The Morning Jumpstart Macro view

OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 29/04/21 (as at 7:30am AEST)

  • SPI200 (Jun) overnight futures up 18 pts to 7059
  • SP500 down 3.54 pts to 4183.18
  • NASDAQ Composite down 39.18 pts to 14051.03
  • Dow Jones down 164.55 pts to 33820.38
  • FTSE100 up 18.70 pts to 6963.67
  • DAX30 up 42.91 pts to 15292.18
  • GOLD futures US session (June) up $2.80 to $1781.60 an ounce
  • COPPER futures US session (Comex May) up $0.0125 to $4.4980 a pound
  • OIL futures US Session (Nymex Jun) up $0.92 to $63.86 a barrel
  • CRB Index up 0.27 pts to 200.36
  • AUDUSD trading at 0.7790
  • EURUSD trading at 1.2124
  • GBPUSD trading at 1.3936
  • USDJPY trading at 108.6000
  • USD Index US Session (ICE Jun) down 0.312 to 90.580

US indexes edged lower into the close as prices remain range bound up near highs. The Fed Reserve said that they are happy with the strengthening economy but they will be keeping the pedal to the metal with its monthly bond purchases to support a full recovery as they highlighted there still remains a lot of uncertainty. With their expectations that inflation is transitory, they still need to see substantial progress towards their employment goals before any easing will be considered. He said that they are 8.5 million jobs below February 2020, before the pandemic selloff, and a long way from their goals. Amazon and Facebook were both higher as they beat analysts earnings estimates and revenue targets…now awaiting the heavy hitting Apples results. Boeing fell to drag in the DOW after posting a wider than expected quarterly loss. Bonds were quick to reverse earlier losses and rally after the FOMC release as buyers jumped in to re-establish long positions and we expect that this theme will continue to pressure bond prices higher and yields lower in the near term. The DOW closed down 0.48% while the broader SP500 ended down 0.08% and the Nasdaq closed down 0.28% for the session. In Europe, major Indexes were cautious ahead of the FOMC statement release but still ended in the green with the DAX and FTSE both higher. Prices were supported by sentiment into Banks which supported the bulls while autos and basic materials stocks also continued to do well although traders were inclined to hold off on placing substantial risk into the market ahead of FOMC.

The USD Index was edging its way higher in the European session before taking a turn lower around the open of US trade and then again on the release of the FOMC statement. The dollar is widely expected to be further pressured by US deficit spending and break convincingly below the 90.000 level. Price may gradually find some support from expectations that the fed will sooner or later taper support…but for the near term, the pressure is down. The EURUSD played out as expected with support around 1.2060 holding and price spiking up through 1.2100. Price initially flushed support to trap some traders before ramping higher and with expected further weakness into the USD, the Euro could easily extend on the gains today before some heat comes out of the move up. The GBPUSD also played out nicely with a move down into lows to flush and trap sellers before a sharp move up to new highs. Price pushed straight up into resistance at 1.3945 where some buyers locked in gains to edge price lower off the level. We do expect that this resistance will not last long with the weak sentiment into the USD so will be watching for a higher low to build. The AUDUSD reversed losses from the day session after worse than expected CPI numbers and rallied off the 0.7730 level once the USD got moving lower. With the risk on sentiment and support into commodities, we expect that the Aussie will add to the gains and extend the rally into the 0.7813 resistance level and potentially to the 0.7848 area in the near term before some heat comes out of the action. The USDJPY seemingly factored in too much and the dollar weakness unwound some long positions into the currency pair with a move lower. Price found some sellers at the 109.000 zone and was already heavy ahead of the USD selloff. We would expect that the move will continue lower to squeeze recent buyers.

SPOT GOLD dragged in some sellers (or squeezed out some bulls) into the 1765 area before ramping higher into the US open and again on the back of the FOMC release as Bonds rallied. Price may need to consolidate the 1780 area and build a higher low before dragging in more bulls for a run higher as we expect continued short term pressure on Bond yields and upside pressure into bond prices…along with dollar weakness. Crude Oil added to recent gains and flushed previous highs around 64.40 before finding some selling pressure to squeeze out some buyers. The move up is a little extended but bulls will now be looking for a higher low to hold and price to continue up through 64.40 towards highs at 68.00. Copper was just taking a breather as expected and flushed lows around 4.4590 to trap some sellers before ramping back up on the back of the USD weakness. Bulls are well in control and potentially targeting a flush of major daily highs around 4.6400. Either way you look at it, the force is strong with the bulls and higher lows are holding for now.

Cryptocurrencies were mixed as Bitcoin found some chop and Ethereum grinded its way higher. Price in Bitcoin is looking heavy and may setup for a fall if the 53900 level can not hold which will in turn pressure other cryptos. Bitcoin is currently trading at $54770 down 0.94% while Ethereum is at $2748.01 up 3.91% and Ripple is at $1.37165 down 3.16%.

The ASX200 opened relatively flat yesterday before getting a boost from worse than expected CPI (Inflationary) numbers at 11:30am. Traders see that any rate rise is now even further out on the horizon so they were happy to go risk on into shares. The index ended the day up 30.9 points to 7064.7 and within striking distance of new all time highs. The Financial and Energy sectors were the biggest gainers while Gold took a beating and Metals and Mining also gave up some recent gains. We would expect to see some love back into Gold today and energy to again do well along with commodities. Falling stocks outnumbered advancing ones by 682 to 675 and 375 ended unchanged.

The ASX200 is expected to open up 20 points after the SPI200 added to the day sessions gains and pushed up into resistance.

ECONOMIC DATA OUT TODAY (AEDT)

JPY Bank Holiday

AUD Import Prices 11:30am

EUR German Import Prices 4pm

EUR German Unemployment Change 5:55pm

USD Advance GDP and Unemployment Claims 10:30pm

USD Pending Home Sales 12am

SPI200 INTRADAY LEVELS TO WATCH