The Morning Jumpstart Macro view


  • SPI200 (Jun) overnight futures down 52 pts to 7096
  • SP500 down 44.17 pts to 4188.43
  • NASDAQ Composite down 350.38 pts to 13401.86
  • Dow Jones down 34.94 pts to 34742.82
  • FTSE100 down 6.03 pts to 7123.68
  • DAX30 up 0.76 pts to 15400.41
  • GOLD futures US session (June) up $5.30 to $1836.60 an ounce
  • COPPER futures US session (Comex July) down $0.0550 to $4.6935 a pound
  • OIL futures US Session (Nymex Jun) up $0.02 to $64.92 a barrel
  • CRB Index down 0.81 pts to 206.16
  • AUDUSD trading at 0.7833
  • EURUSD trading at 1.2131
  • GBPUSD trading at 1.4121
  • USDJPY trading at 108.8500
  • USD Index US Session (ICE Jun) up 0.077 to 90.293

US indexes were weaker with the biggest hit being to the Nasdaq on fresh inflation concerns. After Fridays weaker than expected employment data in a fast growing economy, Biden has said the administration wants to see more job hirings. In his words ‘if you’re receiving unemployment benefits and you’re offered a suitable job, you can’t refuse that job and just keep getting unemployment benefits’. The news weighed on markets and expectations that inflation will remain a concern if the benefits are taken away. Hi flying tech stocks were again the target for sellers with FAANGS stocks taking a hit and Nasdaq moving lower right from the open. Of course, the fact that the US remains hovering around all time highs is a good excuse for buyers to take some minor risk off the table after Fridays rally. All three Indexes remain in an uptrend and we expect that any further squeeze lower will lure in buyers as the Fed will remain firm on its bond buying support. US 10-year bonds moved lower as yields grinded higher but the move may have been more a reaction to the selloff in the Nasdaq than the trigger as prices remain supported and hold the uptrend for now. The general theme is ‘if prices move lower…the Fed will continue support….if prices are extended….the Fed may have it wrong on inflation‘ which creates the uncertainty for the moves. The DOW closed down 0.10% while the broader SP500 ended down 1.04% and the Nasdaq closed down 2.55% for the session. In Europe, major Indexes held onto Fridays gains as miners were again the main driver with surging commodity prices. Like in the US, inflation does remain a concern as economies continue to open up and recover from the coronavirus induced selloff last year. European traders will have eyes on US inflationary data and how the Fed Reserve will react…but we do expect that they have clearly telegraphed their stance and pullbacks will be supported for now.

The USD Index held the lows from Fridays selloff as buyers were happy to remain on the sidelines. The move lower in bonds saw some support off the 90 level in the dollar but we do expect that the pressure will remain in the near term. The longer price consolidates just around the 90.300 area, the weaker the move from buyers and the more likely another leg down becomes. The EURUSD was pressured off the highs as buyers locked in some gains on the USD strength. The move was not strong suggesting that bulls are no where near convinced of lower prices into the Euro. The squeeze lower is natural after a good move higher until buyers start to hold another higher low and soak up the remaining selling pressure. The GBPUSD rallied hard up through the 1.4000 level and never looked back. This was despite Scotland’s leader saying that another referendum on independence is inevitable after her party’s resounding election victory. The Pound looks like it wants to test the previous highs from late Feb above the 1.4200 level but we expect that price will need to either consolidate the gains to convince new buyers or pullback to flush out some buyers. Both will drag in sellers that can then be the fuel to squeeze prices higher. The AUDUSD continues to move in tandem with the equity markets as price was quick to reverse gains once the US opened and moved lower. The move lower really just gave up gains from the Asian and European sessions but may trigger some more risk off sentiment today on the ASX open. Either way price remains in a strong uptrend and we expect that buyers will again step in to build a base for another leg up. The USDJPY found some buyers to grind prices higher off support around 108.500. The move up is not convincing from bulls so we expect that any break down through 108.700 will lead to another leg lower through 108.500 and continued squeeze on buyers.

SPOT GOLD held on to the gains from Fridays rally in a nod to bulls as price looks set to add to the move up and make a push to 1860. With expectations for further weakness into the USD, we expect that 1830 will hold today and see buyers jump into the action. If the level does not hold, it is more likely a correction than a selloff so we will be looking for buyers to again build support. Crude Oil opened stronger before finding some pressure off the 65.50 level to end the US session around the same levels as Fridays close. Seems that sellers getting active although buyers are still happy to soak up pullbacks on the global demand theme. If price can hold up off the 64.00 level then expect that buyers will start the push to 67.00 and potentially higher. Copper reversed a lot of the gains from Fridays push into new daily highs so the concern now for bulls is that price may go into corrective mode and move lower. The key level now is around 4.5500. If price start to show signs of consolidation above the level, then we may expect another run up which we expect may find sellers around the 5.5000 zone.

Cryptocurrencies took a hit across the board after Etheruem slumped not long after hitting new all time highs. The action shows the nervousness of the markets but buyers will be sedated by the bounce back up off the lows. There will come a time when the bounce is short lived and catch out the ‘buy the dip’ mentality that is rampant into the crypto space and hallmark of a bubble. Bitcoin is currently trading at $55985.8 down 3.57% while Ethereum is at $4040.37 up 3.48% and Ripple is at $1.44220 down 5.05%.

The ASX200 had a bit of a breakout session yesterday to push up and out of the recent range bound action to end the day up 92 points to 7172.8. It was a great day for miners and commodity stocks with Metals and Mining, Resources, Materials and Gold sectors charging higher. We expect to see more of the same in coming sessions if the USD continues to come under pressure. Traders will be trying to factor in the winners and losers for the coming budget release tonight. Rising stocks outnumbered declining ones by 727 to 676 and 358 ended unchanged.

The ASX200 is expected to open down 50 points after the SPI200 was pressured lower in a negative US session.


CNY CPI and PPI 11:30am

EUR German WPI 4pm

EUR German ZEW Economic Sentiment 7pm

AUD Annual Budget Release 7:30pm

GBP BOW Gov Bailey Speaks 12:30am