Morning Jumpstart Macro View 28/09/21

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  • SPI200 (Dec) overnight futures down 42 pts to 7311
  • SP500 down 12.37 pts to 4443.11
  • NASDAQ Composite down 77.73 pts to 14969.97
  • Dow Jones up 71.37 pts to 34869.37
  • FTSE100 up 11.92 pts to 7063.40
  • DAX30 up 42.13 pts to 15573.88
  • GOLD futures US session (Dec) down $1.90 to $1749.80 an ounce
  • COPPER futures US session (Comex Dec) down $0.0058 to $4.2797 a pound
  • OIL futures US Session (Nymex Nov) up $1.47 to $75.45 a barrel
  • CRB Index up 2.93 pts to 228.24
  • AUDUSD trading at 0.7285
  • EURUSD trading at 1.1699
  • GBPUSD trading at 1.3703
  • USDJPY trading at 110.9900
  • USD Index US Session (ICE Dec) up 0.080 to 93.415

US indexes were mixed with the Nasdaq lower which weighed on the broader market SP500 while the DOW was higher. US short term bond yields continue to rally pushing bond prices down which weighed on tech stocks as bets that a higher cost of debt is on the way. Bond prices look set to continue the push lower which would pressure the Nasdaq further as tech stocks generally have much higher valuations so any rate rise will put the breaks on growth which is largely already baked into price. The Fed officials continue to point to employment as the key for tapering and stick to their goals of full employment…so the jobs report next Friday is the next key data release which could trigger tapering. Evergrande woes eased as Chinese authorities decided to pump in more cash yesterday to offset any fallout from the real estate firm. The DOW closed up 0.21% while the broader SP500 ended down 0.28% and the Nasdaq closed down 0.52% for the session. In Europe, major Indexes edged higher as Germany was relieved to avoid a pure left wing coalition government. Both the DAX and FTSE gave up opening gains and moved lower through the session which shows that both will need to do some more work to build a base before bulls can push prices higher. The gains in banks and energy offset losses into tech.

In US Government shutdown news, senate Republicans have blocked a Democrat bill that will avert a partial Government shutdown and suspend the debt limit.

The USD Index was well supported on inflation, rate rise and tapering expectations. Price was supported by higher bond yields which are expected to continue higher potentially dragging the USD with it. The Dollar continues to hover around the 93.400 zone holding minor higher levels so expectations are still for an extension higher to test into 93.720. The EURUSD found further resistance at 1.1725 to cap buyers early and push price lower into the European open. Sellers again a lower high and resistance at 1.1710 into the US close which could trigger more sellers into action today for a move below 1.1684. The GBPUSD held the 1.3660 level and up off the major support zone around 1.3600. Price action still remains uncertain as it also held a lower high into 1.3730. Bulls will be watching current levels to see if price can hold up off 1.3680 and start a leg higher to test/break 1.3750. The AUDUSD was contained but with a bullish bias as price rejected a move lower at 0.7250 and confirm a higher low. For now major support around 0.7222 is holding and I expect to see buyers flush up through the 0.7295 area on a stop loss hunt today as bulls will find support in Evergrande news. The USDJPY continued to chug higher as stops were triggered above the 110.800 level. Expecting the trend up to continue in the short term as the dollar continues to find strength with the next major level up around 111.700.

SPOT GOLD is caught between continued inflation concerns from traditional bulls and the rise in the USD which is holding prices down. Gold did break up through 1756 but more to clear out stop losses than a start to a leg up so watching to see if lows around 1745 come under fire or whether price sees a slow grind higher today. Crude Oil continued to be bid higher as traders expect that inflation will prove to be resilient and around for longer than expected. Price is now up at daily resistance around 75.50 which may slow the move up and trigger some profit taking from buyers. Copper was weighed down by the rally into the USD although buyers are resilient for now as inflation remains persistent. If price can push up through 4.3045 then I expect continuation higher. If not, there will be a bout of profit taking on the cards.

Cryptocurrencies drifted lower from the start of the Asian session and into the US close. Prices continue to look heavy across the board so we expect that support levels will be tested. Bitcoin is currently trading at $43059.80 down 1.16% while Ethereum is at $2994.44 down 2.97% and Ripple is at $0.93660 down 1.00%.

The ASX200 started the new week on a strong note yesterday as the bulls opened the action higher and held the gains into the close. The index ended the day up 41.6 points to 7384.2 with the bulk of the gains in the Energy, Financial and Telecom Services sectors. Falling stocks outnumbered advancing ones by 731 to 624 and 415 ended unchanged. The Hang Seng was higher even as concerns persist over a power supply crunch in China triggering industrial contraction and lower the economic outlook.

The ASX200 is expected to open down 40 points after the SPI200 fell away from the days highs in overnight trading.


AUD Retail Sales 11:30am

JPY BOJ Core CPI 3pm

EUR German Consumer Climate 4pm

EUR ECB President Lagarde Speaks 10pm

USD Goods Trade Balance and Prelim Wholesale Inventories 10:30pm

USD Fed Chair Powell Testifies and Consumer Confidence 12am

USD FOMC Member Bowman Speaks 3:40am

USD FOMC Member Bostic Speaks 5am


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