Morning Jumpstart Macro View 6/10/21

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  • SPI200 (Dec) overnight futures up 36 pts to 7253
  • SP500 up 45.26 pts to 4345.72
  • NASDAQ Composite up 178.35 pts to 14433.83
  • Dow Jones up 311.75 pts to 34,314.67
  • FTSE100 up 66.09 pts to 7077.10
  • DAX30 up 157.94 pts to 15194.49
  • GOLD futures US session (Dec) down $7.40 to $1760.20 an ounce
  • COPPER futures US session (Comex Dec) down $0.0557 to $4.1828 a pound
  • OIL futures US Session (Nymex Nov) up $1.55 to $79.17 a barrel
  • CRB Index up 2.71 pts to 235.79
  • AUDUSD trading at 0.7289
  • EURUSD trading at 1.1596
  • GBPUSD trading at 1.3622
  • USDJPY trading at 111.4800
  • USD Index US Session (ICE Dec) up 0.213 to 93.993

Millennials breathed a sigh of relief as US indexes came bouncing back thanks to big tech supporting the bulls after Facebook came back online and get life back to normal. Dip buyers were out in force again to support the action although the dips are slowly getting smaller. Senate will vote later tonight on a measure to suspend the US debt ceiling so that gives Politicians more time to get their new suits dry cleaned for the cameras. We may see some volatility if they again disagree but expect that there remains no option but to increase the debt level. Data out on US services came out stronger than expected which adds more weight to the Feds ‘sooner rather than later’ tapering expectations. Employment data out Friday is expected to be stronger than the previous month and show continued improvement in the Labour market which pushed Bond yields higher overnight on increasing inflation concerns. The DOW closed up 0.92% while the broader SP500 ended up 1.05% and the Nasdaq closed up 1.25% for the session. In Europe, major Indexes were led higher by a bounce in tech and buying into Banks as traders focus on inflation fuelled partly by record Gas prices. Germany’s 10-year Bund yield rallied as rising oil prices stocked inflation concerns.

The USD Index edged higher and held minor support at 93.670 and then up at 93.830. Sellers did cap the action into 94.050 so expecting to see some more ranging action into Fridays employment data. Price may again flush lower but expecting bulls to again provide support especially if Bond yields rally. The EURUSD was choppy as price was pushed back down into recent lows below 1.1600. Price found support at the 1.1586 zone so expecting this level to hold although sellers are still in force for now pressuring prices as long as the USD holds up. The GBPUSD is not showing any concern at the moment as price adds to recent gains and presses higher. The Pound held support at 1.3584 to push into new short term highs although it did lack conviction as the buying into the USD weighed. Traders may have shifted focus from fuel shortages and supply issues to expectations that the BOE will hike interest rates. The AUDUSD saw a tail of two sessions with price moving lower in Asian trade before turning sharply to rally and make back the losses into the US close. Price again found support at 0.7250 to continue the recent trend higher. Expecting to see an extension and squeeze on sellers into 0.7310 resistance. The USDJPY brushed aside weakness early into the start of the Asian session yesterday and rallied up off support into the US close. For now, expecting to see the pair test into 111.300 before grinding higher as the USD holds recent gains.

SPOT GOLD retested the 1750 support area to clear out some buyers before bouncing off the level into the US close. Bulls were pressured by rising bond yields and higher expectations for inflation. Gold bugs will want to see the 1750 level hold and buyers are defending the level for now. Crude Oil continued to charge higher to fuel inflation concerns which is in turn fuelling demand expectations for the commodity. The rally is being anchored at 77.50 and has now well and truly cleared daily resistance so expect to see continued support on dips especially as the energy issues for some countries persist. Copper could not add to the recent rally and instead gave back more of the gains as price was pressured by the Dollar rally. It seems that Copper is looking to further strength into the USD as the move lower was a little out of proportion to the USD move higher. The key level today is the 4.2135 level to either hold the action down or break and see a squeeze on sellers.

Cryptocurrencies generally added to recent gains with Bitcoin leading the charge as price cracked above the $50K level. Bulls will be licking their lips and watching for a break of the $53K level for a push to test all time highs. Bitcoin is currently trading at $51158.20 up 3.69% while Ethereum is at $3496.53 up 3.37% and Ripple is at $1.07210 up 2.61%.

The ASX200 had a mixed day yesterday with weakness early in the session before buyers fought back and rallied into the close. Still, the index ended down 30.1 points to 7248.4 with shares in IT, Consumer Discretionary and Telecoms Services sectors dragging the action down. Falling stocks outnumbered advancing ones by 986 to 419 and 359 ended unchanged. The RBA left rates at 0.10% in line with expectations with Governor Lowe reiterating that the cash rate ‘will not be increased until inflation is sustainably within the two to three per cent target range’.

The ASX200 is expected to open up 35 points as the SPI200 rallied overnight along with the US.


CNY Bank Holiday

NZD Official Cash Rate and Rate Statement 12pm

EUR German Factory Orders 5pm

EUR Retail Sales 8pm

USD ADP Non-Farm Employment Change 11:15pm

USD Crude Oil Inventories 1:30am


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