The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 9/04/21 (as at 8am AEST)

  • SPI200 (Jun) overnight futures up 2 pts to 6961
  • SP500 up 17.22 pts to 4097.17
  • NASDAQ Composite up 140.47 pts to 13829.31
  • Dow Jones up 57.31 pts to 33503.57
  • FTSE100 up 56.90 pts to 6942.22
  • DAX30 up 26.32 pts to 15202.68
  • GOLD futures US session (June) up $14.90 to $1756.50 an ounce
  • COPPER futures US session (Comex May) up $0.0008 to $4.0930 a pound
  • OIL futures US Session (Nymex May) down $0.17 to $59.60 a barrel
  • CRB Index up 1.06 pts to 187.37
  • AUDUSD trading at 0.7652
  • EURUSD trading at 1.1916
  • GBPUSD trading at 1.3735
  • USDJPY trading at 109.2800
  • USD Index US Session (ICE Mar) down 0.394 to 92.078

US indexes rallied from the open to end with gains in what was a generally lackluster session. The SP500 closed at a record high being boosted by a rally into tech as bond yields eased off highs and Bonds rallied. Price rises and a spike in inflation is expected to be temporary which is currently capping gains in bond yields. In statements from Fed Reserve officials, they have linked the recovery closely to the progress of the virus. They said that they will not ease stimulus and changes in Monetary policy until it is clear the pandemic is over. That said, new strands of the coronavirus are causing issues which the Fed sees as the biggest risk to the recovery. Data showed that weekly jobless claims unexpectedly rose last week and is at odds with recent employment data but adds to the Feds stance for continued support. The DOW closed up 0.17% while the broader SP500 ended up 0.42% and the Nasdaq closed up 1.03% for the session. In Europe, major Indexes saw the flow over from the US Fed Reserves stance on monetary policy as bulls expect a continued stimulus fueled global economic rebound. The DAX saw some initial weakness before recovering into the US close while the FTSE was bullish right from the open with buyers soaking up any intraday weakness. Expect that the FTSE, like the local ASX, is making a push for all time highs with the next stop being 7100.

The USD Index found some selling as expected off the 92.500 zone but could not find any support from buyers into previous lows thanks to the jobless data coming out worse than expected. Price is now being anchored down at 92.500 with sellers in control. Focus is now on stimulus and supply of the USD with inflation led safe haven buying on the sidelines so expecting to see some continuation lower in the near term. If price starts to push down through 92.000 then expect to see a move to test 91.710. The EURUSD did not find the weakness to clear out stops below 1.1860 as expected and the level was well defended. Price held and then later added to recent gains with a push up through highs. Buyers are extended so it may be a lot to ask for another leg higher without a clean out of some buyers first although resistance around 1.1940 and then 1.1984 may be on the cards. The GBPUSD held a few tests into the 1.3725 zone but price action looks very heavy and set to flush down through the level to trigger stops losses below. The Pound continues to find no love from bulls as it is weighed down by heavy debt levels triggering traders to move out of the Pound and into the safer USD. Price is struggling as Oil and other commodities hover at highs so we expect to see further pressure on the Pound in coming days which could see a break of the longer term uptrend. The AUDUSD is also looking a little shaky on the longer term daily charts with the key level for bulls being the 0.7570 level. Price is holding lower highs into the zone but is being held up by the continued risk on sentiment into shares. Buyers will need to push price back above the 0.7675 area for another shot at a move above 0.8000. The USDJPY came under increasing pressure as the YEN gained against the Dollar and moved the pair lower. It was all one way action from the open of the Asian session as sellers jumped into the action. Price has extended below 109.280 and found some buyers into the US close. If price consolidates around the current level, then expect some further pressure lower.

SPOT GOLD had a good run higher with buyers slowly gaining more confidence in the price action. Price is now testing the 1760 area which may trigger some profit taking from recent buyers. If the level holds then expect a pullback of the current leg up off 1679 where we will be watching for a higher low for a bigger leg higher as long as the USD plays ball and settles into a move down. Crude Oil is looking more constructive for the bulls as price continues to hold up of the lows. Recently price has spiked lower only to be bought up hard with buyers soaking up any push into lows. This suggests higher prices to come and expect to see a move up through 60 trigger a run up to the top side of the range around 61.70. Copper is also showing some good signs for the bulls and expectation for a weaker USD. The spike higher in the Asian session and move up through 4.0865 triggered a squeeze on sellers forcing some to close short positions. Price is holding below the 4.0975 area for now but we expect that bulls may get more love today and see a break up through the level.

Cryptocurrencies bounced back from the previous sessions selling but still remain in a contractive phase off recent highs. Bitcoin continues to hover below the 60K area while Ethereum may be set to hold a lower high. Bitcoin is currently trading at $57822.6 up 2.42% while Ethereum is at $2067.92 up 2.99% and Ripple is holding strong and is trading at $1.06978 up 13.70%.

The ASX200 rallied from the open yesterday with bulls remaining in control all session into the close. The Index ended the day just shy of 7000 up 70.8 points to 6998.8 and only around 200 points from new all time highs. Once again all sectors ended in the green with Metals and Mining, Materials and Resources leading the way. Rising stocks outnumbered declining ones by 804 to 527 and 389 ended unchanged.

The ASX200 is expected to open up 5 points and continue its run to the all time highs after the SPI200 showed further strength into the close of the overnight session.

ECONOMIC DATA OUT TODAY (AEDT)

AUD RBA Financial Stability Report 11:30am

CNY CPI and PPI 11:30am

EUR German Industrial Production and Trade Balance 4pm

CAD Employment Change and Unemployment Rate 10:30pm

USD PPI Data 10:30pm

SPI200 INTRADAY LEVELS TO WATCH