Morning Jumpstart Macro View 13/10/21

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  • SPI200 (Dec) overnight futures up 14 pts to 7261
  • SP500 down 10.54 pts to 4350.65
  • NASDAQ Composite down 20.27 pts to 14465.93
  • Dow Jones down 117.72 pts to 34,378.34
  • FTSE100 down 16.62 pts to 7130.23
  • DAX30 down 52.27 pts to 15146.87
  • GOLD futures US session (Dec) up $5.70 to $1761.40 an ounce
  • COPPER futures US session (Comex Dec) down $0.0463 to $4.3202 a pound
  • OIL futures US Session (Nymex Nov) up $0.01 to $80.52 a barrel
  • CRB Index down 0.48 pts to 235.87
  • AUDUSD trading at 0.7352
  • EURUSD trading at 1.1532
  • GBPUSD trading at 1.3591
  • USDJPY trading at 113.6100
  • USD Index US Session (ICE Dec) up 0.197 to 94.523

US indexes edged lower in choppy trade as prices swung between gains and losses for the session. Traders remained cautious ahead of earnings and as minor employment data suggested that the labour market is tightening up. Banking stocks will be in focus in the next session as earnings kick off with the big boys JPMorgan then Citigroup and Bank of America. It will be interesting to see investor reaction to earnings as banks are up around 40% for the year and have a favourable outlook with rising interest rate expectations. On the flip side, bit tech may come under pressure with the same outlook. US Fed members continue to highlight above trend inflation and supply chain issues hanging around longer than expected so traders will focus on the CPI numbers out tonight along with FOMC meeting minutes. Bond prices edged higher which may be some squaring up of positions ahead of the data releases. The DOW closed down 0.34% while the broader SP500 ended down 0.24% and the Nasdaq closed down 0.14% for the session. In Europe, major Indexes saw a weak start to the session as both the DAX and FTSE gapped down on the open catching bulls off guard. Inflation concerns continued to take a toll and energy prices weighed although the recent rally in commodity prices stalled and provided some minor relief intraday as bargain hunters pushed Indexes up off opening lows.

The USD Index was stronger and moved higher after the employment data release into the US open. Higher levels were continually supported as price makes its way up to the 94.600 resistance zone. Expecting that any pullback in shares will bring in some safe haven buying along with inflation bulls providing support. As tapering nears, expecting a grind higher into the USD with tomorrows CPI release expected to trigger volatility. The EURUSD traded to plan with a lower high holding around 1.1570 which dragged in sellers to push price lower. The Euro took a hit from the start of the European session as the USD rallied and then again over the US employment data release…again as the USD rallied. Expecting to see the move down extend again today ahead of US CPI tonight. The GBPUSD came under some pressure after local employment data failed to support the inflation narrative and European share markets opened weaker. Buyers did step in on spikes into 1.3570 but the selling pressure continued to cap rallies. All in all it was a choppy session and lacked direction for Pound traders but expect that any continued USD strength will only weigh on the Pound further. The AUDUSD marched higher late in the Asian session and into the European session but later came under pressure in US trade to give up any earlier gains. Expecting to see another flush lower below the 0.7343 level today to at least trap some sellers before another grind higher as the longer term trend up remains in tact. The USDJPY pushed into new short term highs but not before squeezing out some late buyers at the start of European trade. Price was quick to regain the lost ground and rally as the USD kicked higher. Even though price is extended, price still looks primed for another pop today and may want to crack the 114.000 level.

SPOT GOLD continued to be a mess for any possibility of a momentum trade as price remains in a choppy range between 1770 and 1750. Expecting that bias is turning up although a stronger USD is weighed on rallies. If price can break higher and hold a higher low convincingly, then expecting to see a choppy push above 1800….patients is the key for now. Crude Oil rallied stalled as price chopped around the 80 level leaving algos to fight it out. The overnight action suggests that price could just as easily take a hit on a long squeeze as it could rally for another leg higher so happy to watch this unfold as price is extended and I favour a pullback. Copper saw a yoyo session as price was hit in Asian trade before bouncing right back and then falling again into the US close. It seems that someone wanted price lower but ran into a few committed bulls. The 4.2815 level is key for buyers now and will need to hold to fend off some profit taking.

Cryptocurrencies came under pressure from the start of the US session as share markets moved lower. Bitcoin played catchup and was one of the hardest hit as recent buyers took some risk off the table. Bitcoin is currently trading at $54762.00 down 4.75% while Ethereum is at $3459.08 down 1.64% and Ripple is at $1.08412 down 3.98%.

The ASX200 yesterday was pretty much a mirror image of Monday with an early rally and then fade into the close to end down 19.1 points to 7280.70. A lift in commodity prices boosted mining stocks early although they could not hold onto the gains and weighed on the Index while Financials provided some support as Aussie bond yields remained elevated.

The ASX200 is expected to open up 15 points after the SPI200 held up well in a negative US session.


AUD Consumer Sentiment 10:30am

JPY Machine Orders 10:50am

EUR Final CPI 5pm

GBP Industrial and Manufacturing Production, GDP and Goods Trade Balance 5pm

EUR Industrial Production 8pm

USD CPI Data 11:30pm

USD 30-yr Bond Auction 4:01am

USD FOMC Meeting Minutes 5am

USD FOMC Member Brainard Speaks 7:30am


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