Morning Jumpstart Macro View 21/09/21

–

OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 21/09/21 (as at 8:35am AEDT)

• SPI200 (Sept) overnight futures down 98 pts to 7118
• SP500 down 75.26 pts to 4357.73
• NASDAQ Composite down 330.07 pts to 14713.90
• Dow Jones down 614.41 pts to 33970.47
• FTSE100 down 59.73 pts to 6903.91
• DAX30 down 358.11 pts to 15132.06
• GOLD futures US session (Dec) up $1.30 to $1765.10 an ounce
• COPPER futures US session (Comex Dec) up $0.0113 to $4.1363 a pound
• OIL futures US Session (Nymex Oct) up $0.33 to $70.62 a barrel
• CRB Index down 1.83 pts to 222.11
• AUDUSD trading at 0.7259
• EURUSD trading at 1.1729
• GBPUSD trading at 1.3664
• USDJPY trading at 109.4300
• USD Index US Session (ICE Dec) up 0.051 to 93.227

–

US indexes took a beating to follow in the footsteps of Asian and European markets. The three major Indexes saw some sharp buying into the close but I expect that it is more short covering than anything else as traders have some key data and news releases later in the week…namely FOMC release where they will be combing over the statement for any sign of tapering. I expect that some a lot of traders are setting for tapering and were forced to take some risk off the table overnight. On top of that there is the unknown contagion affect from Evergrande. Bonds also found some safe haven buying as yields fell and prices rallied. The USD weathered the storm pretty well which was interesting. The DOW closed down 1.78% while the broader SP500 ended down 1.70% and the Nasdaq closed down 2.19% for the session. In Europe, major Indexes also felt the heat from the weak Asian market session as the FTSE and DAX opened lower and never really looked back. Like the US, there was some short covering into the close which suggests traders are still awaiting data before committing to longer term shorts. In the past, shorts have been squeezed constantly which will be in the back of traders minds. If the flood gates open, then I expect to see a lower high hold which will drag in serious sellers.

The USD Index pushed into resistance around 93.400 before reversing the gains into the US close. I would have expected a bigger spike through the level if the market was in serious risk off mode. Expect that bigger players are waiting for news from the US Fed before hitting it hard…but it feels that everyone expects that the tapering timeline is narrowing. The EURUSD moved into support around 1.1700 before bouncing and squeezing out sellers. Price looks bullish for a continuation trade higher but may run out o steam pretty quick. The GBPUSD was pressured into support around 1.3640. It has been a strong move down from 1.3810 and, unlike the Euro, there was no love from bulls into the US close. The AUDUSD was hurt by the risk off sentiment and the pain into commodities. Price did make back the losses from the Asian market session so it will be interesting to see how bulls go today. The USDJPY was basically in freefall all Monday and held the losses into the US close. Safe have YEN buying outweighed the USD move up so there may be more to come today if share markets continue the move lower.

SPOT GOLD managed to push up off support more due to the USD move down and minor (traditional) safe haven buying as shares caught fire. If price can push up through 1767, more bulls may be triggered into action today. Crude Oil pushed below the 71.00 level during the European session but did find support into 69.65. We expect that OPEC would not want to see a meltdown so will be on guard. Price will need to hold above 69.50 for bulls to get excited. Copper continues to be in risk off mode and contract lower. The 4.2140 support level broke overnight so I expect that there may be more downside to come as more longer term buyers unwind long bets.

The ASX200 was hit hard in yesterdays session as a number of negative issues weighed on the market and saw bulls run for cover. Price broke down into a key level at 7200 on the ASX200 which it is expected to break today on the open. Do not expect a pretty day today and buyers, who previously provided support, may be very scarce as we all wait to see how the US handle trade tonight.

The ASX200 is expected to down 95 points after the SPI200 continued to take a beating overnight.

–

ECONOMIC DATA OUT TODAY (AEDT)

CNY Bank Holiday All Day

AUD Monetary Policy Meeting Minutes 11:30am

USD Building Permits, Current Account and Housing Starts 10:30pm

–

SPI200 INTRADAY LEVELS TO WATCH