Morning Jumpstart Macro View 15/10/21

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  • SPI200 (Dec) overnight futures up 46 pts to 7335
  • SP500 up 74.46 pts to 4438.26
  • NASDAQ Composite up 251.80 pts to 14823.43
  • Dow Jones up 534.75 pts to 34,912.56
  • FTSE100 up 65.89 pts to 7207.71
  • DAX30 up 213.34 pts to 15462.72
  • GOLD futures US session (Dec) up $3.10 to $1797.80 an ounce
  • COPPER futures US session (Comex Dec) up $0.0963 to $4.6123 a pound
  • OIL futures US Session (Nymex Nov) up $1.01 to $81.45 a barrel
  • CRB Index up 2.43 pts to 238.13
  • AUDUSD trading at 0.7419
  • EURUSD trading at 1.1599
  • GBPUSD trading at 1.3677
  • USDJPY trading at 113.6800
  • USD Index US Session (ICE Dec) down 0.103 to 93.977

You can not keep a good Bull down as US indexes ramped higher overnight. Some strong bank earnings had investors cheering and diving into the action in anticipation for more good earnings news to come. Better than expected employment data out showed businesses are thriving which keeps the pressure on the rate rise narrative but traders brushed that aside for now as bond yields eased for a second session. With Oil rallying, inflation issues will persist eventually leaving the Fed with no choice but to raise rates and therefore the cost of borrowing to dampen the bullish sentiment….but for now, bulls expect to enjoy more good earnings and demand higher guidance to justify higher levels. The DOW closed up 1.56% while the broader SP500 ended up 1.71% and the Nasdaq closed up 1.73% for the session. In Europe, major Indexes were all one way action from the open as prices trended higher all session. Traders were also buoyed by expectations for a steady economic recovery, led by persistent Fed support, to flow over into strong earnings. As in the US, Inflation concerns from spiking energy prices, were brushed aside as bulls jumped into shares expecting to see a rally into Christmas.

The USD Index continued the move lower for a second session as more buyers were squeezed out of the action as bond yields fell. As I mentioned in the previous morning jumpstart, nothing has changed with regards to the inflation narrative (its even getting louder with rising energy prices) so I expect that the current pullback is a longer term pause to squeeze out buyers before another run higher. As inflation persists, the USD will be favoured over other currencies on rate hike expectations so watching for a base to build in the dollar. The EURUSD also continued on with its move from the previous session to ramp higher and squeeze out more sellers. Depending on what the USD does, the Euro may want to flush out more sellers before again heading lower once more dollar strength kicks back in. The GBPUSD did not want to miss out on the action and also kicked on higher into resistance around 1.3735 before the bounce in the USD saw some profit taking from buyers into the Pound. Like the Euro and the USD, the late reaction (up in the Dollar and down in Euro and Pound) suggests that buyers are not comfortable being long against the USD. The AUDUSD continues to be on a tear higher being supported by dollar weakness and risk on into commodities. Price is hovering around previous resistance at 0.7415 but if bulls get excited today, then we may see an extension into previous highs around 0.7470. The USDJPY consolidated around the previous sessions highs as the Dollar gave up more ground to sellers. Price action is held between 113.780 and 113.20 for now so expecting highs to be flushed today to trigger some stop losses as USDJPY shows that it too is expecting more dollar strength. Next levels on the upside are 114.520 then up to 118.290.

SPOT GOLD managed to fend off bears for now as price pushed up through 1795 in European trade. The move up was not so convincing as price ran into selling pressure just above yesterdays highs. Still, bulls may want to extend the rally into the 1806 resistance zone as long as they can hold above 1788. Aussie gold came under pressure from the AUD rally. Crude Oil kept sellers at bay and managed to end near session highs. I expect that the trend up is still well and truly in tact as price held a higher level at 80.35 and is set to push through 82 into new short term highs. Copper continued to extend higher as the USD edged lower. Price extended on the previous sessions gains to push up into highs from July around 4.6270. Expect that any dollar strength will see a wave of profit taking into Copper but for now the action up is being held at 4.5470.

Cryptocurrencies had a rather lacklustre session considering the strength into the US and European share markets. Ethereum was the big mover ramping up through resistance while Bitcoin was contained around previous highs. Bitcoin is currently trading at $57563.30 up 0.52% while Ethereum is at $3768.98 up 7.02% and Ripple is at $1.12652 up 1.25%.

The ASX200 may be setting up to end the week on a positive note after a solid session yesterday. The index opened up and kept the buying going into the close to end the day up 39.20 points to 7311.7. Shares in the IT, Gold and Metals and Mining sectors led the index higher while rising stocks outnumbered declining ones by 917 to 523 and 353 ended unchanged.

The ASX200 is expected to open up 45 points as the SPI200 ramped into new short term highs after the day session close.


EUR Italian Trade Balance and EUR Trade Balance 8pm

USD Retail Sales Data and Empire State Manufacturing 11:30pm

USD Prelim Consumer Sentiment 1am

USD FOMC Member Williams Speaks 3:20am


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