The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR MONDAY 26/04/21

  • SPI200 (Jun) overnight futures up 4 pts to 7026
  • SP500 up 45.19 pts to 4180.17
  • NASDAQ Composite up 198.40 pts to 14016.81
  • Dow Jones up 227.59 pts to 34043049
  • FTSE100 up 0.32 pts to 6938.56
  • DAX30 down 40.90 pts to 15279.62
  • GOLD futures US session (June) down $5.30 to $1776.70 an ounce
  • COPPER futures US session (Comex May) up $0.0605 to $4.3335 a pound
  • OIL futures US Session (Nymex Jun) up $0.71 to $62.14 a barrel
  • CRB Index up 1.38 pts to 196.06
  • AUDUSD trading at 0.7739
  • EURUSD trading at 1.2096
  • GBPUSD trading at 1.3876
  • USDJPY trading at 107.8800
  • USD Index US Session (ICE Jun) down 0.524 to 90.797

US indexes ended the week on a positive note with gains across the board being led by tech. Major indexes were stronger from the open as traders brushed aside recent tax concerns as analysts and data crunchers were quick to point out that according to history, tax hikes have little affect on the stock market. The SP500 managed to push up into new all time highs into the close above 4190 but ended slightly below the level. The Nasdaq took out a minor resistance level which sets it up for a positive week if bulls keep the momentum going tonight. The DOW traded up to the top side of a minor range for the week which also suggests some positive momentum to start the week. US bonds traded in a minor range with price being capped towards recent highs and looking heavy into the close which suggests a move up in yields in the near term which may trigger some minor profit taking into shares again. The DOW closed up 0.67% while the broader SP500 ended up 1.09% and the Nasdaq closed up 1.44% for the session. In Europe, major Indexes were weaker to cap off a negative week in Europe. Defensive stocks were the best performers along with support into miners as commodities rallied. Traders will have their eyes on the resurgent pandemic in India and Japan to keep a gauge on market sentiment this week. For now, earnings continue to support markets and bulls as 10% of STOXX600 companies have reported so far and 67% have topped expectations.

The USD Index continued to push lower through Asian and European trade and into the US close. Price pushed down through minor recent lows and we expect that it will extend on the losses today and move down to test the 90.700 area. The rally into the Euro also pressured the USD down as traders see the yield benefit that USD has over the Euro will likely narrow in coming weeks. The EURUSD saw a late session rally after traders digested some better than expected Manufacturing and Services data earlier in European trade. It seems that price needed to flush out some buyers before heading higher once ECB president Lagarde spoke. Price is extended and may not have much fuel on the sidelines that wants to buy at resistance around 1.2100 so we expect price to fade back below 1.2070 today to clear out late buyers. Of course if the dollar continues to extend lower, that will give Euro bulls some confidence. The GBPUSD had a choppy session as price swung between gains and losses eventually settling up at intraday highs into the US close. Bulls will need to hold price above the 1.3838 level for a go at breaking minor resistance at 1.3890. We expect to see some consolidation below 1.3890 that will trap some sellers first before any potential move up. The AUDUSD benefited by the risk on move into the share markets and traded up off the 0.7700 zone. A rally into commodities helped to support the positive sentiment into the Aussie but price was capped into recent highs around 0.7760. Buyers will need to hold a higher level to get the fuel for a move up through 0.7760….ideally hold above the 0.7725 area. The USDJPY saw some strange action with a big spike lower on the back of the positive European data which was then followed by a stronger spike back up to erase the losses. The move suggests that bulls may be wanting to see a rally and squeeze of recent sellers so we will be watching the action for now for a push up through 108.250 before looking for any strength and higher low for buying opportunities.

SPOT GOLD saw a move down off the highs around 1795 in European trade as Bond yields saw a sudden move higher. Price did take out a minor support zone but buyers were quick to jump in to support the 1770 area which keeps the recent up trend in tact.We will be watching gold for a flush lower but to continue to hold above the 1770 area today. Crude Oil had a good session to fend off some earlier selling pressure to take out minor highs at 62.00 on the US session open. We will be watching to see if the 61.60 area holds today which will drag in more buyers for a push up to the 62.50 area and potentially higher today. Copper had a good session thanks in most part due to the USD fall. Price was bullish all day with buyers constantly holding higher levels. We expect that the momentum will continue on the open to take out the highs at 4.3755 before seeing some profit taking and grind lower. Longer term the USD weakness is expected to support price along with increasing demand for the metal.

Cryptocurrencies came under fire as trader sentiment turns negative as many expect that Bidens plan to raise capital gains taxes will curb investment into cryptocurrencies. Many bulls may be squeezed this week and forced to lock in some gains if the pressure continues. Bitcoin is currently trading at $47988.6 down 5.62% while Ethereum is at $2249.43 down 1.44% and Ripple is at $1.00824 down 7.76%.

The ASX200 had a rather lackluster session Friday to cap off a mixed week as buyers were happy to remain on the sidelines into the weekend. The index ended up 5.3 points to 7060.7 with the sectors being an even spread between winners and losers. Gains in Telecom Services, Financials and Metals and Mining stocks helped to support the action while Consumer Discretionary and Utilities were the biggest drag on prices. Falling stocks outnumbered advancing ones by 742 to 596 and 409 ended unchanged.

The ASX200 is expected to open up 5 points after the SPI200 held below recent highs. We expect to see some bullish action on the open if the ASX200 pushes above 7065 and expect a run to test the 7100 area.

ECONOMIC DATA OUT TODAY (AEDT)

EUR German ifo Business Climate 6pm

USD Durable Goods Orders Data 10:30pm

SPI200 INTRADAY LEVELS TO WATCH