Morning Jumpstart Macro View 22/10/21

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  • SPI200 (Dec) overnight futures up 2 pts to 7389
  • SP500 up 13.59 pts to 4549.78
  • NASDAQ Composite up 94.02 pts to 15215.70
  • Dow Jones down 6.26 pts to 35603.08
  • FTSE100 down 32.80 pts to 7190.30
  • DAX30 down 50.36 pts to 15472.56
  • GOLD futures US session (Dec) down $1.20 to $1783.70 an ounce
  • COPPER futures US session (Comex Dec) down $0.1762 to $4.5583 a pound
  • OIL futures US Session (Nymex Dec) down $0.75 to $82.67 a barrel
  • CRB Index down 3.75 pts to 236.60
  • AUDUSD trading at 0.7466
  • EURUSD trading at 1.1622
  • GBPUSD trading at 1.3791
  • USDJPY trading at 114.0200
  • USD Index US Session (ICE Dec) up 0.243 to 93.778

US indexes were mixed with the DOW ending flat while the SP500 and Nasdaq ended higher. Tech stocks supported the broader market after Tesla spiked on the open on the back of positive earnings. The DOW opened down but managed to make back the losses into the close and continue to hover around new all time highs. Traders remain nervous for higher interest rates as Bonds fall over and yields climb…the stock market may not be ready yet to react to falling bond prices as they remain focused on earnings. Industry heads are warning that inflation is far from transitory and prices will only go higher as energy, supply chains and labour constraint problems persist….leaves global Fed officials in an uncomfortable position…raise rates and choke off economic growth or let inflation continue to climb. The DOW closed down 0.02% while the broader SP500 ended up 0.30% and the Nasdaq closed up 0.62% for the session. In Europe, major Indexes were also weaker as traders took some risk off the table on inflation concerns. Buying into defensives and growth stocks helped offset losses in miners and some disappointing earnings forecasts.

The USD Index moved its way higher after an early retest of previous lows at 93.500. Bulls were supported by a fall in US unemployment claims and a rally in US bond yields. Risk sentiment was hit as earnings are showing that inflation is persistent which will eventually lead to higher interest rates and cost of debt. Expecting to see the USD index hold above the 93.500 level and squeeze out some sellers as bulls edge back into the action. The EURUSD took a bigger hit lower than the USD move would suggest. Price initially trapped some buyers early in Asian trade before falling over and trading into lows around 1.1620. Bulls will want to see price hold above this level otherwise a lot more sellers may be triggered into action. The GBPUSD also came under pressure as the USD rallied but was more contained than the Euro as price holds the recent trend up. The problem for bulls is the failure off 1.3835 that will be making sellers nervous and trigger happy. If Price can hold above 1.3774 then we may see bulls fight back with rate rises their focus. The AUDUSD made an early run into the 0.7540 zone before failing miserably in a risk off tone. The move lower broke the recent uptrend and pushed price lower into the US close. Expecting to see some follow through from sellers early in Asian market trade and for price to hold below 0.7500. The USDJPY took a hit as the rally into the USD was offset by safe haven YEN buying as bulls get nervous. Price could pick up steam on the down side as there is a lot of bullish fuel built up that may get squeezed back out…but it will depend on the USD in coming sessions.

SPOT GOLD continues to struggle with any USD strength as price action held below the 1787 zone. If the USD continues higher into the weekend, expecting to see Gold price fall below 1776 and potentially break down below 1770 to pressure bulls out of the market. Crude Oil is seeing the volatility lift as sellers pile in at highs…but someone does not want to see price break lower. Price spiked down on a bout of profit taking into 80.80 where it was again ramped back up as it was in the previous session. The move will be making bulls nervous but the continued energy crisis will be supporting the action for now. The obvious line in the sand is 80.80. Copper is now showing a confirmed pullback off highs as price held a lower high at 4.750 and was pressured lower from the start of the Asian session on the USD rally. The recent move down is extended so may see some bargain hunting today but this will depend on the USD move and whether it will continue higher.

Cryptocurrencies took a hit in the European session and saw some profit taking from the recent strength to run lower into the US close The weakness was triggered by a flash crash on the Binance exchange that saw Bitcoin down 87% and was attributed to a bug in an institutional trader’s algorithm. Bitcoin is currently trading at $62548.50 down 5.78% while Ethereum is trading at $4067.15 down 0.88% and Ripple is at $1.09388 down 4.76%.

The ASX200 had a yo-yo of a session yesterday with price initially rallying just after the open and then falling straight back down into the close. In the end the index barely closed in the black, only managing to end up 1.7 points to 7415.4. The best performing sectors were the A-Reits, IT and Financials and falling stocks outnumbered advancing ones by 737 to 664 and 403 ended unchanged. The Nikkei took a hit late in the session to end down 1.87% while the Hang Seng faired better down only 0.45%

The ASX200 is expected to open up 5 points after the SPI200 continued lower through European trade before finding some minor buying into the US close to end flat.


AUD Flash Manufacturing and Services PMI 9am

JPY CPI Data 10:30am

GBP Retail Sales 5pm

EUR French Flash Manufacturing and Services PMI 6:15pm

EUR German Flash Manufacturing and Services PMI 6:30pm

GBP Flash Manufacturing and Services PMI 7:30pm

CAD Retail Sales Data 11:30pm

USD Flash Manufacturing and Services PMI 12:45am

USD Fed Chair Powell Speaks 2am

USD Treasury Currency Report Tentative


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