The Morning Jumpstart Macro View


  • SPI200 (Jun) overnight futures up 58 pts to 7148
  • SP500 up 3.23 pts to 4204.11
  • NASDAQ Composite up 12.46 pts to 13748.74
  • Dow Jones up 64.81 pts to 34529.45
  • FTSE100 up 2.94 pts to 7022.61
  • DAX30 up 113.25 pts to 15519.98
  • GOLD futures US session (Aug) up $7.80 to $1906.30 an ounce
  • COPPER futures US session (Comex July) up $0.0088 to $4.6718 a pound
  • OIL futures US Session (Nymex July) down $0.53 to $66.32 a barrel
  • CRB Index down 0.08 pts to 205.70
  • AUDUSD trading at 0.7712
  • EURUSD trading at 1.2192
  • GBPUSD trading at 1.4188
  • USDJPY trading at 109.8500
  • USD Index US Session (ICE Jun) up 0.081 to 90.040

US indexes ended the week with minor gains in a relatively range bound session on Friday. Data released prior to the US open showed that inflationary concerns remain as consumer spending rose for the first quarter at an 11.3% annualized rate. The reading was stronger than analysts expected which capped the bulls for the session although leading up to the data release, Fed members had many times re-assured the market that they will continue with support until employment targets are reached. The Benchmark 10-year Bond yield moved lower which took the heat out of the USD rally and any concern of a selloff into the long weekend. Bonds may have already factored inflation expectations into price and will be focused on whether the economy sees lingering high inflationary pressures to force a rate rise earlier than anticipated versus the Feds expected ‘spike’ in inflation readings before they ease. Either way the Fed has hinted at a possible start to talks about tapering stimulus. The DOW closed up 0.41% while the broader SP500 ended up 0.12% and the Nasdaq closed down 0.01% for the session. In Europe, major Indexes rose with Bank stocks performing well on expectations for an environment of higher inflation. Data showed that economic sentiment improved by more than expected with the strongest gains in services, retail and among consumers as governments eased pandemic restrictions.

Markets had to digest the prospect of more liquidity into the US economy and more upward pressure on inflation after a report said US President Biden will seek $6 trillion in federal spending for 2022. In his budget, the general theme was to spend now while the cost of funding is cheap and worry about deficits later…potentially when it not his problem any longer. The budget of course faces strong opposition from Republicans who want to reduce government spending and reject tax hike plans.

The USD Index initially spiked on the back of the release but then came straight back down to where it started into the US close as bond prices edged higher. The Dollar reaction was generally a squeeze on short sellers but does open the door for a bigger corrective move up in the near term if support at 89.650 holds. If price remains capped below the 90.300 area, then we may see sellers build again for a test of lows around 89.650 where we would expect to see bulls again defend the level. Either way the argument for both sides remain convincing which may lead to range bound action for the short term. The EURUSD spiked lower on the USD move but it too reversed the move to make back the losses into the US close. European bond yields inched higher which supported the Euro although price has now broken out of the downside of the up-trending channel that will cool bullish action for now. If price remains capped at 1.2215 then expect to see more sellers jump into the action for a move lower to test the bulls resolve. The GBPUSD found some support following a hawkish comment from a Bank of England official suggesting rates could be hiked sooner rather than later. Price again found sellers into major a resistance zone but also held a minor higher level around 1.4136. We expect to see a flush of recent buyers for a grind lower but will be watching for a move up through 1.4200 lead to a spike higher. The AUDUSD found some weakness in the European session to hold lower highs and then later spike down through 0.7700 before bouncing into the close. Price will need to hold above the level today to fend off a bigger squeeze lower. The USDJPY spiked higher into the US data release to trap some buyers off support before falling back down. The lack of follow through suggests that bulls may have run out of steam in the near term. If price holds below the 109.900 level today, we expect to see another squeeze lower to flush out more buyers through 109.730.

SPOT GOLD did well to initially flush out some buyers on a grind lower before ending the session on a positive note. We expect that the move higher into the close will support further bullish action which is confirmed but the lack of a move lower in Bonds. We will be watching now for further evidence that bulls are in control in the form of a higher low. Aussie gold also had a strong night and is in a well established uptrend so expect to see some love into local gold producers today. Crude Oil saw a bit of a choppy session with bulls failing to push into new highs as the USD also chopped around. Longer term the bulls remain in charge but price will need to do more work around the 66.50 level to convince new buyers to get involved in the action. If the 65.40 area holds, then we expect to see come consolidation around 66.50. Copper initially came under pressure from the early strength into the USD but bulls managed to defend a higher low around 4.5645 to push price back up into the close. The price action looks strong and we expect that the demand will only increase and pressure prices higher in the near term as Global economies remain on a strong footing.

Cryptocurrencies had a bit of a choppy weekend to put bulls under some pressure before fighting back Sunday evening to generally make back the losses in to the start of the new week. Bitcoin is currently trading at $35934.4 up 4.32% while Ethereum is at $2427.35 up 6.52% and Ripple is at $0.90911 up 10.67%, in the last 24 hours.

The ASX200 rallied hard from the open Friday and managed to hold the gains into the close ending the week on a very positive note with the index up 84.6 points to 7179.5 less than 20 points from making new all time highs. It was generally a green day across the board with only the Gold and IT sectors ending with minor losses although we would expect to see Gold fight back today. The bulk of the heavy lifting was done in Metals and Mining, Resources and Materials stocks. The Nikkei ran hard Friday to end up around 2% for the day while the Hang Seng gave up most of the early gains into the close to end up just in the green.

The ASX200 is expected to open up 5 points after the SPI200 gave back the early gains from the European session into the US close.


AUD MI Inflation Guage 11am

CNY Manufacturing and Non-Manufacturing PMI 11am

AUD Private Sector Credit 11:30am

JPY Consumer Confidence 3pm

EUR German Prelim CPI All Day

GBP Bank Holiday

USD Bank Holiday