Morning Jumpstart Macro View 2/12/21

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  • SPI200 (Dec) overnight futures down 79 pts to 7160
  • SP500 down 46.92 pts to 4520.08
  • NASDAQ Composite down 283.64 pts to 15254.05
  • Dow Jones down 461.68 pts to 34022.04
  • FTSE100 up 109.23 pts to 7168.68
  • DAX30 up 372.54 pts to 15472.67
  • GOLD futures US session (Dec) up $4.40 to $1778.00 an ounce
  • COPPER futures US session (Comex Mar) down $0.0602 to $4.2198 a pound
  • OIL futures US Session (Nymex Jan) down $1.03 to $65.15 a barrel
  • CRB Index down 0.79 pts to 218.39
  • AUDUSD trading at 0.7101
  • EURUSD trading at 1.1315
  • GBPUSD trading at 1.3267
  • USDJPY trading at 112.8100
  • USD Index US Session (ICE Dec) up 0.068 to 96.075

US indexes started the session in a positive mood before turning and falling hard into the close. Bulls gave way to bears as concerns continue over the new variant, rising inflation and what the Fed Reserve will do to combat inflation. Prices took a hit after Powells speech in which he has changed his tune towards inflation. He said that ‘policymakers needed to be ready to respond to the possibility that inflation may not recede in the second half of next year as expected’…finally admitting that inflation may not be transitory. Markets did not take well to the change in tone and went back into risk off mode. At the time of writing, the DOW had fallen 750pts off session highs and Nasdaq 450pts. FAANG shares took a hit with Facebook leading the charge lower. Surprisingly the US 10-year Bond rallied meaning yields eased, while the short dated 2-year held its ground. It seems that expectations are increasing of a rate rise sooner rather than later. The DOW closed down 1.34% while the broader SP500 ended down 1.03% and the Nasdaq closed down 1.83% for the session. In Europe, major Indexes rallied hard with the DAX leading the way after some positive economic data…for inflation at least. The FTSE was not far behind but expect that they will not take kindly to the late selloff in the US and play catchup on the open. Some positive news from the WHO on the new variant helped to stem fears. The WHO suggested they will have more information on Omicron in coming days and expect that current vaccines will be effective.

The USD Index was moving lower ahead of Powells speech when it turned and started the march higher. Traders are again bullish on the USD and interest rate rises after the Omicron induced pause on buying. Price held a higher low at 95.700 and is expected to rally from here. Traders may be a little more conservative than previously with Omicron concerns hanging around and US key employment data out Friday. The EURUSD was edging higher into Powells speech but lacked conviction. Once the USD started to move back up the Euro was quick to turn lower. Expect that the 1.1300 level will come under fire today and start to squeeze out recent buyers. The GBPUSD dragged in some buyers early before chewing them up and spitting them out with a spike lower as the Dollar rallied. Price cleared out the lows around 1.3276 and looks set to continue lower as longer term lower highs continue to hold. Like the Euro, the Pound is loosing favour to the USD as the US economy outperforms others. The AUDUSD added to the chorus for expectations of a higher USD ahead. Price stumbled at highs around 0.7170 and then dived back down into lows into the US close. Watching to see if buyers can provide support around lows today or whether there will be more short term downside to come through 0.7090. The USDJPY pushed into lows through European trade but then the USD buying was offset by JPY safe haven buying into the US close as the pair held below 113.000.

SPOT GOLD came under pressure from the USD rally as price fell away from 1792 back down heading for recent lows around 1770. Price remains looking heavy and could come under more fire if the USD continues to rally. For now it seems that a safe haven and inflation hedge bid into gold is off the cards which may drag in more sellers in the near term. Crude Oil again came under fire in the US session after inventory data added to the concerns for weaker demand as it came in higher than expected. Price is now back below the $66 level and heading lower so will need some buyers to provide some support soon but expectations for a higher USD are not helping. Copper fell over again in a move that started late in the Asian market session. Price moved down into new lows below 4.2500 and continues to look heavy as longer term buyers are getting squeezed. The action could easily see Copper move down into the 4.0000 level in coming sessions.

Cryptocurrencies were holding up well until the USD started to get pressured and then bulls came unstuck. Bitcoin is currently trading at $56845.20 down 0.47% while Ethereum is trading at $4579.29 down 1.48% and Ripple is at $0.98759 down 1.73%.

The ASX200 had another rough session yesterday but did manage to fight back up off session lows into the close as the Index ended down 20.1 points to 7235.9. The ASX was led lower by losses in Consumer Staples, Utilities and A-Reits. Falling stocks outnumbered advancing ones by 978 to 430 and 368 ended unchanged. The Hang Seng and Nikkei both ended the day with minor gains.

The ASX200 is expected to open down 70 points after the SPI200 was hammered into the US close.


AUD Retail Sales and Trade Balance 11:30am

JPY Consumer Confidence 4pm

EUR Spanish Unemployment Change 7pm

EUR PPI and Unemployment Rate 9pm

ALL OPEC Meetings All Day

USD Unemployment Claims 12:30am

USD Treasury Sec Yellen Speaks 1am


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