The Morning Jumpstart Macro view


  • SPI200 (Jun) overnight futures up 56 pts to 6766
  • SP500 down 12.54 pts to 3958.55
  • NASDAQ Composite down 14.25 pts to 13045.40
  • Dow Jones down 104.41 pts to 33066.96
  • FTSE100 up 35.95 pts to 6772.12
  • DAX30 up 190.89 pts to 15008.61
  • GOLD futures US session (April) down $28.60 to $1683.60 an ounce
  • COPPER futures US session (Comex May) down $0.0562 to $3.9783 a pound
  • OIL futures US Session (Nymex April) down $1.15 to $60.41 a barrel
  • CRB Index down 2.66 pts to 184.87
  • AUDUSD trading at 0.7593
  • EURUSD trading at 1.1717
  • GBPUSD trading at 1.3734
  • USDJPY trading at 110.3400
  • USD Index US Session (ICE Mar) up 0.344 to 93.300

US indexes ended weaker into the close as traders again rotated out of growth names and into values names into the end of the quarter. The early rise in bond yields again pressured tech related stocks and kept a lid on the Nasdaq. Banks stocks did well as traders assessed that there was little fallout from the Archegos Capital blowup and the fall of Bill Hwang’s hedge fund which did not flow over into the broader market. Consumer confidence data came out a lot stronger than expected highlighting expectations for a strong stimulus and vaccine led recovery. Analysts expect that the economy will experience its best performance this year in nearly four decades with consumers intending on going on a spending spree into homes, cars and household appliances over the next six months….leaving many traders keeping a close eye on yields. Biden is set to outline how he intends to pay for a $3 trillion to $4 trillion infrastructure plan later tonight. The DOW closed down 0.31% while the broader SP500 ended down 0.32% and the Nasdaq closed down 0.11% for the session. In Europe, major Indexes rallied with the DAX making a v-line for new highs around the open of the US session. The banking sector performed well as traders went bargain hunting a few days after being concerned for a major selloff in the sector on hedge fund issues. Rising yields helped to trigger bulls into action early sweeping up bank stocks, which is a change in sentiment when they previously rallied showing the fickleness of markets. Some of the enthusiasm can be attributed to end of quarter window dressing which will support prices into the end of the month.

The USD Index was all one way action to the upside as bulls continued to pressure price higher. The 93.000 level was broken with bulls looking to 94.000 as the next stop. The move shows the concern for higher inflation as the dollar finds buyers from a potential carry trade out of expected lower yielding currency pairs. The widening spread between US and German bond yields is adding pressure to the Euro which is being shown into the USD and not expected to end anytime soon as EU lockdowns persist. The EURUSD broke below 1.1760 as expected with stop losses being the fuel to start the march lower. Price also pushed straight through 1.1735 lows which now opens up a move to 1.1615. If this level can not hold, then then there is a bigger move lower on the horizon as longer term buyers are squeezed out of the action. The GBPUSD moved below the 1.3750 level at the hands of the USD pressure. Unlike the Euro, price found some support through the US session to rally into the US close. Bulls will see that the UK is in a better position than the EU with regards to vaccinations so are happy to buy into dips for short term pops hoping to get on the right side of the action for a USD selloff. In saying that, if 1.3745 level on the Pound holds then we expect to see a move towards 1.3680 lows and potentially beyond. The AUDUSD also moved lower but not before price flushed out the highs through 0.7655 to trap some buyers and then start the march lower. The Aussie is fairing better that the Euro as share markets hold up although may find pressure as commodity prices fall on the dollar rally. The AUD may see an extension of the move down today into 0.7570 lows. The USDJPY continued higher as long term US bond yields came under pressure early. The pair typically has a positive correlation with long-term US yields which can be seen with the selling in the US session as bond prices bounced back. Price is well and truly extended and over due for a correction to put some bulls back on the sidelines and expect the trigger to be a rally into bonds.

SPOT GOLD took another hit as price broke down below the 1700 level as mentioned prior. Price may find some buyers into the 1680 area but we expect that bulls are getting exhausted and safe haven buyers are tired from being chopped around. Price remains in a longer term downtrend which could easily persist if the USD continues to push higher. The saving grace may be the massive stimulus pressure on supply if inflation proves to be a non issue and dollar demand erodes sending the USD lower. Crude Oil initially flushed out the 62.00 level to trap some bulls before price headed lower into the US close. The rally in the dollar capped bullish sentiment but buyers were happy to support price into the 60.00 area. Longer term, demand should continue to support price and see buyers step into the action off dips which may be now above 60.00 if the level holds. Copper saw selling pressure from the open of the Asian session and into the US close. Price remains corrective and selling is not out of hand for now as many would expect that the dollar will take a turn lower soon. Demand also into Copper, like Oil, should provide some support as economies come out of the pandemic.

Cryptocurrencies edged higher to continue on from where they left off the previous session. Bitcoin is currently trading at $58694.4 up 2.53% while Ethereum is at $1841.74 up 1.88% and Ripple is at $0.56398 up 0.69%.

The ASX200 continued to struggle yesterday with initial gains from the open well and truly wiped off the board into the close. The index ended the session down 61.1 points to 6738.4 with all sectors bar Telecoms closing in the red. The worst performers were in the Gold, Metals and Mining and Resources sectors as the USD continued to edge higher during the Asian session. Falling stocks outnumbered advancing ones by 925 to 423 and 324 ended unchanged.

The ASX200 is expected to open up 60 points after the SPI200 again rallied in the overnight session. Expect that after yesterdays effort on the ASX, we will see some selling pressure again into the close and long weekend as traders take some risk off the table.


AUD Building Approvals and Private Sector Credit 11:30am

CNY Manufacturing PMI 12pm

GBP Final GDP and Current Account 5pm

EUR German Unemployment Change 6:55pm

USD ADP Non-farm Employment Change 11:15pm

CAD GDP 11:30pm

USD Pending Home Sales 1am

USD Crude Oil Inventories 1:30am