OVERNIGHT MARKET SNAPSHOT FOR THURSDAY 11/11/21 (as at 8am AEDT)
- SPI200 (Dec) overnight futures down 9 pts to 7403
- SP500 down 36.77 pts to 4648.48
- NASDAQ Composite down 263.83 pts to 15622.71
- Dow Jones down 240.04 pts to 36079.94
- FTSE100 up 66.11 pts to 7340.15
- DAX30 up 27.36 pts to 16067.83
- GOLD futures US session (Dec) up $23.90 to $1854.70 an ounce
- COPPER futures US session (Comex Dec) down $0.0753 to $4.2977 a pound
- OIL futures US Session (Nymex Dec) down $2.91 to $81.24 a barrel
- CRB Index down 1.93 pts to 234.66
- AUDUSD trading at 0.7324
- EURUSD trading at 1.1477
- GBPUSD trading at 1.3404
- USDJPY trading at 113.9500
- USD Index US Session (ICE Dec) up 0.939 to 94.895
US indexes took a hit from the open as inflation again rears its ugly head again. The CPI numbers came out a lot higher than expected at 0.9% from 0.4% with the more important core CPI at 0.6% from 0.2% last. The Nasdaq opened weaker and bears kept the pressure on into the close which dragged the broader market SP500 lower with it. The higher inflation reading was fuelled by surging gas and food prices which are hitting consumers in their hip pockets. Bond prices nosedived driving the USD higher as yields climbed up off recent lows and traders re-assessed their inflationary outlook expecting that the Fed Reserve will be forced into a corner sooner or later if the higher numbers persist. The 30-year Bond auction had a poor showing as buyers of the physical bond are demanding higher yields which only highlights expectations for rate rises. The DOW closed down 0.66% while the broader SP500 ended down 0.78% and the Nasdaq closed down 1.66% for the session. In Europe, major Indexes were higher for the session but will be playing catchup with the fall in the US overnight when they open for trade later today. Strong earnings from the media and energy sector supported the session while tech stocks fell after the US data release. Expectations for rate rises are expected to dampen stock rallies into the end of the year but until a Central Bank takes the first step, Indexes are expected to remain buoyant…unless of course everyone decides to run for the exit at the same time.
The USD Index held above the 93.800 level as expected and spiked higher once the US CPI figures were released. Recent shorts were booted out of the action as bulls chased price higher to smash into new short term highs above 94.600. If price action can clear the 95.000 level cleanly, then bulls may start to run. Expecting that the Fed will have something to say above the recent CPI release to attempt to quell any rate rise fears and cap the dollar rally. The EURUSD was dumped through 1.1530 as buyers ran for cover as the USD spiked. Price has now pushed down into new lows which may drag in more sellers looking for lower lows in coming sessions. It will be all about the USD and whether any rate rise expectations have been adequately factored into the action after the overnight spike. The GBPUSD also took a hit and dropped through lows into the 1.3400 area. Traders will be re-adjusting currency positions looking for more exposure to the USD for an expected rise in dollar yield. Bulls will be watching the 1.3400 level to see if it can hold today or whether there will be further unwinding of long bets into the Pound. The AUDUSD was not a happy camper either as price continued its recent move lower now anchored around the 0.7384 level. Price is getting extended but could easily add to the overnight selloff today as the next major support level is down around 0.7222. The action from USDJPY would suggest that someone new something about the coming CPI number as price took off around the start of the European session. The move squeezed out all the sellers from the recent grind lower and could easily extend today into 114.200 as Asian market bears wake up to see the strong USD. Some fear based YEN buying may cap the action on the upside.
SPOT GOLD finally acted like an inflation hedge as price rallied hard along with the USD move. The action was completely dislocated with recent action and trend with the USD. The move up through $1830 added to the upward pressure as stop losses were triggered and breakout traders dived into the action. Price could add to the gains today as more gold bugs wake up to see the strong green move on their screens. Crude Oil toyed with bulls today as price held below the $84.80 level and was sold lower once the USD rallied. Price pushed straight back down into the $81 support zone so buyers will be watching the reaction of sellers at this level today before dipping their toes in the water. Copper also took a hit as the USD rally was too much for bulls to deal with. Recent buyers were squeezed out of the action as price broke back down into recent lows and key support around 4.3000.
Cryptocurrencies showed some confusion overnight as they initially rallied on the CPI number before later giving up the gains and succumbing to the USD strength into the US close. Bitcoin is currently trading at $65904.30 down 2.13% while Ethereum is trading at $4634.52 down 3.46% and Ripple is at $1.24289 down 1.84%.
The ASX200 had another choppy session yesterday to give up early gains into the close. The index ended down 10.3 points to 7423.9 in another lacklustre session with shares in Metals and Mining, Resources and Materials sectors bearing the brunt of the selling. The Hang Seng was weak in the earlier session but bulls took charge after the break to ramp price higher into the close to end up 0.74% while the Nikkei struggled from the open to end down 0.61%.
The ASX200 is expected to open down only 10 points but may see more selling pressure come into the action from the open as traders concerns over inflation rises.
ECONOMIC DATA OUT TODAY (AEDT)
AUD Employment Change and Unemployment Rate 11:30am
GBP Prelim GDP, Construction Output, Industrial Production and Manufacturing Production 6pm
EUR EU Economic Forecasts 9pm
USD Bank Holiday
SPI200 INTRADAY LEVELS TO WATCH