Morning Jumpstart Macro View 5/11/21

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  • SPI200 (Dec) overnight futures up 20 pts to 7419
  • SP500 up 19.49 pts to 4680.06
  • NASDAQ Composite up 128.73 pts to 15940.31
  • Dow Jones down 33.35 pts to 36124.23
  • FTSE100 up 31.02 pts to 7279.91
  • DAX30 up 69.67 pts to 16029.65
  • GOLD futures US session (Dec) up $29.90 to $1793.80 an ounce
  • COPPER futures US session (Comex Dec) down $0.0030 to $4.3180 a pound
  • OIL futures US Session (Nymex Dec) down $1.62 to $79.24 a barrel
  • CRB Index down 2.34 pts to 233.45
  • AUDUSD trading at 0.7399
  • EURUSD trading at 1.1556
  • GBPUSD trading at 1.3499
  • USDJPY trading at 113.7700
  • USD Index US Session (ICE Dec) up 0.475 to 94.328

US indexes were well contained as again major Tech did the heavy lifting. The Nasdaq continued to power into new all time highs being buoyed by the FOMC statement saying rates are still a while away…meaning ‘go forth and buy my disciples’. Traders will also be happy to sit on the sidelines ahead of the US key jobs data out tonight which is expected to show increasing strength into the labour market…may give the Fed something to think about if their key metric continues to strengthen. Data showed that the number of people filing for unemployment benefits fell while the cost of labour was higher than expected; both challenging the Feds transitory narrative for inflation. Bond yields fell after the BOE statement as traders come to terms with stubborn global Central Banks and get squeezed out of short positions. The DOW closed down 0.09% while the broader SP500 ended up 0.42% and the Nasdaq closed up 0.81% for the session. In Europe, major Indexes were higher largely following the lead from the US from the previous session. The Bank Of England surprised market expectations and kept rates on hold as they await to see the impact on the labour market from the end of the Job-protecting scheme. It seems that they are happy to follow the lead (read collude) of the US Fed Reserve and RBA. The ECB has already said that they do not expect to raise rates next year. . . I expect hoping to get some capital inflows into the European economy thanks to a ‘cheap euro’ in yield terms. Therefore, there was a major reset for rate rise expectations from the market as Global Central Bankers remain adamant to keep support in place.

The USD Index did not waste any time moving higher and started rallying early in the Asian session and into the US close. Price held a higher level at 93.810 which I expect to see trigger buyers to extend price higher into 94.600 in coming sessions although we have US employment data tonight that will bring in some volatility. As the inflationary data builds up, expecting to see continued strength into the USD. The EURUSD again waited for the USD lead before moving lower. Price flushed down through 1.1570 to take out recent buyers. Expecting that longer term bulls will be getting nervous for a move below support around 1.1530 as the daily price action remains in a downtrend. The GBPUSD took a hit after the BOE gave the middle finger to rate rise bulls. Price spiked straight down through 1.3600 lows and also took out support around 1.3550. Price is extended lower so may see a squeeze on bears in the Asian session and grind higher as long as 1.3474 holds. The AUDUSD , like the Euro, was a mirror of the USD move for the day. Usually it can find buyers when share markets are happy, but yesterday, bears were well in control. The RBA statement Tuesday continues to weigh on the Aussie as funds favour the USD for yields. The AUD now looks set to add to the move lower if the 0.7380 area fails to provide support. The USDJPY was initially going along with the USD strength until it looks like there was some major buying into the Yen which offset any strength into the USD. It seems that it was across the board in Yen pairs so the safe haven buying may be a continued theme going forward.

SPOT GOLD was not finished with messing with bulls and decided to rally off the 1760 area against the flow of the USD. Price ripped higher to clear out recent sellers as algos wreaked havoc on bears. Expecting to see the 1795 level cap the overnight rally and start to squeeze out buyers. If not, we may be looking up to 1810 again. Crude Oil was played over night with price spiking higher during the European session only to turn on a dime and head lower straight down to new lows. There remains a lot of buyers stacked up over the loner term that could see price go harder to the downside and may be the target for a squeeze…for now expecting to see the chop continue and sellers weigh on the action in the medium term. Copper again flushed the 4.3210 level but this time struggled to move back above the level into the US close. Expecting to see the 4.4030 level cap the action as sellers, and a bullish USD, weigh on the action.

Cryptocurrencies gave up some of the recent gains as Bitcoin moved lower off a key resistance area. Better performers recently, such as Ethereum, Ripple and Litecoin, also edged lower although are still holding the trend up. Bitcoin is currently trading at $61344.50 down 2.38% while Ethereum is trading at $4494.38 down 2.82% and Ripple is at $1.18709 down 1.24%.

The ASX200 managed to hold it together yesterday to have a more relaxed session without the big swings from previous sessions. This may be a sign of good things to come or bulls if price can hold above 7320. The index ended the day up 35.3 points to 7428 with gains in IT, Financials and Real Estate shares leading the market higher. Rising stocks outnumbered declining ones by 738 to 683 and 365 ended unchanged.

The ASX200 is expected to open up 20 points after the SPI20-0 added to the day sessions gains in overnight trading.


AUD RBA Monetary Policy Statement 11:30am

EUR German Industrial Production 6pm

EUR Retail Sales 9pm

CAD Employment Change and Unemployment Rate 11:30pm

USD Unemployment Rate and Non-Farm Employment Change 11:30am

USD Treasury Currency Report Tentative


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