The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 27/04/21 (as at 7:30am AEST)

  • SPI200 (Jun) overnight futures up 6 pts to 7026
  • SP500 up 7.45 pts to 4187.62
  • NASDAQ Composite up 121.97 pts to 14138.78
  • Dow Jones down 61.92 pts to 33981.57
  • FTSE100 up 24.56 pts to 6963.12
  • DAX30 up 16.72 pts to 15296.34
  • GOLD futures US session (June) down $3.30 to $1781.10 an ounce
  • COPPER futures US session (Comex May) up $0.1102 to $4.4512 a pound
  • OIL futures US Session (Nymex Jun) down $0.23 to $61.91 a barrel
  • CRB Index up 2.05 pts to 198.11
  • AUDUSD trading at 0.7800
  • EURUSD trading at 1.2088
  • GBPUSD trading at 1.3901
  • USDJPY trading at 108.1100
  • USD Index US Session (ICE Jun) down 0.034 to 90.805

US indexes had a contained session ahead of some key tech earnings and as traders set for an action packed end of month. Between today and Thursday earnings are due from Google (parent company Alphabet), Microsoft, Apple and Facebook which make up 40% of the SP500’s market capitalization. There have been 124 companies on the SP500 that have reported so far and 85.5% have beaten earnings estimates. More importantly, they are raising their expectations and outlooks for business going forward which will continue to support the major Indexes up at all time highs. Traders will focus on the upcoming Fed Reserve meeting and whether the current labour market landscape will change the Feds plan for its bond buying program which many expect to remain the same. With the macro picture remaining in tact (as long as there is no change from the Fed) expect to see traders remain risk on for the near future. The DOW closed down 0.18% while the broader SP500 ended up 0.18% and the Nasdaq closed up 0.87% for the session. In Europe, major Indexes were higher as stronger commodity prices supported miners and a rise on bond yields supported major bank shares. Optimism around the pandemic and that the worst may be over, also helped support sentiment to remain risk on around all time highs on key Indexes.

The USD Index brushed aside earlier strength in the Asian and European sessions to move lower into the US close. The trend down remains in tact with traders awaiting news from the FOMC statement as to whether the Fed will leave its $120 Billion a month bond purchase program in tact. If the program and support remains for the near future and the Fed will not hint at changing its course, then expect the dollar to remain under pressure. The EURUSD initially fell away back below the 1.2100 zone and resistance before the USD turned lower and saw buyers step back into the Euro and lift price back into resistance. The 1.2100 resistance level is key and bulls will be watching for consolidation just below the zone which will signal another move up and through to test up to higher levels. There is room for some back and fill lower to squeeze out some buyers with the anchor to the move up down at 1.2000. The GBPUSD held a retest of the 1.3865 area which is now the anchor for the move up which generally lacks conviction at this stage. If bulls can push price up through 1.3907, then we expect to see the rally extend to 1.3943 resistance…but any action may be contained until the FOMC statement tomorrow night. The AUDUSD added to recent gains and extended the move up into previous highs around 0.7813 where sellers stepped in and price reacted lower. The anchor to the move up is at 0.7778 so we may see some choppy action above the level as some buyers lock in some gains ahead of FOMC. The USDJPY remains a bit of a mess as price initially grinded lower before buyers again ramped price back up into the 108.170 area. Expect that there is some squaring up of sellers into the pair ahead of FOMC but if all remains in place from the Fed Reserve, then price may continue lower again as the USD continues to find pressure from sellers.

SPOT GOLD saw a spike down to 1770 as US bond prices also spiked lower but buyers managed to support the action and lift price back up to close around 1781. If gold is happy to follow the bond price then we may see a run higher as bonds look to be finding support in the short term. The spike down to 1770 is a concern for bulls as it may be the start of some corrective action of the run up from 1680. Crude Oil is showing some concern for global demand as India coronavirus troubles continue. Price pushed down to test lows at 60.78 before reacting back up in US trade to end around where it started the day. The reaction off 60.78 is a good sign of strength for bulls but buyers still have some work to do to get price action moving up and out of the current range towards recent highs. Copper remains very strong with bulls well and truly in control as price action looks set to test into highs from Feb 2011 around 4.6275. The short term timeframe is extended but the longer term daily has more to run so no need to be concerned with selling for now.

Cryptocurrencies bounced back hard from the recent selloff as bulls showed bears who is boss and rallied from the Asian market open to catch a lot of sellers off guard. Bitcoin is currently trading at $53699.5 up 12.79% while Ethereum is at $2528.44 up 14.26% and Ripple is at $1.31616 up a massive 33.35%.

The ASX200 had another flat session yesterday with no real direction to follow on from Fridays action as the Index was generally stuck in a narrow range to end down 15.1 points to 7045.6. The Gold sector came under the most pressure which was followed by Utilities and Consumer Staples. The Metals and Mining, Resources and Materials sectors managed to end in the green. Falling stocks outnumbered advancing ones by 753 to 600 and 391 ended unchanged.

The ASX200 is expected to open up 5/10 points although expect to see another uneventful session after the SPI200 lacked direction again overnight as the US awaits the Fed Reserve Statement.

ECONOMIC DATA OUT TODAY (AEDT)

JPY BOJ Outlook Report, Monetary Policy Statement and Policy Rate Tentative

USD Consumer Confidence 12am

SPI200 INTRADAY LEVELS TO WATCH