Morning Jumpstart Macro View 8/12/21

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  • SPI200 (Dec) overnight futures up 22 pts to 7353
  • SP500 up 95.08 pts to 4686.75
  • NASDAQ Composite up 461.77 pts to 15686.92
  • Dow Jones up 492.40 pts to 35719.43
  • FTSE100 up 107.62 pts to 7339.90
  • DAX30 up 433.15 pts to 15813.94
  • GOLD futures US session (Feb) up $5.60 to $1785.10 an ounce
  • COPPER futures US session (Comex Mar) up $0.0055 to $4.3430 a pound
  • OIL futures US Session (Nymex Jan) up $2.19 to $71.68 a barrel
  • CRB Index up 2.50 pts to 225.74
  • AUDUSD trading at 0.7120
  • EURUSD trading at 1.1268
  • GBPUSD trading at 1.3243
  • USDJPY trading at 113.5400
  • USD Index US Session (ICE Dec) down 0.052 to 96.278

US indexes followed up with another strong session as it was a ‘free for all’ buying spree right from the open. Traders picked up some beaten down tech shares and FAANGs again led the charge to support the overall market. FAANGs were all up well over 2% with Tesla leading the charge up over 4% at the close. All eleven major S&P sectors rallied brushing aside any lingering Omicron concern. It the FX and Bond markets, prices continued to point to raising interest rates sooner than expected. It seems like the share market is determined to see how high it can get prior to an inevitable rate rise. Bond yields went higher while the dollar was supported. The DOW closed up 1.40% while the broader SP500 ended up 2.07% and the Nasdaq closed up 3.03% for the session. In Europe, major Indexes rallied hard with the DAX spiking up 2.82% and the FTSE not far behind ending up 1.49%. The DAX was lifted early by stronger than expected Industrial production data and the generally feeling that all is well again in stock market land…inflation is high (over double the ECBs 2% target and not likely to ease soon), economies are expanding and the ECB will leave the support flowing.

The USD Index rallied through the European session before some heat come out of the action once the US opened. Price continues to be supported on rate hike expectations with the longer term dollar uptrend in tact. Traders will continue to favour the USD over other pairs as the US leads the charge to rate rises. The EURUSD mirrored the USD move with a push lower in European trade before buyers stepped in to provide some support in the US session. Price action remains heavy holding lower highs and making new short term lows. Expect that this will continue to be the case until the ECB decide to change their tune on inflation and admit that it is not transient. The GBPUSD also pressured lower through European trade and held the lows into the US close. Price is now being held down at 1.3286 but also happy to hold above the 1.3208 zone for now. Expecting to see price creep higher but remain below the 1.3286 level today. The AUDUSD is still on a charge higher off major support as share markets bounce back and go risk on. Expecting that price is extended and sellers will test the bulls commitment today around the 0.7115 area as price action may need to put some buyers back on the sidelines before another rally. The USDJPY was contained around the 113.600 area as price was largely range bound and choppy. If the USD is to rally, then expecting to see the USDJPY push up towards the 114.000 area and above in coming sessions. Today, expecting to see a flush lower to squeeze out some buyers before another leg up builds.

SPOT GOLD continues to give bulls headaches as price flushed lower through 1776 before jumping higher to test the 1788 level. Watching to see if price can follow through on the late bullish action and extend higher today through 1788. Crude Oil ramped up as any lingering caution over Omicron was abandoned. Price is now well above the $70 area and potentially looking to flush up through $73.00 in coming sessions (ie tonight if shares continue to ramp). Copper was also part of the bulls party as price spiked up and through resistance at 4.3410. Sellers did move price back down to retest the level into the US close, but expecting to see more buyers provide support at the level today.

Cryptocurrencies fought back off recent lows but were kept in check by USD strength and a lack of demand after the recent margin cleanout of positions. Bitcoin is currently trading at $50715.20 up 1.32% (last 24 hours) while Ethereum is trading at $4312.95 up 2.70% and Ripple is at $0.81944 up 3.30%.

The ASX200 got off to a good start yesterday but faded off the highs midday…all before turning back up and ending the day with a strong rally as traders took comfort in the RBA keeping rates on hold. The best performing stocks came in the Energy, IT and Healthcare sectors as the Index ended up 68.8 points to 7313.9. Rising stocks outnumbered declining ones by 859 to 546 and 384 ended unchanged. The Hang Seng came out of the gate strong and extended on the gains to end up 2.72% while the Nikkei ended up 1.89%. China cut the reserve requirement ratio by 50 basis points to reduce the amount of cash must hold in reserve. The aim is to free up cash and help out property developers who are feeling the pinch from the Evergrande fallout. It also means that China other areas of the economy are supported.

The ASX200 is expected to open up 65 points thanks to another SPI200 rally in the overnight session. The SPI200 did dump in the final minute of trading so the open will be interesting.


JPY Current account and Final GDP 10:50am

EUR ECB President Lagarde Speaks 7:15pm

CAD Overnight Rate and BOC Rate Statement 2am

USD Jolts Job Openings 2am

USD Crude Oil Inventories 2:30am

USD 10-yr Bon Auction 5:01am


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