The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 28/04/21 (as at 7:30am AEST)

  • SPI200 (Jun) overnight futures up 17 pts to 7021
  • SP500 down 0.90 pts to 4186.72
  • NASDAQ Composite down 48.56 pts to 14090.22
  • Dow Jones up 3.36 pts to 33984.93
  • FTSE100 down 18.15 pts to 6944.97
  • DAX30 down 47.07 pts to 15249.27
  • GOLD futures US session (June) down $4.00 to $1776.10 an ounce
  • COPPER futures US session (Comex May) up $0.0370 to $4.4815 a pound
  • OIL futures US Session (Nymex Jun) up $1.03 to $62.94 a barrel
  • CRB Index up 1.98 pts to 200.09
  • AUDUSD trading at 0.7765
  • EURUSD trading at 1.2091
  • GBPUSD trading at 1.3906
  • USDJPY trading at 108.7000
  • USD Index US Session (ICE Jun) up 0.063 to 90.843

US indexes were generally range bound as tech stocks weighed on the Nasdaq and SP500 as traders locked in some recent gains. Tesla took a hit as earnings disappointed traders expectations with its revenue beat largely supported by sales of environmental credits and selling some of its bitcoin holdings. The Nasdaq may be in for a volatile week if earnings from Apple, Facebook and Amazon do not live up to traders expectations. Consumer confidence data showed the strength of the recovery as sentiment lifted with more services businesses to reopen, boosting demand and hiring by companies. Indexes remained largely directionless as traders held on the sidelines ahead of FOMC statement tonight on the state of play with the bond buying program and the Feds inflation outlook. US Bond prices took a bit of a hit as yields rallied ahead of the Feds release as some buyers squared up their positions. The Fed is expected to confirm it will maintain its easy monetary policy to continue to bolster the economy which should see support back into bonds. The DOW closed up 0.01% while the broader SP500 ended down 0.02% and the Nasdaq closed down 0.34% for the session. In Europe, major Indexes moved lower as traders await the Fed release later tonight in the US. Banks did well thanks to strong earnings although UBS fell after a surprise hit which was linked to the collapse of hedge fund Archegos which outweighed a forecast-beating 14% rise in quarterly net profit.

The USD Index held up off the 90.800 zone as traders await the Fed release. Price action held a minor lower high at 90.981 which suggests that the bias remains down in the near term weighed by stimulus supply. We expect that the 90.800 level will be broken tonight if the Fed remains accommodative as expected and buyers get squeezed out of the action. Traders will be closely combing over the statement for any changes as the strength of the rebound and higher employment will eventually change the Feds tone. The EURUSD held below the 1.2100 resistance level but looks set for a move up which would support the idea of further weakness into the USD. Price rejected the 1.2060 area which should drag in more buyers today if the minor higher low at 1.2070 can hold price up. The GBPUSD held another retest of the 1.3865 area along with a flush to clear out some buyers which we see as a positive sign for bulls. Price is starting to consolidate around the 1.3900 level and looks bullish. Expect to see higher prices if the 1.3920 level breaks. The AUDUSD continued to move lower off the highs and broke the anchor to the move up off 0.7700 so buyers are now watching for a level to provide support which we expect will be around the 0.7760 area. For now the pressure remains lower until the FOMC release and/or buyers can change the short term tide. The USDJPY saw a big short squeeze and spike higher once the 108.300 level was cleared. Buying into the YEN well and truly offset any buying into the USD but price is extended and we would expect to see some profit taking soon….or in other words, we would not buy up here until a higher low confirms.

SPOT GOLD continues to track bond prices and awaits the Fed Reserve statement release. Price held in a rough range between 1774 and 1784 and we would expect that buying will be supported on expectations that the Fed will maintain its easy monetary policy. Bulls will need to hold a higher level off 1764 that has rejected any selling recently which provides some positive signs for buyers. Crude Oil rallied as price broke up and out of the recent trading range to end near session highs. Bulls were supported by optimism ahead of OPEC+ meeting where they will discuss output policy which many expect to be supportive of price. The optimism outweighed the concern for Indias covid issues which could dent the demand of the commodity. We expect to see price work its way higher ahead of US inventory data tonight. Copper remains on a charge higher as bulls ramp price up. Price action may be taking a breather now and correcting off recent highs around 4.5155 which will put the squeeze on late buyers if minor lows at 4.4590 are taken out. We expect that bulls have not finished yet and will be watching for price to consolidate the recent gains for a spike to daily highs from 4.5400 to 4.6400.

Cryptocurrencies bulls continued to fight back up off recent lows as buyers edged their way into the market on hopes that recent action put in a major bottom. Ethereum continues to outperform as price extended into new highs where we would expect to see some profit taking. Bitcoin is currently trading at $55295.4 up 3.66% while Ethereum is at $2640.41 up 5.88% and Ripple is at $1.41836 up 9.68%.

The ASX200 opened weaker yesterday and pushed down to the 7000 area before buyers stepped in to lift price back up into the close. The index ended the day down only 11.8 points to 7033.8 with the IT sector weighing most on the action while buyers again supported Metals and Mining, Materials and Resources which ended with gains. Falling stocks outnumbered advancing ones by 720 to 612 and 396 ended unchanged.

The ASX200 is expected to open up 10/15 points after the SPI200 made back more of the days session losses.

ECONOMIC DATA OUT TODAY (AEDT)

AUD CPI Data and Goods Trade Balance 11:30am

ALL OPEC-JMMC Meetings Tentative

CAD Retail Sales Data 10:30pm

USD Prelim Wholesales Inventories 10:30pm

EUR ECB President Lagarde Speaks 12am

USD Crude Oil Inventories 12:30am

USD FOMC Statement and Fed Funds Rate 4am

USD FOMC Press Conference 4:30am

SPI200 INTRADAY LEVELS TO WATCH