Morning Jumpstart Macro View 14/10/21

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  • SPI200 (Dec) overnight futures up 50 pts to 7282
  • SP500 up 13.15 pts to 4363.80
  • NASDAQ Composite up 105.72 pts to 14571.64
  • Dow Jones down 0.53 pts to 34,377.81
  • FTSE100 up 11.59 pts to 7141.82
  • DAX30 up 102.51 pts to 15249.38
  • GOLD futures US session (Dec) up $34.30 to $1793.60 an ounce
  • COPPER futures US session (Comex Dec) up $0.1680 to $4.4935 a pound
  • OIL futures US Session (Nymex Nov) down $0.09 to $80.55 a barrel
  • CRB Index down 0.17 pts to 235.70
  • AUDUSD trading at 0.7381
  • EURUSD trading at 1.1594
  • GBPUSD trading at 1.3661
  • USDJPY trading at 113.2800
  • USD Index US Session (ICE Dec) down 0.487 to 94.032

US indexes moved higher into the close being supported by big Tech on the Nasdaq. Inflationary data came out in line with expectations which gave the market a lift on hopes that the Fed support tap may not be turned off just yet. Major indexes did move lower from the open but it was not long until bulls wrestled back control to start the march higher into the close. The DOW even recovered from a 300 point opening selloff to end flat while the Nasdaq opened up and held the gains into the close. The 10-year Bond initially flushed lower to clear out some buyers after the number, then rallied as traders may have been expecting a better inflationary print and over factored it into price. It seemed to be a buy the rumour, sell the fact although longer dated bond yields ticked higher which shows traders expectations that inflation is more likely here to stay and not so transitory. Bank shares moved lower as traders were happy to lock in some gains as Fed officials remain divided on how much of a threat inflation will continue to be so gave no clear sign of a tapering timeline in the FOMC minutes. Traders will be focused on earnings now and more the forward guidance from companies than the results. The DOW closed down 0.01% while the broader SP500 ended up 0.30% and the Nasdaq closed up 0.73% for the session. In Europe, major Indexes also brushed aside inflation concerns and focused on local earnings data to end in the green.

The USD Index took a hit after the CPI release as traders may have been over bullish on USD prospects. It seems that buyers had factored in a stronger inflationary reading and expecting more bullish pressure and therefore were happy to lock in some gains into the Dollar. The longer term outlook has not really changed in terms of tapering and Fed rate rises but a firm timeline remains illusive. The dollar was due for a correction so now he question is whether we can expect a further flush lower in coming days or not. The EURUSD again moved in tandem with the USD but in the opposite direction. Price was already on the way up as traders had already decided to clear out some sellers. Price ramped up above the 1.1583 level late in the US session which may trigger sellers out of the action today. The GBPUSD also lifted early off support around 1.3575 and pushed up into recent highs around 1.3660. The Pound also had to contend with some mixed data on the European open but the numbers did little to deter bulls who were intent on pushing price higher. Price action now looks set to extend on the gains in coming sessions especially if the USD continues to squeeze lower. The AUDUSD did well to trap some sellers on the wrong side of the action before ramping higher gaining confidence from higher commodity prices. With the longer term trend up and the USD taking a breather, expecting further upside pressure on the Aussie. The USDJPY came under pressure from USD selling after the CPI release. With the recent strong rally running out of steam, traders may look to start locking some some profits and moving the USDJPY lower. A break of the 113.000 level will trigger some decent selling pressure as I expect there will be a few longer term stops below this level.

SPOT GOLD took the opportunity from the USD weakness to ramp higher through 1770 and just fell short of breaking the 1800 level. With bulls finally seeing some green on long positions, the move up could extend further although algo traders will be licking their lips and looking to squeeze out some buyers with the short term action being stretched. Crude Oil had a relatively tame session considering the moves in the USD and Gold. The pullback off the 82.00 zone continues as a lot of the higher demand expectations for the commodity is already factored into price. Copper did not waste any time moving higher once the USD came under selling pressure. Price ramped up right from the start of the Asian session and continued the push up into the US close. Price may look to extend on the move up today but price is extended which may keep new buyers on the sidelines for now.

Cryptocurrencies followed the share market lead and rallied up off lows made during the European session. Bitcoin pressed back up to recent highs and is currently trading at $57104.70 up 3.20% while Ethereum is at $3558.26 up 2.65% and Ripple is at $1.11025 up 1.79%.

The ASX200 was showed some uncertain trading yesterday as neither bulls nor bears were willing to commit to the action. The index ended the day down 8.2 points to 7272.50 after trading in positive territory twice during the session. Losses in Metals and Mining, Materials and the Resources sectors weighed most on the Index. Rising stocks outnumbered declining ones by 829 to 551 and 358 ended unchanged. The Hang Seng was closed due to the Typhoon Kompasu warning being upgraded to category 8.

The ASX200 is expected to open up 50 points after the SPI200 pushed up off support in overnight session.


AUD RBA Deputy Gov Debelle Speaks 9am

AUD Employment Change and Unemployment Rate 11:30am

CNY CPI ad PPI 12:30pm

GBP MPC Member Tenreyro Speaks 9:10pm

USD PPI Data and Unemployment Claims 11:30pm

USD Crude Oil Inventories 2am

USD FOMC Member Barkin Speaks 4am


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