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OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 20/01/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures up 12 pts to 6689
- SP500 up 30.66 pts to 3798.91
- NASDAQ up 198.68 pts to 13,197.18
- Dow Jones up 116.26 pts to 30,930.52
- FTSE100 down 7.70 pts to 6712.95
- DAX30 down 33.29 pts to 13,815.06
- GOLD futures US session (Feb) up $8.50 to $1838.40 an ounce
- COPPER futures US session (Comex Mar) up $0.0232 to $3.6252 a pound
- OIL futures US Session (Nymex Feb) up $0.65 to $53.01 a barrel
- CRB Index down 0.40 pts to 174.85
- AUDUSD trading at 0.7696
- EURUSD trading at 1.2127
- GBPUSD trading at 1.3635
- USDJPY trading at 103.8900
- USD Index US Session (ICE Mar) down 0.277 to 90.477
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US indexes were higher from the open as bulls were supported by the idea of more stimulus. Treasury Secretary nominee Janet Yellen said that lawmakers should act big on the next relief package….spend now and worry later approach. This boosted risk assets and many will see this as a short term positive to get the economy up and running again but it will also be a long term negative and push up bond yields on the back of inflation expectations. The move will only further inflate bubbles in some assets and add to the already massive deficits. She also mentioned that we should not expect tax hikes from Biden to pre-Trump levels but that he will expect corporations to ‘pay their fair share’. The DOW closed up 0.38% while the broader SP500 ended up 0.81% and the Nasdaq closed up 1.53% for the session. In Europe, major Indexes gave up early gains from the open as coronavirus worries continued to weigh on the market as it was dragged down by retailers, travel and banking stocks. Traders now are trying to weigh up the further damage done to earnings and economic growth from the current lockdowns. Traders started the session being buoyed by China’s data showing growth but sentiment soon took a hit as German Chancellor Angela Merkel and state premiers agreed to extend a lockdown for most shops and schools until Feb 14th.
The USD Index came under pressure in the European and US sessions as traders weigh up more stimulus in the pipeline from the US. The recent rally on fears of inflation, caught many bears off guard and the squeeze on sellers cleared the way for another potential leg down. If the 90.570 level holds today, a break of 90.400 is on the cards which will open up a larger move down. Expect that this will help support commodity prices and in turn our local market. The EURUSD rallied on the back of the dollar weakness and looks set for another run higher which would support the idea of a push lower into the USD. If price holds 1.2116 today we should see a push up through 1.2140. Traders may need to flush support first so we will be on guard for a higher low to build for the move up. The GBPUSD spend the European and US sessions grinding its way higher off the 1.3520 level. The minor anchor to the trend up is at 1.3605 so if this level holds then we expect to see continuation of the move up. The AUDUSD found some weakness off the 0.7725 area but pulled back to find buyers to hold a higher low at 0.7688. Expect to see further weakness into the USD lift the Aussie up through 0.7725 and drag in more bulls for a move back to the 0.7800 zone. The USDJPY again remained above the 103.610 support area as it seems that there was some early selling into the YEN which offset the dollar weakness. We will be watching to see if buyers build a higher low around 103.870 or whether there is a grind back down to 103.610 support as the dollar weakness weighs.
SPOT GOLD continues to look heavy even as weakness in the dollar supported price. The overnight action was range bound with sellers capping rallies into the 1844 zone. A break below 1833 may see an unwind of the recent buying and price push down into 1820 and potentially below. Continued USD weakness will support price but for now but all we would expect is a grind higher and Gold safe haven buyers to stay out of the action in the near term. Crude Oil benefited from the dollar weakness and news of potential further stimulus to support the US economy. Price held the 52.53 area to grind its way higher with targets potentially up to 53.80 and above. Copper had a choppy session as sellers capped the rally from the European session and pushed price back down off the 3.6500 area. Buyers remained vigilant and supported the spike lower so we continue to expect a rally and are bias up until a clear break below 3.5625. Further weakness into the USD will support the bullish action.
Cryptocurrencies were higher with Ethereum taking the lead and charging higher through resistance. Bitcoin is currently trading at $36516.2 up 1.11% while Ethereum is at $1399.56 up 11.87% and Ripple is at $0.30229 up 6.67%.
The ASX200 reversed the previous few sessions losses and bounced back up to highs around 6750 before settling slightly lower into the close. In the end the index finished up 79.6 points to 6742.6 with the Consumer Discretionary, Gold and IT sectors leading the charge. Buyers were supported by a strong Nikkei and Hang Seng which both powered higher from the their opens. Rising stocks outnumbered declining ones by 809 to 536 and 371 ended unchanged.
The ASX200 is expected to open up 10/15 points to continue on from yesterdays strength with commodity companies expected to do well.
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ECONOMIC DATA OUT TODAY (AEDT)
AUD Westpac Consumer Sentiment 10:30am
EUR German PPI 6pm
GBP CPI and PPI Data 6pm
EUR Final CPI Data 9pm
CAD CPI Data 12:30am
CAD BOC Rate Statement and Overnight Rate 2am
CAD BOC Press Conference 3am
GBP BOE Gov Bailey Speaks 4am
USD President Elect Biden Speaks Tentative
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SPI200 INTRADAY LEVELS TO WATCH
