Morning Jumpstart Macro View 5/10/21

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  • SPI200 (Dec) overnight futures down 68 pts to 7176
  • SP500 down 56.58 pts to 4300.46
  • NASDAQ Composite down 311.22 pts to 14255.48
  • Dow Jones down 323.54 pts to 34,002.92
  • FTSE100 down 16.06 pts to 7011.01
  • DAX30 down 119.89 pts to 15036.55
  • GOLD futures US session (Dec) up $10.80 to $1768.80 an ounce
  • COPPER futures US session (Comex Dec) up $0.0493 to $4.2378 a pound
  • OIL futures US Session (Nymex Nov) up $1.71 to $77.59 a barrel
  • CRB Index up 2.70 pts to 233.08
  • AUDUSD trading at 0.7288
  • EURUSD trading at 1.1620
  • GBPUSD trading at 1.3610
  • USDJPY trading at 110.9200
  • USD Index US Session (ICE Dec) down 0.237 to 93.810

US indexes were down on negative sentiment tied to the debt ceiling as polies leave it to the last minute as they do what they do best…argue and disagree. I suspect it is just the opposition Republicans doing what opposition governments do best…reject everything but eventually agree as not raising the debt ceiling is really not an option. The NASDAQ was weighed down, which in turn weighed on the broader market, by a Facebook outage which has seen Facebook (down 4.9%), Whatsapp and Instagram shut down for hours now….all the millennials must be up in arms and ready to riot. US 10-year Bonds edged lower through European trade then found some buyers on the debt ceiling concern to be buoyed in US trade and in turn weigh on shares especially tech. China and US tensions again spark concern and minor risk off with traders as tariffs are expected to be unwound although hinges n Beijing keeping its promises and not pouring billions of dollars of state subsidies into its semiconductor, steel and other industries. The DOW closed down 0.94% while the broader SP500 ended down 1.30% and the Nasdaq closed down 2.14% for the session. In Europe, major Indexes were also down as global risks to stock markets continued to grow and pressure risk appetite. Europe was weighed down by tech shares as bond yields again ticked higher. Supply chain issues continued to weigh and traders are setting for a turbulent October.

US Non-farm Payroll data out Friday is the key focus after the US Fed has signalled that they will likely begin reducing its monthly bond purchases as soon as November. A hit to new jobs numbers could change the outlook and see traders reposition or at least close some long USD/Short Bond positions.

The USD Index continued to be pressured lower in European trade as Bond prices reacted up off support. The move in the dollar suggests that Bonds may look to have another minor leg higher ahead of the US employment data Friday. Expecting to see some chop ahead of the numbers as traders position themselves ahead of the release. For now price is being held down at 94.093 and found minor support at 93.670. The EURUSD managed to squeeze out some sellers as price ramped up through 1.1607 minor resistance. Expecting that shorts were happy to take some risk off the table into support and re-assess the USD action ahead of Fridays employment release. The GBPUSD added to the recent gains with a strong rally overnight. Price extended up into the 1.3615 zone before easing into the US close. Expecting to see a pullback as price is extended and will need to squeeze some buyers if it is to again go higher. The Pound is also expected to be weighed down by continued Energy concerns. The AUDUSD saw some chop through Asian trade and into the start of the European session as buyers defended the 0.7250 zone. Price then ramped up as the USD fell and looks set to extend on the gains above 0.7300 today. The USDJPY showed some signs of buying support off 110.700 but continued USD weakness continued to weigh on the currency pair. Still expect the USDJPY to extend lower today to flush out some buyers but will again find support if the USD holds up off overnight lows.

SPOT GOLD was a seesaw overnight with price initially flushing lower to target stops below 1750 and then ramped straight back up at the start of the US session to take out resistance. Now that support and a higher low has built, expecting to see Gold push higher into the 1780 area being anchored at 1750. Crude Oil rallied on the back of news that OPEC decided to stick to their current output levels. Many expected that OPEC would up the anti and raise output as global demand levels rise so were caught out on the wrong side of the action. Price continued the short term move higher and has now cleared longer term Daily highs from Oct 2018 so could build some momentum. Copper had a big session as price was initially weak through Asian trade, but supported at 4.1820, before ramping higher in US trade. Price flushed resistance at 4.2815 before retracing some of the move into the US close. If price can again find a bid, expect to see the 4.2815 zone broken on another rally.

Cryptocurrencies generally were bid up in the US session to hold up off minor support levels although trade was a little choppy and unconvincing after the recent run higher. Bitcoin is currently trading at $49084.10 up 1.35% while Ethereum is at $3392.07 down 0.93% and Ripple is at $1.03773 down 2.50%.

The ASX200 roundabout continues as price was strong from the open yesterday and held the gains into the close to reverse most of Fridays weakness. The index ended the session up 93.0 points or 1.29% to 7278.5 with Financials and Consumer Discretionary leading the way. Rising stocks outnumbered declining ones by 746 to 604 and 394 ended unchanged. Asian markets were lower with both the Hang Seng and Nikkei coming under pressure down 2.19% and 1.13% respectively as Evergrande continues to weigh.

The ASX200 is expected to open down 65 points after the SPI200 was weighed down in overnight markets.


CNY Bank Holiday

AUD Retail Sales and Trade Balance 11:30am

AUD RBA Statement and Cash Rate 2:30pm

JPY BOJ Gov Kuroda Speaks Tentative

USD ISM Services PMI 1am

EUR ECB President Lagarde Speaks 2am

USD FOMC Member Quarles Speaks 4:15am


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