The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR MONDAY 19/04/21

  • SPI200 (Jun) overnight futures up 37 pts to 7071
  • SP500 up 15.05 pts to 4185.47
  • NASDAQ Composite up 13.58 pts to 14052.34
  • Dow Jones up 164.68 pts to 34200.67
  • FTSE100 up 36.03 pts to 7019.53
  • DAX30 up 204.42 pts to 15459.75
  • GOLD futures US session (June) up $10.50 to $1777.30 an ounce
  • COPPER futures US session (Comex May) down $0.0520 to $4.1665 a pound
  • OIL futures US Session (Nymex May) down $0.33 to $63.13 a barrel
  • CRB Index down 0.65 pts to 193.21
  • AUDUSD trading at 0.7734
  • EURUSD trading at 1.1983
  • GBPUSD trading at 1.3832
  • USDJPY trading at 108.8000
  • USD Index US Session (ICE Jun) down 0.088 to 91.530

US indexes ended Friday with further gains to lock in another solid week being the fourth green week in a row. Traders continued to jump into the action after strong economic data out of the US and China supported expectations for a solid global recovery. Stimulus along with strong US bank earnings helped to push the SP500 and DOW into new all time highs for the week. Traders expect the action to continue to grind higher this week being supported by more positive earnings results, massive fiscal and monetary support and vaccine distribution. Bond yields did bounce back on the US open but were under pressure again during the session to move lower off intraday highs with Bond prices now looking set for another push higher off major support. The DOW closed up 0.48% while the broader SP500 ended up 0.36% and the Nasdaq closed up 0.10% for the session. In Europe, major Indexes were higher with the German DAX index leading the charge. German car and truck maker Daimler rose 2.7% after good earnings showed higher prices and demand from China helped it post a surge in quarterly profit. The sentiment flowed over into the wider sector and other areas of the market with expectations for a strong earnings season to push Indexes into new highs.

The USD Index ended the week around its lows and held major support. Price action continues to look heavy with sellers continuing to squeeze out buyers as Bond prices edge higher. We expect the the dollar index will hold below 61.620 today and pressure into the 91.500 area which will support major pairs. The EURUSD was capped into resistance around 1.1990 which will again come under fire today if the USD pressures lower. Sellers managed to fend off a break of the level in European and US trade but we see price consolidating below the zone before another spike higher and through the level as long as the 1.1951 area holds as support. The GBPUSD, as standard, started the session with a squeeze to flush out some traders before ramping higher into resistance around 1.3838. We expect to see some short term profit taking off the zone to take some heat out of the rally before buyers hold a bid and higher low for another run up and potentially through the level. The AUDUSD could not hold above the 0.7738 level before some selling pressure came in and the a rally was later rejected at 0.7760. Bulls will be watching the move lower to see if it can hold above 0.7705 as price action is extended in the near term. The USDJPY is not as bearish as many would hope and finding some buying as price moves into potential support around 108.400. If buyers hold the 108.700 area then expect to see a test and potential break of 108.940.

SPOT GOLD added to the previous sessions rally to help cap off its biggest weekly gains since early November. Prices have been helped by a slide in Bond yields and the USD which is expected to continue this week. Bulls held price above the 1760 level and will expect to add to the gains today and extend price higher into the 1810 area in coming days. Crude Oil rallied in the Asian session but then gave up the gains in European and US trade. Price continues to hold above the anchor to the leg up at 62.60 although buyers may be running out of puff in the short term. Price may contract further today off the highs but we do expect that the level will hold as bulls are supported by higher demand expectations. In the near term if price can hold the 62.60 level then expect bulls to regain their footing and extend into the 66.00 zone. Copper went into pullback mode as expected off 4.2270 highs with recent buyers happy to lock in some gains. As global economies continue to open up, we expect that the bullish demand theme will continue to support price for the metal. For now, a grind lower is on the cards as more heat is taken out of the rally before price consolidates for a higher low.

Cryptocurrencies took a bit hit over the weekend with Bitcoin at one stage dumping all the way down to 51600 before recovering back to the 55000 zone. Other majors such as Ripple, Ethereum, EOS and Cardano also took a big hit and may see some further pressure today as markets open for the week. Bitcoin is currently trading at $55673.3 down 8.32% while Ethereum is at $2194.11 down 8.17% and Ripple is at $1.33533 down 16.06%.

The ASX200 opened Friday and put the squeeze on buyers for a move lower before bulls fought back to ramp price back up into the close. In the end the ASX managed to end up 4.9 points after being down around 30 points just after midday. The Asian session was supported by solid data from China showing a record 18.3% growth in the first quarter. Expectations are that Asian exports will benefit from US and European economies opening up in coming months and in turn help emerging markets and fixed income. The Gold sector was again the best performing sector and we expect to see more of the same today. The Metals and Mining sector along with IT also put in a decent effort while Energy did not fair so well. Rising stocks outnumbered declining ones by 768 to 565 and 414 ended unchanged.

The ASX200 is expected to open up 30/35 points after the SPI200 made back the lost ground from the day session and closed above the previous highs.

ECONOMIC DATA OUT TODAY (AEDT)

JPY Trade Balance 9:50am

JPY Revised Industrial Production 2:30pm

EUR Current Account 6pm

SPI200 INTRADAY LEVELS TO WATCH