Morning Jumpstart Macro View 19/10/21

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  • SPI200 (Dec) overnight futures down 20 pts to 7337
  • SP500 up 15.09 pts to 4486.46
  • NASDAQ Composite up 124.47 pts to 15021.81
  • Dow Jones down 36.15 pts to 35225.61
  • FTSE100 down 30.20 pts to 7203.83
  • DAX30 down 112.89 pts to 15474.47
  • GOLD futures US session (Dec) down $3.50 to $1764.80 an ounce
  • COPPER futures US session (Comex Dec) down $0.0185 to $4.7110 a pound
  • OIL futures US Session (Nymex Nov) up $0.02 to $82.30 a barrel
  • CRB Index down 1.38 pts to 237.89
  • AUDUSD trading at 0.7413
  • EURUSD trading at 1.1610
  • GBPUSD trading at 1.3728
  • USDJPY trading at 114.3300
  • USD Index US Session (ICE Dec) up 0.034 to 93.972

US indexes were mixed in the end with the DOW down and SP500 ending higher supported by big tech. FAANG stocks once again did the heavy lifting after a good product unveiling from Apple and Facebook jumping on positive news. The move up in tech pushed back against earlier gains in US bond yields through the European session as inflation concerns continue to bite. The bond market is slowly factoring in rate rises as New Zealand CPI number came out higher than expected and the BOE is priming to raise rates potentially this year. Expectations for more positive earnings reports is keeping the bears in check and risk on into the share market. The DOW closed down 0.10% while the broader SP500 ended up 0.34% and the Nasdaq closed up 0.84% for the session. In Europe, major Indexes were lower as luxury stocks took a hit from negative Chinese growth data. Indexes have had a good run higher the previous few sessions so a lot of the move down overnight could be chalked up to some profit taking especially when higher energy costs persist and rate rises linger.

The USD Index ended the session relatively flat after giving back early gains in the US session. Price rallied in Asian trade and early in Europe before moving lower into the open of the US session. Price found support again around 93.853 which traders will be watching to see if it holds today. Rising bond yields are providing support so inflation concerns should bring buyers back into the USD longer term even if price flushes below 93.853. The EURUSD took the opportunity to rally once the USD edged lower. Price rallied from the start of European trade into resistance around 1.1620 before finding some sellers into the US close. The longer term trend down remains in tact but buyers showed more confidence after price rejected a move below 1.1580. The GBPUSD worked its way lower off morning highs on a ‘buy the rumour sell the fact’ trade on rate hike news. Price saw some profit taking although the move down does not look bearish…more likely setting up for another push higher as a rate hike seems to be just around the corner. The AUDUSD pushed down off the 0.7415 zone in European trade but was quick to bounce back once the US opened and Indexes headed higher. The 0.7415 zone is key today so if it continues to hold, expecting to see another grind lower. If bulls step in early and hold above 0.7400, a further squeeze higher is on the cards up through 0.7420. The USDJPY was well contained and held in a tight range as the USD pushed into support. All eyes will be on the USD today, and by the looks of the USDJPY action, bulls expect the dollar to move higher.

SPOT GOLD buyers managed to fend off another leg lower as they defended the 1760 area in the European session. This may be a good sign for bulls with a potential short squeeze being on the cards. Still, I do not hold out a lot of hope for gold as rising US bond yields pressure the precious metal lower. Crude Oil finally flushed out some buyers with a move down off 83.00 overnight. Price broke below 92.35 and saw a quick move down to a potential bid zone at 81.50. The level will be key today to gauge the commitment of bulls. If they can defend the level, then expect another leg higher…if the level breaks convincingly, then expect to see a deeper corrective move lower. Copper also saw some weakness creep into price action to squeeze out some buyers who were late into the recent rally. The trend up remains in tact and the weakness can be attributed to some risk off from buyers so watching to see if price finds support at current levels or is eyeing off a deeper corrective move lower.

Cryptocurrencies came under some selling but still found some buyers happy to soak up the selling pressure. Bitcoin held the trend up after looking shaky early, which will no doubt give some confidence to bulls. Bitcoin is currently trading at $61380.50 up 1.43% while Ethereum is not so bullish trading at $3752.59 down 0.37% and Ripple is at $1.08254 down 2.36%.

The ASX200 had another up and down day swinging between gains and losses for the session. In the end it was the bulls who won out and pushed the index higher to close up 19.10 points to 7381.1. It was again the Materials, Metals and Mining and Resources sectors that supported the action after commodity prices did well Friday. Rising stocks outnumbered declining ones by 761 to 693 and 356 ended unchanged. China recorded its slowest pace of economic growth in a year being hurt by energy issues and concerns in property which weighed on the Hang Seng early although it was quick to bounce back into the close.

The ASX200 is expected to open down 20 points as the SPI200 continued to grind lower in the overnight session.


AUD Monetary Policy Meeting Minutes 11:30am

GBP BOE Gov Bailey Speaks 11:05pm

USD Building Permits and Housing Starts 11:30pm

USD FOMC Member Bowman Speaks 4:15am

USD FOMC Member Waller Speaks 6am


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