Morning Jumpstart Macro View 8/11/21

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  • SPI200 (Dec) overnight futures up 22 pts to 7459
  • SP500 up 17.47 pts to 4697.53
  • NASDAQ Composite up 31.28 pts to 15971.59
  • Dow Jones up 203.72 pts to 36327.95
  • FTSE100 up 24.05 pts to 7303.96
  • DAX30 up 24.71 pts to 16054.36
  • GOLD futures US session (Dec) up $26.50 to $1820.00 an ounce
  • COPPER futures US session (Comex Dec) up $0.0215 to $4.3420 a pound
  • OIL futures US Session (Nymex Dec) up $2.46 to $81.27 a barrel
  • CRB Index up 1.55 pts to 235.00
  • AUDUSD trading at 0.7400
  • EURUSD trading at 1.1567
  • GBPUSD trading at 1.3498
  • USDJPY trading at 113.4100
  • USD Index US Session (ICE Dec) down 0.134 to 94.207

US indexes end the week with another green day as the US economy continues to show strength. The employment data came out better than expected up 531K new jobs versus 455K expected and the unemployment rate dropped to 4.6% from 4.8% so the labour market is well in line to hit the Feds ‘Full employment’ target by the end of this year or early next. The three major Indexes opened strong but drifted lower through the session as tech weighed. Bond yields were a case of ‘buy the rumour, sell the fact’ as bonds rallied and yields fell into the US close. The employment numbers show the case for rate rises only getting stronger, so expecting that yields will not fall for long. Throw into the mix the approval over the weekend for Bidens ‘spending spree’…$1 Trillion Infrastructure Bill…and traders will be expecting inflation to continue to pressure the Fed. The DOW closed up 0.56% while the broader SP500 ended up 0.37% and the Nasdaq closed up 0.20% for the session. In Europe, major Indexes also edged higher to end the week on a positive note. Bulls were supported by a positive update from US drugmaker Pfizer on its pill for COVID-19 which lifted global risk on into shares. The news also supported the airlines and services (hospitality) sectors.

The biggest move for the week was the co-ordinated message from global Fed Reserves who dampened the markets expectations for rate rises to be sooner rather than later. The US Fed, ECB, BOE and RBA all said that rate hikes were unlikely to be soon even as consumers battle with higher prices. This points to continued risk on sentiment into shares for now which can be seen in the bond market which has rallied during the week as bears were squeezed.

The USD Index clearly had the 94.600 level as a target as price spiked into the level after the US employment data release. Price later moved lower to squeeze out some buyers as the rallied into bonds continued. The case for longer term strength into the USD is only increasing as employment edges towards the Feds target level. For now, the dollar is in pullback mode so could drift lower in coming sessions. The EURUSD mirrored the USD moves with a flush of support and lows around 1.1530 before rallying into the US close as the Dollar fell. Price is holding just below an offer zone around 1.1580 where we would expect to see some renewed pressure from sellers. The GBPUSD flushed out some buyers early in the European session before making its way back up to where it started around 1.3500 into the US close. Traders may now have dealt with the disappointment from the BOE’s holding off on a rate rise, as a lot of buyers have been squeezed out of the action and have had time to re-assess their rate rise expectations. For now, watching to see if the 1.3425 area continues to provide support for buyers. Like the Euro and Pound, the AUDUSD flushed lower ahead of the US employment release, before rallying into the US close. Price spiked below the 0.7380 area and then rebounded as the USD moved down. The short term trend is still down and being held at 0.7470 so price has a lot of room to pullback and still keep the trend down in tact. The USDJPY moved lower along with the USD as price flushed below recent support around 113.400. Price may look to extend on the move down and target stop loss below the 113.220 area.

SPOT GOLD had a good end to the week for bulls as a gold rally was supported by the weakness into the USD. Price action has now cleared out the 1810 resistance area and is well and truly extended in the short term so we will no be surprised to see a squeeze on longs but expect that Gold bulls will be watching the USD action closely today. Any continued strength in coming sessions will see an extension into the 1830 area. Crude Oil found some strength to end the week back above the $80 level. Bulls were supported by renewed supply concerns after OPEC producers rebuffed a US call to accelerate output increases even as demand is high. Expecting further chop as price remains in contraction off major daily highs. Copper remains choppy around the 4.3200 level as bulls continue to pressure sellers. If we see further short term weakness into the USD, then expect some strength into Copper which may spike price up and out of its current chop.

Cryptocurrencies found some strength over the weekend to move higher and brush aside recent weakness. Bitcoin is showing some nice price action that could lead to a rally back up and through $64K which will support other crypto pairs. Bitcoin is currently trading at $62834.60 up 2.73% while Ethereum is trading at $4628.24 up 3.25% and Ripple is at $1.22465 6.65%.

The ASX200 ended the week on a positive note Friday as the index ended the day up another 28.9 points to 7456.90. The best performing sectors for the day were Gold, Telecoms Services and Consumer Staples with Gold expected to lad the charge again today. Rising stocks outnumbered declining ones by 718 to 661 and 447 ended unchanged.

The ASX200 is expected to open up 35 points after US Indexes continued higher into the weekend and dragged the SPI200 along for the ride.


USD FOMC Member Clarida Speaks 1am

USD Fed Chair Powell Speaks 2:30am

GBP BOE Gov Bailey Speaks 4am

USD FOMC Member Evans Speaks 5:50am


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