Morning Jumpstart Macro View 15/12/21

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  • SPI200 (Dec) overnight futures down 29 pts to 7351
  • SP500 down 38.62 pts to 4630.35
  • NASDAQ Composite down 175.64 pts to 15237.64
  • Dow Jones down 106.77 pts to 35544.18
  • FTSE100 down 12.80 pts to 7218.64
  • DAX30 down 168.16 pts to 15453.56
  • GOLD futures US session (Feb) down $16.60 to $1771.70 an ounce
  • COPPER futures US session (Comex Mar) down $0.0190 to $4.2650 a pound
  • OIL futures US Session (Nymex Jan) down $0.90 to $70.39 a barrel
  • CRB Index down 1.03 pts to 224.33
  • AUDUSD trading at 0.7103
  • EURUSD trading at 1.1257
  • GBPUSD trading at 1.3224
  • USDJPY trading at 113.7400
  • USD Index US Session (ICE Dec) up 0.263 to 96.535

US indexes went lower from the open as selling into tech shares weighed on the broader market SP500. Traders hit the sell button again after a much stronger than expected Producer Price Index (PPI) data release which showed that producers prices increased a lot more than expected which means more pressure on inflation down the line. This is ahead of the FOMC decision on potentially faster tapering which looks to be all but a forgone conclusion now. Bond prices moved lower as yields increased and put pressure on tech shares and growth stocks. The DOW closed down 0.30% while the broader SP500 ended down 0.83% and the Nasdaq closed down 1.14% for the session. In Europe, major Indexes were weaker and took a hit after the US PPI numbers were released. Traders are now battling with the idea of a higher interest rate environment while dealing with Omicron concerns into the quieter Christmas period.

The USD Index was sent lower from the start of the European session in what looked like a major flush of bulls ahead of the PPI number. Buyers were quick to step in and ramp prices back up into new session highs after the PPI release on expectations for faster tapering and quicker rate rises. Price has now broken out of the recent contraction and is pressuring higher which is expected to continue today ahead of the FOMC release. The EURUSD was feeling good about itself as price was lifted off support…but then the USD rally spoilt the party and prices slammed lower. There is a support zone around 1.1235 to 1.1260 so expecting to see a deeper test into the level to target some stop losses. The GBPUSD rallied at the start of the European session after some positive data from the UK on employment and average hourly earnings. The Pound later came under some pressure from the Dollar rally although soaked up the selling well. Expecting to see buyers capped into 1.3260 and support come into 1.3200 today ahead of the FOMC. The AUDUSD also gave up early gains after the PPI number and saw some risk off trading as shares headed lower. Still expect that the Aussie is searching for a bid to build a base and then squeeze out some sellers but this will largely depend on the USD reaction to FOMC tonight. The USDJPY held minor higher levels as the USD rallied and pressured the USDJPY into resistance at 113.800. Expecting to see bulls continue the pressure higher as price now looks set to punch up through the 114.000 level after holding 112.700 and then 113.300 support zones.

SPOT GOLD took a hit after the better than expected PPI number pressured the USD higher. The move was a big squeeze on recent buyers and could continue today if the 1770 level can not hold. If there is more tapering from the Fed then expecting to see the dollar rally and Gold push into lows. Crude Oil edged lower in US trade after holding the $72 area in the European session. Price action looks set to test into the $69 zone to flush out some buyers before any rally. For now, the expectations for a higher USD seem to be weighing on price. Copper initially flushed the 4.3290 level to trap some buyers before falling over into the US close. Price did react up off the session lows but the recent downtrend is well in tact. Expecting the pressure lower to continue and price to be weighed down by any further rally into the USD.

Cryptocurrencies edged higher but are holding around recent lows in a sign that there may be further weakness to come. Bitcoin is currently trading at $47889.80 up 2.74% (last 24 hours) while Ethereum is trading at $3841.74 up 2.37% and Ripple is at $0.81110 up 5.43%.

The ASX200 hit the lows of the day in the first ten minutes of trade yesterday before rallying the rest of the day into the close. The index managed to end down 0.9 pts to 7378.4 after being down nearly 40 pts. Shares in Consumer Staples, Consumer Discretionary and Energy sectors weighed most on the index while Materials and Gold stocks ended with gains. Falling stocks outnumbered advancing ones by 773 to 570 and 408 ended unchanged. The Hang Seng had another rough day ending down 1.33% while the Nikkei ended down 0.73%.

The ASX200 is expected to open down 25/30 points after US indexes dragged down the SPI200.


AUD Westpac Consumer Sentiment 10:30am

CNY Retail Sales and Industrial Production 1pm

GBP CPI and PPI Data 6pm

CAD CPI Data 12:30am

USD Retail Sales Data and Empire State Manufacturing 12:30am

USD Crude Oil Inventories 2:30am

USD FOMC Statement and Fed Funds Rate 6am

USD FOMC Press Conference 6:30am


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