The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 14/04/21 (as at 8:00am AEST)

  • SPI200 (Jun) overnight futures up 19 pts to 6971
  • SP500 up 13.60 pts to 4141.59
  • NASDAQ Composite up 146.10 pts to 13996.10
  • Dow Jones down 68.13 pts to 33677.27
  • FTSE100 up 1.37 pts to 6890.49
  • DAX30 up 19.36 pts to 15234.36
  • GOLD futures US session (June) down $1.00 to $1746.60 an ounce
  • COPPER futures US session (Comex May) down $0.0010 to $4.0380 a pound
  • OIL futures US Session (Nymex May) up $0.48 to $60.18 a barrel
  • CRB Index up 1.73 pts to 188.14
  • AUDUSD trading at 0.7644
  • EURUSD trading at 1.1950
  • GBPUSD trading at 1.3752
  • USDJPY trading at 109.0700
  • USD Index US Session (ICE Jun) down 0.312 to 91.832

US indexes were mixed with Tech leading the way higher and supporting the broader market SP500 while the DOW ended the session lower. The CPI figure came out stronger than expected but traders are no longer concerned with higher inflation as bond prices pushed higher. Expectations are now for a spike in inflation but not leading to any raise in interest rates. Bond yields moved lower as short bond positions were squeezed and the US Treasury issue saw solid demand to add to the upward pressure. This took the pressure off tech stocks which saw some bargain hunting after moving lower recently on the back of higher yields. Traders will now be well and truly focused on coming earnings and with the volatility being low, they are steadfast in the view of a full economic recovery leading to higher prices and a continued rally. Earnings will kick off tonight with bank stocks Goldman Sachs, JPMorgan and Wells Fargo reporting. The DOW closed down 0.20% while the broader SP500 ended up 0.33% and the Nasdaq closed up 1.05% for the session. In Europe, major Indexes had a lackluster session with the DAX hovering near all time highs and the FTSE holding above the previous sessions lows in low volume trading. The US CPI data gave traders confidence that the Fed will keep their accommodative policy stance for the near future. Import/Export data out of China supported the action and lifted the export heavy DAX.

The USD Index moved lower after a quick spike higher on the CPI release to clear out some sellers. Bulls finally looked to give up on the view for higher inflation triggering the Fed into action on interest rates. Traders have been convinced by the Fed that a spike in inflation is expected and will be temporary and so far the economy is sticking to the Feds script. Focus now will be for a lower USD as stimulus weighs. Expect to see sellers pressure prices and any rally contained and lower highs hold as any safe haven bid disappears for now. The EURUSD was well contained above support into the US CPI release and then ramped higher through 1.1920 to lift price up and out of the recent range. Bulls are now on track to test highs around 1.1985 and beyond depending on the USD movement. A good move up through this level will signal that bulls have higher prices in mind and expect the dollar pressured lower so will be watching the reaction from sellers around the zone. The GBPUSD saw some chop during the session with minor highs and lows both washed out to put traders back on the sidelines. Longer term, the action looks bullish as price is being held up off lows so we expect that it is only a matter of time before price action finds a bid and ramps up through 1.3780. The AUDUSD also benefited from the dollar weakness as price ramped up towards the 0.7660 area and squeeze out the sellers. The bullish action was relentlessly consistent (smelling of Algo buying) after the CPI number and washout of lows. Bulls look determined to test the highs and any clear break of 0.7660 will lead to a run on 0.8000 highs. The USDJPY came under fire after the data release but sellers were already pressuring price lower from the start of the European session. Expect that if buyers can not hold the current levels then the action is set to test down to 108.360.

SPOT GOLD rallied around $20 off the lows as the dollar fell over and supported the gold bulls. The move has now broken up out of the downtrend off 1760 so we are watching for signs that buyers are happy to continue the move up. With our expectations that the medium term will see further weakness into the USD, Gold will benefit and rally through highs which will see some action into local gold stocks. Crude Oil found a constant bid to soak up any selling pressure but is remaining below resistance at 60.85. Crude oil inventories are out tonight and as expectations for a full global recovery are entrenched, we expect that Oil will make a move higher as long as the 60 zone can hold. Expect that sellers will try to flush minor higher lows but the scene is set for a break higher towards 62.00. Copper managed to spike higher after the data release but then fell away from highs in the US session. Price is looking heavy and set for a squeeze on buyers if the 4.0400 level holds today and sellers start to attack the 4.0265 area. Medium term, price remains in a downtrend off 4.1695 but longer term bulls are trying to build a base to continue the trend higher so any short term selling pressure may be limited for now especially if the USD continues lower.

Cryptocurrencies had a strong night as bulls were active across the board. Prices were triggered higher by Bitcoin which ramped up through 61650 highs. Bitcoin is currently trading at $63179.3 up 5.20% while Ethereum is at $2281.25 up 6.12% and Ripple exploded higher and is at $1.77501 up 27.53%.

The ASX200 started the session in the green yesterday but was quick to fade and move lower as buyers remained skeptical up towards all time highs. The index ended the session up only 2.9 points to 6976.9 with the IT sector doing most of the heavy lifting while Consumer Staples and Gold also ended with minor gains. The Utilities sector was the biggest drag on the index while Resources and Energy also kept bulls in check. Falling stocks outnumbered advancing ones by 704 to 593 and 407 ended unchanged.

The ASX200 is expected to open up 15 points as the SPI200 saw a repeat of the previous session and support hold. The ASX200 will need to hold up off 6955 for another try to break above the 7000 level targeting new all time highs.

ECONOMIC DATA OUT TODAY (AEDT)

AUD Consumer Sentiment 10:30am

NZD RBNZ Rate Statement and Cash Rate 12pm

EUR Industrial Production 7pm

USD Import Prices 10:30pm

EUR ECB President Lagarde Speaks 12am

USD Crude Oil Inventories 12:30am

USD Fed Chair Powell Speaks 2am

USD Beige Book 4am

SPI200 INTRADAY LEVELS TO WATCH