The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 13/04/21 (as at 8:15am AEST)

  • SPI200 (Jun) overnight futures up 15 pts to 6964
  • SP500 down 0.81 pts to 4127.99
  • NASDAQ Composite down 50.19 pts to 13850.00
  • Dow Jones down 55.20 pts to 33745.40
  • FTSE100 down 26.63 pts to 6889.12
  • DAX30 down 19.16 pts to 15215.00
  • GOLD futures US session (June) up $0.20 to $1732.90 an ounce
  • COPPER futures US session (Comex May) down $0.0020 to $4.0175 a pound
  • OIL futures US Session (Nymex May) up $0.02 to $59.72 a barrel
  • CRB Index down 0.33 pts to 186.41
  • AUDUSD trading at 0.7623
  • EURUSD trading at 1.1913
  • GBPUSD trading at 1.3746
  • USDJPY trading at 109.3800
  • USD Index US Session (ICE Mar) down 0.070 to 92.090

US indexes went into a holding pattern and were range bound for the session to edge lower into the close. Traders were happy to remain on the sidelines ahead of tonights CPI data release for a read on coming inflation. Traders are also looking forward to earnings for a gauge of corporate America and guidance for what lays ahead which kicks off Wednesday. Earnings are expected to jumped 25% in the quarter from a year ago which will be the biggest quarterly gain since 2018 on the back of the Trump tax cuts. Many of Trumps Wall Street friendly rules have been reversed by Bidens government which will throw companies compliance into disarray and could cap rallies in the near term but is expected to protect consumers. The US budget deficit ballooned to a record $1.706 Trillion from $743 Billion a year earlier as payments to Americans were handed out. The March 2021 deficit is the third highest in US history. The DOW closed down 0.16% while the broader SP500 ended down 0.02% and the Nasdaq closed down 0.36% for the session. In Europe, major Indexes slipped lower from previous highs as traders are happy to take some risk off the table ahead of the corporate earnings season. European earnings will kick into gear later in April with analysts expecting a 47.4% jump in first-quarter earnings for STOXX 600 companies. Tech, travel and Commodity stocks led the declines overnight as bulls held on the sidelines.

The USD Index found a minor safe haven bid in the Asian session before moving down to the 92.000 zone as expected in the European session. Price then held the lows as many traders are awaiting the coming CPI number tonight. In the short term, price may be finding some support into major lows around 91.500 although the inflationary data could change that quickly. Many expect to see upside pressure into the USD on the back of a stronger than expected number. For now price action is being held down at 91.320 so a clear break of the level will put the squeeze on sellers for a move up. The EURUSD continued to hold in a loose range between 1.1865 and 1.1920 with price hovering just below resistance at 1.1920. Expecting to see bulls trigger some stops above the level on a flush higher before settling back within the range ahead of the CPI release tonight prior to the US open. The GBPUSD did continue the move lower and push into the 1.3670 area as expected before bulls ramped price higher at the open for European trade. Buyers were supported by a stop loss hunt on sellers as bulls celebrated the latest phase of the British government’s economic reopening plan. Bulls are now set for another leg higher today if the 1.3730 level can hold and price pushes up through 1.3760. The AUDUSD again pushed lower in Asian trade although buyers stepped in to support price around 0.7595. Price action managed to regain the lost ground although still lacks conviction in either direction. Expect that bulls may take a run at the 0.7660 area for a squeeze on recent sellers but we would expect that the action will be capped up at the level. The USDJPY again moved down to test lows around 109.250 as price was weighed down by the USD selling. The key level for today is around 109.455 which, if it holds, could see some selling pressure down through 109.200 to continue the move lower. If it breaks, expect to see more range bound action ahead of US CPI.

SPOT GOLD price moved down through the 1735 zone as sellers continued the squeeze on recent buyers. We still expect to see a deeper correction lower before bulls regain more confidence an are happy to support price for a decent swing higher. Tonight may be the spike in volatility that bulls need but that will depend on the USD movement and reaction to the data release. Crude Oil was a choppy session for both bulls and bears as price originally flushed stops below the 59.10 level before a ramp up through 60.50 into previous highs. Sellers were then quick to step in and push price back down and clean out buyers from the ramp up. Price action is being held between 62 and 58 as traders try to assess the coming move. From here, we would expect that price will be supported as it has the benefit of OPEC intervention if needed and the global economy is expected to suck in more of the commodity in the near term as it opens up. Copper took a hit early in Asian trade as price move lower to trigger stop losses below the 4.0400 level on the back of the USD move up at the time. Buyers did manage to regain a lot of the lost ground although the action is now looking heavy. Bulls will need to hold 4.0070 for a move up through 4.0300….if not then expect to see a grind back down to the lows.

Cryptocurrencies generally were positive early with a spike in Bitcoin and Ethereum in the Asian session. Prices then gave up the gains to end around where they started with some, such as EOS, giving up a little more. Ripple is holding up well which is a good sign for current and new buyers alike. Bitcoin is currently trading at $60032.6 down 0.09% while Ethereum is at $2149.91 up 0.21% and Ripple is at $1.38732 up 0.99%.

The ASX200 followed on from where it left off Friday with a relatively range bound session which crept lower into the close. In the end the index was down 21.2 points to 6974 with the Gold sector being the biggest drag on the bulls while Metals and Mining and Resources were not far behind. The ASX followed Asian markets into the red with falling stocks outnumbered advancing ones by 840 to 523 and 367 ended unchanged.

The ASX200 is expected to open up 10 points after SPI200 buyers again soaked up dips into support around 6933.

ECONOMIC DATA OUT TODAY (AEDT)

AUD NAB Business Confidence 11:30am

CNY Trade Balance Data Tentative

GBP Goods Trade Balance and Industrial/Manufacturing Production 4pm

EUR ZEW Economic Sentiment 7pm

USD CPI Data 10:30pm

USD FOMC Member Bostic Speaks 5:15am

SPI200 INTRADAY LEVELS TO WATCH