Morning Jumpstart Macro View 20/10/21

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  • SPI200 (Dec) overnight futures up 41 pts to 7383
  • SP500 up 33.17 pts to 4519.63
  • NASDAQ Composite up 107.28 pts to 15129.09
  • Dow Jones up 198.70 pts to 35457.31
  • FTSE100 up 13.70 pts to 7217.53
  • DAX30 up 41.36 pts to 15515.83
  • GOLD futures US session (Dec) up $4.20 to $1769.90 an ounce
  • COPPER futures US session (Comex Dec) down $0.0410 to $4.6845 a pound
  • OIL futures US Session (Nymex Nov) up $0.39 to $82.83 a barrel
  • CRB Index up 0.36 pts to 238.25
  • AUDUSD trading at 0.7475
  • EURUSD trading at 1.1634
  • GBPUSD trading at 1.3794
  • USDJPY trading at 114.3700
  • USD Index US Session (ICE Dec) down 0.167 to 93.778

US indexes again charged higher being supported by strong earnings expectations. Prices did not waste anytime and rallied right from the open after upbeat results from Johnson & Johnson and Travelers Cos with traders expecting more of the same positive results to come. Investors are happy to brush aside an eventual tightening in monetary policy even after Fed Gov Waller said officials may have got in wrong on inflation and that they may need to adopt “a more aggressive policy response” to control it…meaning rate rises. Traders may only start to get concerned if the Fed panics, but for now its ‘all in’ on stocks. Bond yields continue to be pressured higher and prices lower which highlights expectations for higher rates. Traders will be watching earnings closely, especially companies with exposure to more to supply chains issues and labour shortages, to see what affects it has on pricing power. The DOW closed up 0.56% while the broader SP500 ended up 0.74% and the Nasdaq closed up 0.71% for the session. In Europe, major Indexes managed to push higher thanks largely to the strength early in the US session (and late in European trade). The DAX and FTSE fended off early weakness on the back of some downbeat results with defensive stocks providing support. Traders will be watching earnings to see if negative affects from high energy prices and supply bottlenecks are weighing on corporate profits.

The USD Index broke down below 93.850 to put the squeeze on buyers. Pressure came from the fact that other currencies are setting to raise interest rates; namely Pound; while the US continue to hold off potentially to keep the USD lower. As the expectations grow for a rise in US interest rates, then expect the USD to gain back lost ground. A lot of the move down in the USD was attributed to technical liquidation of longs as bond yields were moving higher at the time. The EURUSD obviously spiked on the dollar weakness but later turned lower again as the Dollar bounced. The break higher on Euro will bring into question the recent downtrend so we may expect to see more chop and squeeze on sellers although longer term the USD should be supported and pressure Euro lower. The GBPUSD did not mess around and rallied up through 1.3773 highs to keep the trend up in tact. The next major level which Pound traders may be targeting as they extend on the rally is into the 1.3900 level but expect that any further Dollar strength will weigh on the rally. The AUDUSD also kicked higher as bulls took charge early to push price back above the 0.7415 level and later ramp up through previous highs around 0.7478. Bulls may flush the level today but I will not be surprised to see a bout of profit taking and squeeze lower. If not then a further extension to 0.7560 is on the cards. The USDJPY initially reacted lower to the weakness in the USD although the move down was quick to reverse and see the pair trade back up to where it started. The move shows the expectations for a higher USD and expected pressure on interest rate rises in the US. Watching to see if the USDJPY can hold a higher low above 114.000 to drag in some bulls for an extension up through 114.500.

SPOT GOLD again played with bulls emotions as price initially kicked higher into 1784 on USD weakness but then later reversed to end back below 1770. For now, Gold is hanging in there and fending off another move south but buyers do not look strong and I expect that their patients is wearing thin. Aussie Gold moved lower with the strength in the AUD which may pressure local gold stocks today. Crude Oil was not much more than a mess…as price flushed both sides of the market on a sharp move down through recent lows and then a spike straight back up to take out previous minor highs. The force is still strong with the bulls and they do not look ready to call it a day so the fact that the 81.30 zone held may see more buyers dragged in for another move up. Copper moved up into recent highs around 4.8125 in the Asian session before finding sellers to pressure price back down into the US close. The move confirms a technical double top so may see further profit taking from bulls and a deeper correction lower.

Cryptocurrencies were mixed with Bitcoin continuing to move higher and dragging Ethereum with it while other pairs found some weakness. The Strength in Bitcoin comes on the same day that the Bitcoin futures ETF gets publicly listed on the NYSE. Bitcoin is currently trading at $64229.0 up 4.56% while Ethereum is trading at $3817.81 up 1.87% and Ripple is at $1.08085 up 0.26%.

The ASX200 had a disappointing session for bulls yesterday as price spent most of the day in the green before falling 25 points in the final minutes into the close to end down 6.2 points to 7374.9. The 7400 level may prove to be a problem for bulls in the near term as investors were happy to take some risk off the table. It was a reverse of the previous session with the Metals and Mining, Resources and Materials sectors leading the index lower. Rising stocks outnumbered declining ones by 767 to 635 and 417 ended unchanged. The Hang Seng powered higher from the open ending up 1.49% while the Nikkei was up 0.66%.

The ASX200 is expected to open up 40 points after the SPI200 moved higher in overnight trade.


JPY Trade Balance 10:50am

EUR German PPI 5pm

GBP CPI Data 5pm

EUR Current Account 7pm

CAD CPI Data 11:30pm

USD Crude Oil Inventories 1:30am

USD Beige Book 5am


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