Morning Jumpstart Macro View 4/11/21

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  • SPI200 (Dec) overnight futures up 37 pts to 7400
  • SP500 up 29.92 pts to 4660.57
  • NASDAQ Composite up 161.99 pts to 15811.59
  • Dow Jones up 104.95 pts to 36157.58
  • FTSE100 down 25.92 pts to 7248.89
  • DAX30 up 5.53 pts to 15959.98
  • GOLD futures US session (Dec) down $16.60 to $1772.80 an ounce
  • COPPER futures US session (Comex Dec) down $0.0062 to $4.3598 a pound
  • OIL futures US Session (Nymex Dec) down $3.92 to $79.99 a barrel
  • CRB Index down 3.42 pts to 235.79
  • AUDUSD trading at 0.7452
  • EURUSD trading at 1.1611
  • GBPUSD trading at 1.3685
  • USDJPY trading at 113.9800
  • USD Index US Session (ICE Dec) down 0.244 to 93.835

US indexes were happy again to move up into new all time highs once they got the green light from the Fed to remain risk on. The Nasdaq pumped higher after the FOMC statement and lifted the broader market SP500. As expected, the Fed will start to taper its monthly bond purchases in November and plans to end them in 2022. What surprised the market was that the Fed stuck to its ‘transient inflation’ narrative and said that they will ‘likely NOT’ be required to raise interest rate faster than expected. Powell continued to highlight the labour market as their favoured barometer and expected to see easing of supply chain difficulties…although he did say that supply chain issues ‘would need‘ to ease to give the drop in inflation…a slight change in wording from previously, hinting at things taking a little longer than they expected. Tech stocks took this as a positive to keep ramping higher and Tesla found more willing buyers in an extended market to close it up 3.57% giving Elon another big smile. Bond prices for the 10-year were largely unchanged but were pressured lower into the close taking what Powell said with a grain of salt…they expect that the Fed is buttering them up and may still be forced into early rate rises if inflation persists…but for now…all aboard the share market train. The DOW closed up 0.29% while the broader SP500 ended up 0.65% and the Nasdaq closed up 1.04% for the session. In Europe, major Indexes were mixed with the DAX slightly higher while the FTSE ended lower as traders were happy to remain on the sidelines ahead of the FOMC statement and markets were well contained. Expecting to see bulls come out to play in the coming European session and play catchup with the US.

The USD Index hovered around previous highs into the FOMC statement and then was sold lower as some bulls were caught out on there interest rate outlook. The USD was expecting more from the Fed and for Powell to be more aggressive with rates although the Fed is doing its best to ease the market into any rate rise and will not pull the trigger early if they can avoid it. For now, expecting to see the USD squeeze lower to push out more buyers. The EURUSD was happy with Powell as it pressured higher into the 1.1610 area after the statement release. Again, it is locked to the ups and downs of the USD as traders assess the race to ‘rate rises’ for both currencies and which will provide the best yield advantage moving forward…expect that the Fed will make the move first and the ECB will follow. The Euro may also try to squeeze out traders on a move up if the dollar edges lower. The GBPUSD did initially flush lower but then made its way higher through European trade and into the US close. Traders were happy to square up some short positions ahead of the BOE announcement tonight which they expect will be along the same lines as the RBA and FOMC…more of the same…why rock the boat when no-one else is. The AUDUSD initially moved lower with the DOW at the start of the US session but then spiked back up as traders realised the can will still be kicked down the road for a bit longer. Price may look to squeeze out some sellers on a push higher back towards the 0.7480 area in coming sessions. The USDJPY was a bit choppy but did manage to hold a bid and hold onto early gains even as the USD pressured lower. Price held a minor higher level around 113.740 which may bring in more buyers today for a push up through 114.200.

SPOT GOLD bulls took a big hit coming into the FOMC statement release as price spiked lower into 1760 before bouncing back to settle slightly up off the lows. The USD weakness helped to provide support but I expect that it may not be enough as the USD bulls build their case for higher prices and pressure gold lower. If 1775 holds, then we may see another push into 1760. Crude Oil continued lower and built up a head of steam on the downside as more buyers unwound long positions. Bulls are definitely under fire now as price pushed below the 81.00 level to take out some stop losses. If price can not push back above the level soon, longer term buyers will be forced into action and may look to take some risk off the table. Traders will be focused on OPEC meetings today. Copper flushed the 4.3210 level after the FOMC statement but bulls were quick to rally price back above the level. Buyers will need to hold price above 4.3210 in coming sessions otherwise there may be more selling to come.

Cryptocurrencies were generally stronger across the board seemingly happy with the Fed statement and the market reaction. Ethereum continues to look bullish while Ripple is showing bulls some love and setting up for a leg higher and BTC is lagging behind. Bitcoin is currently trading at $62826.90 down 1.22% while Ethereum is trading at $4625.08 up 2.52% and Ripple is at $1.19471 up 6.27%.

The ASX200 started the session with a bang yesterday rallying from the open but bulls soon lost interest and price faded into the close. Still, the index ended up 68.4 points to 7392.7 with gains in Materials, Metals and Mining and Financials leading the index higher. Falling stocks outnumbered advancing ones by 711 to 682 and 411 ended unchanged. The Nikkei was closed for the session leaving the Hang Seng to drift lower alone and end down another 0.30%.

The ASX200 is expected to open up 35 points as the SPI200 spiked up into the US close after the FOMC statement.


AUD Retail Sales and Trade Balance 11:30am

EUR German Factory Orders 6pm

EUR PPI Data 9pm

ALL OPEC Meetings All Day

GBP BOE Monetary Policy Report, Asset Purchase Facility and Official Bank Rate 11pm

USD Unemployment Claims 11:30pm

EUR ECB President Lagarde Speaks 12am

GBP BOE Gove Bailey Speaks 12am


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