Morning Jumpstart Macro View 21/10/21

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  • SPI200 (Dec) overnight futures up 12 pts to 7396
  • SP500 up 16.56 pts to 4536.19
  • NASDAQ Composite down 7.41 pts to 15121.61
  • Dow Jones up 152.03 pts to 35609.34
  • FTSE100 up 5.57 pts to 7223.10
  • DAX30 up 7.09 pts to 15522.92
  • GOLD futures US session (Dec) up $14.60 to $1785.10 an ounce
  • COPPER futures US session (Comex Dec) up $0.0398 to $4.7428 a pound
  • OIL futures US Session (Nymex Nov) up $0.91 to $83.87 a barrel
  • CRB Index up 2.10 pts to 240.35
  • AUDUSD trading at 0.7519
  • EURUSD trading at 1.1650
  • GBPUSD trading at 1.3826
  • USDJPY trading at 114.3200
  • USD Index US Session (ICE Dec) down 0.126 to 93.602

US indexes were mixed with the DOW and SP500 ending with gains while the Nasdaq was weighed down from the open. Both the DOW and SP500 are set to break into new all time highs as traders continue to focus on earnings. Companies so far have been highlighting supply chain issues and higher costs, although they have been able to maintain profit margins and pass on costs to customers much to the relief of investors. So far in earnings, 85% of companies who have reported have beaten expectations. The Fed said that US employers reported ‘significant increases in prices and wages even as economic growth decelerated’. They also mentioned that so far strong demand from consumers meant companies could raise selling prices to cover higher labour costs from wage increases designed to lure in workers…with many expecting prices to remain high or even increase further. Expectations are now for earnings to continue along the same lines and traders to be risk on into shares as inflation concerns take a back seat with Bond yields making new short term highs. The DOW closed up 0.43% while the broader SP500 ended up 0.37% and the Nasdaq closed down 0.05% for the session. In Europe, major Indexes were well contained as traders contended with some mixed earnings reports and rising bond yields. Many see that earnings will be hard to beat and are tentative with stimulus set to be withdrawn, China slowdown concerns and headwinds of higher interest rates.

The USD Index was higher into the European session before running into more selling during the US session. Price pushed back down to lows around 93.500 before finding some buyers into the US close. The continued risk on sentiment into the share market weighed on the dollar. It still seems that longer term buyers are being squeezed out of the dollar prior to another leg higher on the back of rising interest rate expectations. Traders seems to be pricing in more aggressive Feds in Europe and the UK than the US which is one reason longs bets into the USD are being paired back for now. The EURUSD continues to enjoy the USD weakness and rallied back up into the 1.1660 zone. Traders may be focusing also on rising rates in Europe which offsets the enthusiasm for the USD. For now, momentum is waning into 1.1660 so we may see a flush of buyers and squeeze lower. The GBPUSD was initially moving lower through the European session before doing an about face to spike straight back up and end on session highs. Traders are still expecting rate rises for the Pound even after CPI data showed that inflation may have plateaued. The Pound may be targeting the 1.3900 zone in the coming sessions. The AUDUSD continued to be a risk on trade as commodities ramped up. The Aussie initially flushed below 0.7478 before moving higher into the US close. Traders will be targeting an extension to the move up into 0.7560. The USDJPY managed to flush up through the 114.500 level as expected but did find the weight of the USD pullback too much and gave back a lot of the gains. Price still is holding above the 114.000 level to hold the trend up in tact. If price holds below 114.350 today, expecting to see a grind lower but if the level breaks, then a move up into 114.500 is on the cards.

SPOT GOLD found some buyers on the back of the USD weakness. Price held above the 1768 level early in Asian trade and made its way above 1785 before finding sellers cap the rally. There is some technical divergence showing that may bring in some fresh sellers and trigger some profit taking today if price can not move above 1788. Aussie gold continues to look weak and struggle with the AUD rally. Crude Oil is an out of control beast at the moment with shorts continually being toyed with and trapped before price is driven higher. Price moved down to 80.78 into the start of the US session to flush out previous minor lows, and then was quickly met with buyers who spiked price straight up into new highs. For now, you would have to be very brave to be on the short side. Copper was happy to move higher as the USD moved lower but the price action may be setting to hold a lower high for another squeeze down as price contracts off highs around 4.8125. Watching to see if 4.7500 caps buyers today.

Cryptocurrencies were higher across the board as the rally into Bitcoin flows over into the other crypto pairs as they play catchup. Bitcoin continues to charge higher and is currently trading at $65978.80 up 2.79% while Ethereum is trading at $4084.52 up 6.92% and Ripple is at $1.13807 up 5.50%.

The ASX200 had a strong session yesterday to push straight up and through the 7400 level on the open and hold the gains into the close. The index ended the day up 38.80 points to 7413.7 with the IT, Financials and Industrials sectors leading the charge. Rising stocks outnumbered declining ones by 741 to 635 and 448 ended unchanged. The Hang Seng Index put in another good session ending up 1.35% while the Nikkei opened strong but faded all day to end up only 0.14%.

The ASX200 is expected to open up 15 points after the SPI200 again pushed higher in overnight trading.


AUD NAB Quarterly Business Confidence 11:30am

AUD RBA Annual Report Tentative

USD Unemployment Claims and Philly Fed Manufacturing Index 11:30pm

USD FOMC Member Waller Speaks 12am

AUD RBA Gov Lowe Speaks 6am


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