–
OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 21/01/21 (as at 8am AEDT)
- SPI200 (Mar) overnight futures up 44 pts to 6757
- SP500 up 52.94 pts to 3851.85
- NASDAQ up 260.07 pts to 13,457.25
- Dow Jones up 257.86 pts to 31,188.38
- FTSE100 up 27.44 pts to 6740.39
- DAX30 up 106.31 pts to 13,921.37
- GOLD futures US session (Feb) up $29.20 to $1869.40 an ounce
- COPPER futures US session (Comex Mar) up $0.0117 to $3.6452 a pound
- OIL futures US Session (Nymex Feb) up $0.26 to $53.24 a barrel
- CRB Index up 0.30 pts to 175.14
- AUDUSD trading at 0.7746
- EURUSD trading at 1.2107
- GBPUSD trading at 1.3657
- USDJPY trading at 103.5200
- USD Index US Session (ICE Mar) down 0.026 to 90.450
–
US indexes were again strong right from the open as the NASDAQ rallied into new all time highs to drag the SP500 along for the ride. Bulls were out in force to continue the retail led investing boom thanks to more stimulus hopes while Bidens inauguration survived any Trump supporter drama. Netflix surged after it said that it will no longer need to borrow billions to finance its tv shows and movies. The move lifted other stay at home tech stocks as the NASDAQ surged from the open on positive sentiment for earnings as FAANG stocks are due to report in the coming weeks. The DOW closed up 0.83% while the broader SP500 ended up 1.39% and the Nasdaq closed up 1.97% for the session. In Europe, major Indexes got a boost from the US stimulus expectations to play catch up with the US. Indexes were supported by retail as luxury goods got a boost led by strong growth in Asia and the Middle East.
The USD Index continued to come under pressure as data showed investors are overwhelmingly short on the dollar as they bet that the budget deficit will continue to pressure price lower. Buyers rallied through the European session to squeeze out some recent sellers before the start of the US session saw another wave of selling pressure that continued into the close. Expect to see a break below 90.390 today lead to further downside and support for risk assets. The EURUSD had a good move down at the start of the European session which added to the early strength into the dollar. Traders may be repositioning ahead of ECB interest rate data tonight. Buyers stepped in around the 1.2080 area to provide support so we will be watching for further USD selling pressure to bring in buyers to the Euro off major support. The GBPUSD pushed higher into resistance early in the European session after some positive CPI and PPI data. Sellers stepped to to cap the buying into 1.3720 and sent price lower before the weaker USD provided some support. For now price seems caught between resistance and support so watching for clearer price action from either buyers or sellers. The AUDUSD benefited from a strong Asian session and risk on sentiment into equity markets. Expect to see the positive move continue as buyers held the 0.7725 area. If the level comes under pressure, then we may see another unwind of longs through 0.7700…but this will hinge on the USD and major Index sentiment taking a hit. The USDJPY finally found the selling pressure we were looking for and pushed below the 103.600 support level. Watching now to see if the move was just a stop loss run or the start of a bigger leg lower on further USD weakness…the 103.520 level is key in the short term ie a break will bring in sellers and if it holds, a bounce back higher will be on the cards.
SPOT GOLD finally made a move that the bulls can be proud of as price pushed up through resistance at 1860 benefiting from USD weakness. The move looked ‘engineered’ as buyers were squeezed out of the action on a push lower off resistance before price did a sudden turn and spiked higher. We will be watching to see the reaction from buyers on the first pullback to see if the move will have any legs to the upside. Crude Oil rallied through the Asian and European sessions on expectations that stimulus will lift economic output and therefore demand for the commodity. Price did give back some of the gains in the US session as price backed off from a resistance area around 53.85 as recent buyers locked in gains. Expect to see the swings and roundabouts as virus cases in the US and China continue to climb and weigh on bullish sentiment. Copper was supported by further USD weakness as expected and held an inside bid zone around 3.6035. Price action is not convincing that we will see a spike higher but buyers are soaking up selling pressure so expect that a run higher will be on the cards soon.
Cryptocurrencies were generally weaker although the action looks more like a base build as buyers get squeezed out and support forms. Bitcoin is currently trading at $34857.7 down 4.64% while Ethereum is at $1320.59 down 6.77% and Ripple is at $0.29218 down 3.69%.
The ASX200 added to the previous sessions gains yesterday to close up 27.8 points to 6770.4. The Financial sector was the only one that ended lower while IT lead the charge higher followed by Gold and Energy. Another strong Asian session helped to support sentiment as China continues to grow. Rising stocks outnumbered declining ones by 798 to 566 and 334 ended unchanged.
The ASX200 is expected to open up 40/45 points as SPI200 bulls were well and truly in charge overnight after key support held. Trading may be muted early after the open until employment data is released at 11:30am.
–
ECONOMIC DATA OUT TODAY (AEDT)
AUD Employment Change and Unemployment Rate 11:30am
JPY BOJ Outlook and Monetary Policy Statement Tentative
EUR Monetary Policy Statement and Main Financing Rate 11:45pm
EUR ECB Press Conference 12:30am
USD Philly Fed Manufacturing Index and Unemployment Claims 12:30am
–
SPI200 INTRADAY LEVELS TO WATCH
