The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR FRIDAY 16/04/21 (as at 8:15am AEST)

  • SPI200 (Jun) overnight futures up 15 pts to 7051
  • SP500 up 45.76 pts to 4170.42
  • NASDAQ Composite up 180.92 pts to 14038.76
  • Dow Jones up 305.10 pts to 34035.99
  • FTSE100 up 43.92 pts to 6983.50
  • DAX30 up 46.18 pts to 15255.33
  • GOLD futures US session (June) up $23.32 to $1764.90 an ounce
  • COPPER futures US session (Comex May) up $0.0038 to $4.2298 a pound
  • OIL futures US Session (Nymex May) up $0.38 to $63.37 a barrel
  • CRB Index up 1.41 pts to 193.86
  • AUDUSD trading at 0.7754
  • EURUSD trading at 1.1969
  • GBPUSD trading at 1.3787
  • USDJPY trading at 108.7100
  • USD Index US Session (ICE Jun) up 0.018 to 91.692

US indexes had a party as they traded into new all time highs being supported by some more solid earnings and positive data. Unemployment claims dropped to the lowest level since mid-march 2020 while retail sales came out and smashed estimates as consumers spent some of their hard earned cash and stimulus savings. The data which came out prior to the US open, got the US off to a strong start and tech stocks once again supported the broader market as inflation concerns were well and truly pushed to the sidelines. US Bonds rallied hard as yields tumbled in the biggest single-day decline in the benchmark’s yield in almost three months. The support may have been pre-emptive of Russia and US tensions on Bidens sanctions (below) providing a safe haven bid. Traders are also now in line with the Fed and expect the cost of debt to remain low and support the recovery for the foreseeable future. The DOW closed up 0.90% while the broader SP500 ended up 1.11% and the Nasdaq closed up 1.31% for the session. In Europe, major Indexes were stronger for the session as a rally in commodity prices supported the bulls along with some positive earnings results. The DAX index was relatively range bound as higher European bond yields weighed on the action and price hovered around all time highs. The DAX looks set to push into new all time highs again soon while the FTSE added to recent gains and continues to play catchup as bulls think about targeting new highs also.

The Russian Ruble took a hit as a new set of US sanctions were put in place to punish Russia for alleged interference into the US elections, cyber hacking and other non-friendly acts. Analysts said that the hit to the currency and Russian state bonds will not have a significantly adverse impact although Russia is expected to retaliate and tensions between the two countries will spike.

The USD Index was well contained with price swinging between gains and losses through European and US trade. With inflation concerns off the cards, the dollar should remain heavy although price is down towards potential support and may have already unwound a lot of buyers on the wrong side of the action. If the 91.740 level holds today, then expect to see a further push lower. The EURUSD also chopped around with any push up into resistance around 1.1990 being capped by sellers. The lack of direction also saw buyers soak up and push lower as price is showing signs of consolidating the highs and recent move up. This maybe pointing to a push up through resistance which would suggest further weakness into the USD. If bulls can hold price above the 1.1950 level, then we expect to see a further squeeze on sellers. The GBPUSD was also well contained and produced some choppy action for traders. Sellers were happy to cap any push higher around 1.3808 and buyers provided support into 1.3765. Price action is contracting and we expect a breakout higher soon although would expect to see a flush lower first to put some buyers back on the sidelines. The AUDUSD continued to see buyers jump into the action with shares rallying as the currency pair is a proxy for traders risk appetite. The Aussie initially cleared out both sides of the market in the Asian session through minor highs and then lows before ramping up again to the 0.7760 area where it consolidated into the US close. Bulls will be looking to hold above 0.7738 but there will be some decent retail stops under the level that will be tempting to traders and may be a target today. The USDJPY was a grind lower as the USD held the lows and failed to rally along with the bond market. With higher bond prices, the USD will be less attractive for a yield play and should see further selling which is what USDJPY traders look to be anticipating.

SPOT GOLD rallied up through the 1760 zone after earlier flushing out some buyers in the Asian session. Buyers were already pushing price higher prior to the US data release when they really started the ramp higher. Bulls were supported by the retreat in bond yields and will look to hold price above the 1760 zone if yields continue to fall. If bulls have their way then we may be looking at a move up to the 1810 area in the medium term before sellers start to cap gains. Crude Oil managed to hold on to the previous gains and is showing strong signs of consolidating the highs and building for another leg higher. Buyers were supported by the strong US data and news on higher demand forecasts from the International Energy Agency. In the near term if price can hold the 62.60 level then expect an extension into the 66.00 zone which is highs from mid march. Copper bulls came out to play and continued to ramp price highs being supported by the US data and expected demand for the metal. Price paused only briefly around resistance at 4.1745 before buyers extended on the gains through the level. If price starts to break back down below the 4.2030 area then we may see some minor gains locked away and price go into pullback mode as the action is extended.

Cryptocurrencies were generally stronger with Ethereum leading the way and providing support to trader sentiment. Bitcoin is currently trading around $63337.0 up 0.78% while Ethereum is at $2530.20 up 4.28% and Ripple is at $1.78774 down 0.44%.

The ASX200 opened weaker yesterday but the bulls looked intent on ramping prices higher as the index was all one way traffic with from just after the open. The index ended slightly off the days highs up 35.5 points to 7058.6 with the Metals and Mining, Resources and Materials sectors being the biggest drivers of the gains while the Gold sector was the ended down 2.43%. Local employment data came out better than expected which only added to the buying pressure. Rising stocks outnumbered declining ones by 674 to 645 and 400 ended unchanged. The Nikkei ended the day relatively unchanged while the Hang Seng took a hit to give up some of the previous sessions gains. China data out at midday that may trigger some local volatility.

The ASX200 is expected to open up 15 points after the SPI200 managed to add to the day sessions gains overnight.

ECONOMIC DATA OUT TODAY (AEDT)

CNY GDP, Industrial Production and Retail Sales 12pm

EUR Final CPI and Trade Balance 7pm

USD Building Permits and Housing Starts 10:30pm

USD Consumer Sentiment and Inflation Expectations 12am

SPI200 INTRADAY LEVELS TO WATCH