The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 1/04/21 (as at 8am AEDT)

  • SPI200 (Jun) overnight futures up 19 pts to 6785
  • SP500 up 14.34 pts to 3972.89
  • NASDAQ Composite up 201.48 pts to 13246.87
  • Dow Jones down 85.41 pts to 32981.55
  • FTSE100 down 58.49 pts to 6713.63
  • DAX30 down 0.27 pts to 15008.34
  • GOLD futures US session (June) up $22.60 to $1708.60 an ounce
  • COPPER futures US session (Comex May) up $0.0050 to $3.9835 a pound
  • OIL futures US Session (Nymex May) down $1.39 to $59.16 a barrel
  • CRB Index up 0.09 pts to 184.96
  • AUDUSD trading at 0.7597
  • EURUSD trading at 1.1729
  • GBPUSD trading at 1.3782
  • USDJPY trading at 110.7400
  • USD Index US Session (ICE Mar) down 0.106 to 93.215

US indexes were mixed with the DOW ending lower while bargain hunting saw the Nasdaq end with gains. Data out on private payrolls point to increased hiring and an improving labour market as stimulus and vaccinations support business. As the quarter came to an end, traders managed to ride out some ups and downs from a trading frenzy into Gamestop to a US Hedge Fund going bust but the major indexes still ended with strong gains. Traders moved back into growth related stocks which have lagged the last few sessions. The move may highlight some uncertainty into the market as traders swing from value to growth and back again but it is more a function of the end of quarter rebalancing to lock in a positive quarter. US bond yields continue to pressure to the upside as they rallied in the US session. Expect to see some action in the shortened session Friday night if payroll data comes out better than expected. Many expect some pent up demand to hit the economy as people get back to work out of the pandemic so a stronger jobs number, in the long run, points to increasing inflationary pressure. The DOW closed down 0.26% while the broader SP500 ended up 0.36% and the Nasdaq closed up 1.54% for the session. In Europe, major Indexes were flat with the DAX failing to kick on into new all time highs again. The FTSE edged lower as the Deliveroo IPO fell flat on its face ending down 30% and pressured the overall sentiment of the market. The Bunds (German Bonds) hover around lows and look set for another push lower pointing to inflation.

The USD Index finally saw some heat come out of the action on the open for European trade. Price kicked higher in the Asian session only to turn and squeeze out some buyers on a move lower. The action is contractive meaning price is in a pullback mode and searching for support before another leg higher. Bulls were happy to take some risk off the table as they awaited news from Biden on how he plans to pay for the massive infrastructure package in the pipeline. For now we expect to see the USD hold up off the 93.000 level into US payrolls Friday. The EURUSD saw some choppy price action but continues to reject highs as sellers pressure buyers lower. Price rallied off the lows on USD weakness to test the 1.1760 area before moving back down into the US close. If price now holds a lower high below 1.1760 then expect to see another push lower. The GBPUSD is showing more positive signs than the Euro as price rallied up off the 1.3750 level putting the squeeze on sellers from the previous session. Price may make a push up to 1.3840 highs bit we do expect to see sellers move back into the action after a flush of the levels to trap some buyers. If price fails to move up to the level then expect another push back to the 1.3750 zone. Traders may be in a holding pattern until the US payroll data is released. The AUDUSD was grinding higher through Asian and US trade only to be knocked back down to where it started into the US close. If bears break price down below 0.7580 then expect to see further selling pressure come into the action. The USDJPY came under pressure as the USD swung between gains and losses for the day. Like the USD, the price action suggests a pullback off the highs to clear out some late buyers but is not pointing to weakness after a retest of the 110.400 level held. If this level continues to hold today then expect some buyers to build confidence to jump back into the action for another leg higher.

SPOT GOLD made back some of the previous losses to lift up off the 1680 area and squeeze out sellers on a strong spike higher. Longer term the pressure remains down but there is expectation that the USD is getting stretched and stimulus will eventually weigh on price and in turn support Gold. With the current trend down, we still expect to see further pressure on the 1680 level and potentially a break of the zone for a push to take out some stop losses before building for a longer term move up. Crude Oil found further selling pressure off the 61.10 area to turn for a move down through 60.00 and clean out some stop losses. Longer term price is being contained between 57.20 support and 62.00 resistance as bulls and bears fight it out over the supply/demand outlook. We expect that the 57.20 level will hold longer term but not without some volatility. For now, expect price to recover some of the losses and move back to test the 60.00 area. Copper was more contained than oil as price moved up off the lows in Asian and European trade before running into some sellers looking intent on holding a lower high at 4.0185. Sellers are being well contained on the move down off major highs which suggests continued interest from bulls. We expect to see an over flow of sellers today but for the action to be contained above 3.9650.

Cryptocurrencies had some mixed performances overnight with Ethereum and EOS rocketing higher while Bitcoin and Ripple were both well contained holding resistance. Bitcoin is currently trading at $58892.6 up 0.42% while Ethereum is at $1931.25 up 4.97% and Ripple is at $0.55990 down 0.46%. PayPal Holdings said Tuesday it launched a ‘Checkout with Crypto’ service, which will allow US users to use their cryptocurrency holdings to pay online merchants worldwide.

The ASX200 continued reversed the previous few sessions fortunes yesterday with a rally from the open to end the quarter on a positive note. Price once again failed at the 6860 area and gave back some of the gains into the close to end up 52.3 points to 6790.7. The Gold sector came under pressure after gold fell below the 1700 mark the previous night while Industrials and Consumer Staples were the best performers for the day. Rising stocks outnumbered declining ones by 710 to 623 and 356 ended unchanged.

The ASX200 is expected to open up 20 points after the SPI200 edged up off support overnight.

ECONOMIC DATA OUT TODAY (AEDT)

JPY Tankan Manufacturing Index 10:50am

AUD Retail Sales and Trade Balance 11:30am

CNY Caixin Manufacturing PMI 12:45pm

EUR German Retail Sales 5pm

EUR German Final Manufacturing PMI 6:55pm

GBP Final Manufacturing PMI 7:30pm

All OPEC-JMMC Meetings All Day

USD Unemployment Claims 11:30am

USD ISM Manufacturing PMI 1am

SPI200 INTRADAY LEVELS TO WATCH