rising stocks outnumbered declining ones by 773 to 535 and 353 ended unchanged.

The ASX200 is expected to open up 45/50 points after the US closed higher into the weekend and lifted the SPI200 to close at session highs.

ECONOMIC DATA OUT TODAY (AEDT)

GBP Mortgage Approvals 7:30pm

USD FOMC Member Waller Speaks 2am

SPI200 INTRADAY LEVELS TO WATCH