The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR MONDAY 12/04/21

  • SPI200 (Jun) overnight futures up 6 pts to 6980
  • SP500 up 31.63 pts to 4128.80
  • NASDAQ Composite up 70.88 pts to 13900.19
  • Dow Jones up 297.03 pts to 33800.60
  • FTSE100 down 26.47 pts to 6915.75
  • DAX30 up 31.48 pts to 15234.16
  • GOLD futures US session (June) down $14.10 to $1744.10 an ounce
  • COPPER futures US session (Comex May) up $0.0475 to $4.0475 a pound
  • OIL futures US Session (Nymex May) down $0.28 to $59.32 a barrel
  • CRB Index down 0.63 pts to 186.74
  • AUDUSD trading at 0.7623
  • EURUSD trading at 1.1900
  • GBPUSD trading at 1.3707
  • USDJPY trading at 109.6700
  • USD Index US Session (ICE Mar) up 0.111 to 92.180

US indexes ended the week on a positive note with the DOW and the broader SP500 ramping up into new all time highs. Investors are showing they are no longer too concerned by coming inflation as they believe Powells and the Feds words that a rate rise is a long way off. After Powells assurances on Thursday that the central bank is far more concerned about the recent uptick in infections than inflationary pressures, traders are happy to be risk on ahead of coming first quarter earnings. Producer Price (PPI) Data showed a solid jump and pushed bond yields higher but rather than see it as inflationary, traders saw this as a good sign that the economic recovery is on solid ground. The DOW closed up 0.89% while the broader SP500 ended up 0.77% and the Nasdaq closed up 0.51% for the session. In Europe, major Indexes were mixed with the DAX ending the session higher while the FTSE moved lower into the close. Traders were generally subdued into the weekend but have been positive this week with sentiment being underpinned by the US and expectations for growth along with lessening concerns for inflation.

The USD Index crept higher in the Asian and European sessions but then gave up a lot of the gains in US trade to end only slightly higher on the day. The trend down remains held around 92.500 with less concern for inflation as the dollar fell after the PPI number. CPI data is out tomorrow night ahead of the US open which may bring some volatility into currency markets via the USD and will give a better picture around US inflation expectations. Expecting to see the trend lower continued today with buyers being held down below the 92.300 area potentially targeting a slow grind to 92.000. The EURUSD was initially heading south before the US PPI release and dollar fall which helped support the Euro. Price is holding in a loose range at the moment between 1.1865 and 1.1920 and we see a move up from current levels towards the top end of the range if the 1.1888 lows hold from todays open. The GBPUSD was hit as expected below the 1.3725 area to trigger the stops below. Price remained under pressure into the US close so we expect to see the same theme today with bears targeting another push to 1.3670 lows as long as the 1.3730 level can hold. The AUDUSD dropped like a stone Friday after the RBAs warning on excessive lending risks and mixed inflationary data from China. Price recovered some of the losses in European trade although continues to look heavy below 0.7630. Longer term price has been holding up above the 0.7565 area but may look to test down towards the zone today if 0.7630 holds. The USDJPY reversed all of the previous sessions losses with a spike back up into the 109.940 area before settling lower into the US close after the US PPI number was released. Bulls will be watching to see if the 109.580 level can hold today for another push higher.

SPOT GOLD continued the move down off 1760 with a spike below 1735 as the USD lifted. The good sign for bulls is that the 1735 level was quickly rejected and buyers pushed price back up into the US close. We expect to see some more selling pressure come in today with a bigger correction lower on the cards before bulls regain confidence for a push higher longer term. Crude Oil was well contained above the 59.10 level which adds to our expectation that price is looking more constructive for the bulls. If the level holds today then we expect a run up through 60.00 soon. Expect that traders remain focused on the global economic recovery which we expect to see offset downward pressure from OPECs decision to increase supplies by 2 million barrels per day between May and July. Copper had a mixed session along with the swings into the USD. Price ended the US session down towards lows around 4.0380 which we expect to hold today. The short term pressure is down but we expect that support will hold especially if the USD continues lower ahead of CPI data release Tuesday.

Cryptocurrencies were ramped higher not long after the US session close. Bitcoin pushed up through 61K before fading lower but the price action looks constructive for another leg higher which would be supportive for cryptos across the board. Bitcoin is currently trading at $59970.5 up 1.60% while Ethereum is at $2140.82 up 1.44% and Ripple is at $1.36706 up 4.72%.

The ASX200 was largely range bound for the last trading day of the week and ended the session down 3.6 points to 6995.2. Neither bulls nor bears could take control and outweigh the other as the spread across the sectors was mixed with winners and losers. The Gold sector was the biggest gainer for the day while Consumer Staples and Energy felt the most heat. Rising stocks outnumbered declining ones by 836 to 503 and 374 ended unchanged.

The ASX200 is expected to open flat to up 5 points after the SPI200 rallied back in the US session from an earlier selloff in European trade to end around where it started. The move seems like a good clean out of traders and squeeze on some buyers before price may build for a move higher.

ECONOMIC DATA OUT TODAY (AEDT)

USD Fed Chair Powell Speaks 9am

EUR Retail Sales 7pm

CAD BOC Business Outlook Survey 12:30am

USD Federal Budget Balance 4am

SPI200 INTRADAY LEVELS TO WATCH