Morning Jumpstart Macro View 25/10/21

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  • SPI200 (Dec) overnight futures up 30 pts to 7416
  • SP500 down 4.88 pts to 4544.90
  • NASDAQ Composite down 125.50 pts to 15090.20
  • Dow Jones up 73.94 pts to 35677.02
  • FTSE100 up 14.25 pts to 7204.55
  • DAX30 up 70.42 pts to 15542.98
  • GOLD futures US session (Dec) up $11.20 to $1793.10 an ounce
  • COPPER futures US session (Comex Dec) down $0.0558 to $4.5027 a pound
  • OIL futures US Session (Nymex Dec) up $1.26 to $83.76 a barrel
  • CRB Index up 1.08 pts to 237.68
  • AUDUSD trading at 0.7466
  • EURUSD trading at 1.1643
  • GBPUSD trading at 1.3755
  • USDJPY trading at 113.5000
  • USD Index US Session (ICE Dec) down 0.170 to 93.588

US indexes were mixed as the big three reversed the previous sessions results with the DOW up and SP500 and Nasdaq lower as traders look ahead to big tech earnings. Indexes took a bit of a hit after Powell said that the Fed was on track to begin to start turning the tap off…ie reduce the purchasing of assets. He was reluctant to give a timeline and did say that he feels it is not time to raise rates yet which helped to bring the bargain hunters in to provide support into the close. The yields on the long and short dated bonds both fell which saw bonds rally to make back some previous losses and give shares some support. The DOW closed up 0.21% while the broader SP500 ended down 0.11% and the Nasdaq closed down 0.82% for the session. In Europe, major Indexes managed to end the week with gains Friday on strong earnings and news that Evergrande appeared to avert default as a news source said that they made a last minute bond coupon payment. Data showed that business activity slowed on supply chain constraints while the services industry also struggled on covid issues but traders were happy to remain bullish.

The USD Index struggled as dollar bulls rebalanced their portfolios and eased out of some bullish positions on the back of Powell comments. Powell continued to reiterate the Feds focus on employment before pushing ahead with rate rises. He said that employment is still too low which triggered some selling pressure into the USD. Price continued to find some support around the 92.520 area but is also being held down around 93.780. Expecting that it will not be long until bulls are back buying dips but for now, they are awaiting more data on US employment. The EURUSD was also rather choppy for the session with slightly disappointing Manufacturing and Services data taking pressure off European bonds while the USD weakness provide support. The Euro is showing both support as buyers soaked up selling into 1.1620 and also selling as bears capped a rally into the 1.1655 zone. For now there may still be some residual strength but expect that longer term bears will continue to pressure prices lower as the dollar rallies. The GBPUSD saw bears take charge with a break below the 1.3774 zone. Price spiked down into previous lows around 1.3740 and looks to be still tentative around the level. Expecting that price may grind higher today to bring in and trap some traders before again flushing lower through 1.3740. The AUDUSD managed to fight back from the previous sessions selloff but found sellers lined up to hit the market at 0.7510. Support came in at 0.7455 into the US close which may come under fire today. The USD may get more love than other currencies as traders re-price rate rise expectations and Feds fight back against recent rallies…ie BOE, RBA and ECB. The USDJPY took another hit as longer term buyers bailed and locked in some gains from the run up off 109.00 through September and October. Expecting that we may see some back and fill higher as some sellers are cleared out from Fridays move lower but there still remains the potential for further weakness if the USD flounders.

SPOT GOLD spiked higher during the European session before being slammed back down on Powell comments. Price spiked into 1813 before failing but did show signs that bulls may be alive and well…just playing a waiting game. For now, expecting some chop today as bulls and bears work out their differences. Crude Oil again found a bid to extend into new highs into the US close. Persistent inflation continues to pressure sellers and keep the trend up in tact. Today, we may see price drift lower as some buyers lock away some gains into highs. Copper continued to struggle and find sellers to extend on recent losses and squeeze out more buyers. For now, the move down is being held at 4.6095, so as long as it holds, bulls will continue to be pressured.

Cryptocurrencies were mixed over the weekend with some taking a hit while other kicked higher. Bitcoin fended off more selling pressure while Ethereum found strength and is building for another leg higher. Bitcoin is currently trading at $61028.50 down 0.12% while Ethereum is trading at $4089.09 up 0.01% and Ripple is at $1.07783 down 0.91%.

The ASX200 fought back from a weak open Friday but could not keep the bullish momentum going into the close as the index ended up 0.1 of a point to 7415.5. The two sectors weighing the most on the action were the Energy and Resources sectors while Consumer Discretionary and Consumer Staples helped to support the bulls. Falling stocks outnumbered advancing ones by 693 to 664 and 438 ended unchanged. The Nikkei and the Hang Seng had a contained session as both ended with minor gains for the week.

The ASX200 is expected to open up 30 points after a solid overnight session for the SPI200 with price pushing higher into the US close.


EUR German Ifo Business Climate 7pm

GBP MPC Member Tenreyro Speaks 12am


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