Morning Jumpstart Macro View 28/10/21

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  • SPI200 (Dec) overnight futures down 40 pts to 7380
  • SP500 down 23.11 pts to 4551.68
  • NASDAQ Composite up 0.13 pts to 15235.84
  • Dow Jones down 266.19 pts to 35490.69
  • FTSE100 down 24.35 pts to 7253.27
  • DAX30 down 51.25 pts to 15705.81
  • GOLD futures US session (Dec) up $5.40 to $1798.80 an ounce
  • COPPER futures US session (Comex Dec) down $0.1038 to $4.3822 a pound
  • OIL futures US Session (Nymex Dec) down $2.57 to $82.08 a barrel
  • CRB Index down 2.24 pts to 238.95
  • AUDUSD trading at 0.7518
  • EURUSD trading at 1.1601
  • GBPUSD trading at 1.3739
  • USDJPY trading at 113.8500
  • USD Index US Session (ICE Dec) down 0.064 to 93.877

US indexes were hit in the final hours of trade to push down into negative territory for the session. Markets got off to an okay start to the session with Tech darlings on the Nasdaq helping to support the action. Bond prices continued to rally with yields falling which pressured financials while energy stocks also took a hit. The bond rally helped to support growth stocks as the pressure on rate rises eased for now. Traders are a little uncertain on what the Fed may do going forward after recent Powell comments so bond sellers are locking in gains with Tapering already factored in. Supply chain issues remain and may be more of a concern with US/China tensions on the rise again after US telecoms regulator voted on Tuesday to revoke the authorization for China Telecom’s US subsidiary to operate in the United States. The DOW closed down 0.74% while the broader SP500 ended down 0.51% and the Nasdaq closed up 0.001% (flat) for the session. In Europe, major Indexes were lower from the open as it seems that bulls were happy to remain on the sidelines as some heat came out of the market. Investors were cautious heading into the ECB statement and mixed earnings weighed on Indexes. Miners also took a hit as Chinese intervention to address skyrocketing commodity prices hit coal and metal prices. Expectations are that the ECB will remain accommodative but traders were happy to lock in some gains…as you just never know what may happen.

The USD Index did come under some pressure but buyers remained steadfast and defended any push lower into the 93.700 zone. Price action showed some volatility which may be signs that bulls are trying to engineer a move higher and hold a higher low as supply chain issues continue to support the interest rate rise narrative. Will be watching to see if bulls continue to hold price above the 93.700 level today into the ECB statement late in the European session. The EURUSD was contained ahead of the ECB release as price was held between 1.1624 and 1.1585. The dollar chop also weighed on the action and expect that any USD break higher will trigger selling into the Euro. Not much is expected to change from the ECB but traders will be focused on what they have to say about inflation going forward…so expect a lift on volatility as algos go to work over the release. The GBPUSD added to previous sessions losses as price pushed down below the 1.3740 level to take out some sell stop losses. Price held a lower high at 1.3780 so may be setting to continue lower in coming session if price breaks below 1.3709. The AUDUSD initially pushed lower into 0.7485 but then bounced back up off the level. The move down to 0.7485 will have bulls concerned so watching to see if further selling pressure comes in off 0.7534 highs. The USDJPY reacted lower off 114.200 early in the Asian session as recent buyers were forced out of the action. Price flushed all the way back down into 113.415 before bounced off the zone. We may expect further choppy action until the USD works itself out.

SPOT GOLD saw a choppy session but also saw some good signs for bulls in the short term. Price managed to hold above the 1783 level but did see some sellers to cap the action. Bulls will need to make a move soon to crack above the 1810 level otherwise I expect to see some profit taking from impatient buyers. Crude Oil took a hit to pressure buyers into profit taking mode after US crude oil inventories came out a lot higher than expected. Price was already moving south ahead of the release where more sellers piled in to break below the 83.05 level and trigger some short term stop losses. Still…the trend up remains in tact until a break below 81.10. Copper continued to move down and was all one way action from the start of the Asian session. News of Chinese intervention has sellers jumping into the action and buyers bailing on long positions. The move down may extend further today.

Cryptocurrencies took a hit in European trade as sellers hit the market across the board at the start of the session. Nothing seemed safe as Bitcoin slide back below the $60k level to squeeze out a lot of recent buyers. For any other market, 5% swings would be a warning, but for crypto it is business as usual. Bitcoin is currently trading at $58814.40 down 5.13% while Ethereum is trading at $3975.78 down 5.63% and Ripple is at $1.01131 down 9.34%.

The ASX200 had another choppy session yesterday as early strength was sold into to push price into negative territory before bulls managed to fight back into the close. The index ended the day up only 5.3 points to 7448.7. Gains came mainly in Telecom Services, Healthcare and Financial shares as falling stocks outnumbered advancing ones by 826 to 580 and 402 ended unchanged. Inflationary CPI numbers came out slight higher than expectations leaving the Aussie to get up to its usual tricks and spike up to drag in some buyers before falling over later to squeeze them back out.

The ASX200 is expected to open down 40 points as the SPI200 sank lower into the close along with major US Indexes.


AUD RBA Deputy Gov Debelle Speaks 10:40am

JPY Retail Sales 10:50am

JPY BOJ Outlook Report Tentative

JPY Monetary Policy Statement and BOJ Policy Rate Tentative

EUR German Unemployment Change 6:55pm

EUR Main Refinancing Rate and Monetary Policy Statement 10:45pm

EUR ECB Press Conference 11:30pm

USD Advance GDP and Unemployment Claims 11:30pm


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