The Morning Jumpstart Macro view

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

  • SPI200 (Jun) overnight futures up 36 pts to 6935
  • SP500 up 6.01 pts to 4079.95
  • NASDAQ Composite down 9.54 pts to 13688.84
  • Dow Jones up 16.02 pts to 33446.26
  • FTSE100 up 61.77 pts to 6885.32
  • DAX30 down 36.32 pts to 15176.36
  • GOLD futures US session (June) down $4.50 to $1737.20 an ounce
  • COPPER futures US session (Comex May) up $0.0015 to $4.0622 a pound
  • OIL futures US Session (Nymex May) down $0.25 to $59.52 a barrel
  • CRB Index up 0.47 pts to 186.31
  • AUDUSD trading at 0.7613
  • EURUSD trading at 1.1872
  • GBPUSD trading at 1.3737
  • USDJPY trading at 109.8600
  • USD Index US Session (ICE Mar) up 0.070 to 92.418

US indexes were well contained during the session and held in a tight range ahead of the FOMC meeting minutes. Data earlier showed that the US trade deficit hit record highs as economic activity rebounded faster than that of its global rivals. The wider deficit came from increased domestic demand thanks to massive stimulus from the White House and pent up savings flowing back into the economy. Exports were down which is in part due to cold weather in the US and supply chain issues. FOMC minutes showed that Fed Reserve officials remain wary of ongoing risks from the pandemic and are committed to supporting the economy until its recovery is more secure and the Fed hits its employment and inflation goals. They will be waiting until the data shows recovery and will not ease the bond buying program until then which may happen sooner rather than later according some analysts as more businesses open and more activities are considered safe to resume as the impact of vaccines are felt. Many think that the fed is discounting the current pace of the rebound and their ’emergency stance’ remains despite there being no ’emergency conditions’. The DOW closed up 0.05% while the broader SP500 ended up 0.15% and the Nasdaq closed down 0.07% for the session. In Europe, major Indexes were mixed with the German DAX gaving back some recent gains as price eased away from all time highs while the FTSE moved higher as it has lagged other major global indexes. The positive sentiment over vaccine rollouts and a weaker Pound helped UK shares outperform as the export heavy Index gained 0.9%.

The USD Index came under pressure into the start of the US session but then bounced being supported by some positive data on the economy. Price retested the 92.500 zone which may see some sellers step into the action to cap gains in the short term. Expect that the continued growth of the economy as it outperforms other major economies to bring in buyers into the Dollar. Expecting to see price supported today off 92.150 lows. The EURUSD added to the gains early as the USD was under pressure but buyers were quick to give up those gains and end the session where it started around 1.1870. If the USD has found some buyers, then expect to see the Euro run lower through 1.1860 to squeeze out buyers on a pullback off highs. The GBPUSD added to the previous sessions weakness as the Pound fell through 1.3780 lows. Sellers may be looking to extend on the move lower to test towards the 1.3675 level today. Price is extended but if the 1.3795 level holds, sellers will remain in control in the short term. The AUDUSD came under pressure right from the open of the Asian session and moved lower off 0.7660 resistance. Price action tested lows around 0.7606 that will need to hold to fend off a deeper corrective move lower. We expect to see a grind up off 0.7606 today but if the 0.7643 level holds then price may take out support for a bigger leg lower. The USDJPY was range bound with buyers defending lows and soaking up spikes down intraday. Price action held below 109.950 but we expect this level to be flushed today on a stop loss hunt from bulls.

SPOT GOLD was also well contained with neither bulls or bears taking control of the intraday action. Price did hold a minor lower level at 1742 but we do not see this as overly negative as price recently broke up and out of the downtrend from the 1960 highs. We would expect some overflow of negative sentiment from bears but will be watching to see if buyers soak up any spike lower and build a higher low for a bigger run up. Crude Oil again spiked lower ahead of US inventory data that came out more negative than expected. Sellers continued to apply the pressure after the data release but buyers were quick to step in to support lows and spike price back up. Longer term the range is holding so we expect to see price again drift back up above the 60 level. Copper edged lower but is showing signs of buyers soaking up selling pressure. The longer term move is contractive so we are expect to see buyers start to build a base for a move back to highs above 4.1550.

Cryptocurrencies came under pressure overnight and were sold off across the board. Bitcoin is currently trading at $56516.7 down 2.38% while Ethereum is at $2009.42 down 4.88% and Ripple gave back some of the recent gains and is trading at $0.93841 down 10.51%.

The ASX200 put in another bullish session yesterday to end up 42.1 points to 6928. All sectors ended with gains while the Gold sector again led shares higher being followed by Energy and IT stocks. The ASX200 is now set to test the all time high level at 7192 just over a year after the pandemic lows in March 2020. Rising stocks outnumbered declining ones by 699 to 602 and 410 ended unchanged.

The ASX200 is expected to open up 35/40 points as the SPI200 pushed up into new highs as buyers remain in control.

ECONOMIC DATA OUT TODAY (AEDT)

JPY Current Account 9:50am

EUR German Factory Orders 4pm

EUR PPI 7pm

EUR ECB Monetary Policy Meeting Accounts 9:30pm

USD Unemployment Claims 10:30pm

USD Fed Chair Powell Speaks 2am

SPI200 INTRADAY LEVELS TO WATCH