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OVERNIGHT MARKET SNAPSHOT FOR MONDAY 18/01/21
- SPI200 (Mar) overnight futures down 16 pts to 6625
- SP500 down 27.29 pts to 3768.25
- NASDAQ down 114.14 pts to 12,998.50
- Dow Jones down 177.26 pts to 30,814.26
- FTSE100 down 66.25 pts to 6735.71
- DAX30 down 200.97 pts to 13,787.73
- GOLD futures US session (Feb) down $23.70 to $1827.70 an ounce
- COPPER futures US session (Comex Mar) down $0.0652 to $3.5993 a pound
- OIL futures US Session (Nymex Feb) down $1.21 to $52.36 a barrel
- CRB Index down 1.52 pts to 175.25
- AUDUSD trading at 0.7703
- EURUSD trading at 1.2082
- GBPUSD trading at 1.3590
- USDJPY trading at 103.8600
- USD Index US Session (ICE Mar) up 0.563 to 90.778
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US indexes were hit on the open in a risk of tone Friday but did manage to make back some of the lost ground into the close. The risk off mood was across the board into US long weekend as bond yields fell and bonds rallied slightly along with the USD. Traders may have been positioned aggressively with regards to stimulus from the US which did not hit the lofty expectations so a reduction in risk exposure was on the cards as global coronvirus cases and a slow vaccine rollout comes into focus and weighs. Earnings in the US for JPMorgan, Citigroup and Wells Fargo were better than expected which may have triggered traders to look ahead to inflation as sentiment was hit on the open after weaker than expected retail sales data. The DOW closed down 0.57% while the broader SP500 ended down 0.72% and the Nasdaq closed down 0.87% for the session. In Europe, major Indexes took a hit on lockdown worries and the slow rollout of a vaccine to help stem the tide of coronavirus cases. News out of China that 28 million people are under new lockdowns raised concerns about demand from the major consumer of commodities and pressured linked sectors such as oil and gas.
The USD Index got a safe haven boost as rising covid cases continues to take a toll on the economy. Traders may be starting to realise the reality of a slow vaccine rollout and are happy to take some risk off the table. The dollar is stretched at current levels and hovering around previous highs. We may see buyers intent on cleaning out some sellers on a push to 91.00 but it may not be today with the US on a long weekend. Still the dollar remains in a long term downtrend and weighed down but a weaker than expected inflation outlook. The EURUSD fell over once the USD found a bid and moved higher. Sellers jumped into to push the Euro back below the 1.2130 area and continued the push down into the US close. Price is definitely in a corrective mood now with a lower high in play on the daily charts. Expect that sellers may take price down to the 1.1955/95 area before some buyers step in for support. Price is hovering at a potential support area around 1.2058. The GBPUSD took a hit on the dollar strength and as the global recovery came into question as covid cases increased in China. The key support area now for buyers to protect will be down around 1.3455 as a break of this zone may see a bigger corrective move lower towards the 1.3200 area. The AUDUSD was also knocked down in the risk off mood in a move that started in the Asian session Friday. The run lower did stall on an extension into the 0.7690 area which is support for now. We will be watching to see if this level can hold today into the European session and continue the daily trend up. The USDJPY weathered the USD weakness well as buyers provided support around 103.610. We will be on guard for selling pressure to resume today and for a break of 103.600 to trigger a squeeze lower and for the pair to play catchup. If the level holds then we may see a muted session.
SPOT GOLD saw the 1860 area hold and buyers give up the push higher as price fell under the weight of the USD rally. Gold did not see any safe haven action lift with the dollar and bonds which suggests a break of 1820 may be on the cards. For now, we may see a bid off the 1820 level and price edge higher today. Crude Oil was weighed down by global coronavirus cases and an expected hit to demand or in other words, slower recovery, as China comes into question on lockdowns. Price backed away from highs in the Asian session and continued lower through European and US trade. The move up from 47.50 has been one way action so some heat coming out of the rally is expected. Copper also moved lower off highs like Oil as we saw buyers unwind some positions. We will be watching to see if buyers can now reclaim the 3.6015 area and some bargain hunters to enter the action for support.
Cryptocurrencies had a relatively non eventful weekend as prices held around the US closing levels from Saturday. Bitcoin is currently trading around 36615.1 up 1.87% while Ethereum is at $1264.96 up 3.14% and Ripple is at $0.28038 up 0.54%.
The ASX200 started the session on the front foot to follow on from the previous days rally before sellers came in to lighten the load and push the index back down into the close. In the end the index ended up 0.1 points (flat) to 6715.4 with the IT sector performing the best while Consumer Discretionary and Utilities were the worse performers for the day. Rising stocks outnumbered declining ones by 768 to 587 and 329 ended unchanged.
The ASX200 is expected to open down 10 points after the US saw some weakness to close out the week into the long weekend.
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ECONOMIC DATA OUT TODAY (AEDT)
CNY GDP, Unemployment and Industrial Production 1pm
EUR Eurogroup Meetings All Day
USD Bank Holiday
GBP BOE Gov Bailey Speaks 12:30am
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SPI200 INTRADAY LEVELS TO WATCH
