Morning Jumpstart Macro View 17/12/21

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  • SPI200 (Mar) overnight futures up 10 pts to 7206
  • SP500 down 41.18 pts to 4668.67
  • NASDAQ Composite down 385.15 pts to 15180.43
  • Dow Jones down 29.79 pts to 35897.64
  • FTSE100 up 89.86 pts to 7260.61
  • DAX30 up 160.05 pts to 15636.40
  • GOLD futures US session (Feb) up $35.30 to $1799.80 an ounce
  • COPPER futures US session (Comex Mar) up $0.1105 to $4.2930 a pound
  • OIL futures US Session (Nymex Jan) up $1.18 to $72.05 a barrel
  • CRB Index up 3.42 pts to 227.24
  • AUDUSD trading at 0.7183
  • EURUSD trading at 1.1333
  • GBPUSD trading at 1.3327
  • USDJPY trading at 113.6900
  • USD Index US Session (ICE Dec) down 0.532 to 95.950

US indexes came under pressure from the open largely due to a selloff in tech stocks namely high flying FAANGs. The pressure started from the open to reverse yesterdays late rally into the close. The Bank of England (BOE) surprisingly raised interest rates which pressured growth stocks from the open in the US. Global Central Banks continue to grapple with rising inflation especially in the US and Britain leaving the BOE with no choice but to be the first of the G7 countries to commit to tighter monetary policy. The ECB is still taking a different course and largely leaving stimulus in tact as the spread of the new Omicron variant depresses spending in the EU and threatens growth. The FED will now be in focus for a rate rise as inflation levels hold well above their targets and employment levels rise. Expecting to see further uncertainty from bulls and pressure into growth shares…it is just whether it will be orderly or not. Bond prices rallied as the USD came under pressure and moved lower. The DOW closed down 0.08% while the broader SP500 ended down 0.87% and the Nasdaq closed down 2.47% for the session. In Europe, major Indexes started the session stronger to follow on from the US rally into the close. Prices were largely contained on the FTSE which held up well after the BOE hiked rates. The DAX Index found sellers off the highs to pressure prices lower into the close.

The USD Index took a hit lower with the move largely being driven by the Pound buying into and after the BOE rate rise. The selling pressure saw some dollar longs unwind in favour of the GBP and press the dollar index down into support around 95.850. A lot of the reaction lower was due to the movement of other currencies around central bank news so we may see buyers step in above the 95.850 level today. The EURUSD was also choppy and rallied hard as the USD moved lower. Sellers were enticed into the action after the ECB said that it would only slightly rein in stimulus although support from USD weakness continued to press the Euro higher. Price did react down off 1.1354 which may cap the action today. The GBPUSD saw bulls well and truly take control of the action from the start of European session as they seemed to anticipate a rate rise from the BOE. Price extended on the gains as it was announced and cleared out any remaining shorts. Expecting to see more support in coming sessions and for price to start the process of squeezing out shorts built up from the end of October. The AUDUSD rallied up through the 0.7180 resistance area once the USD started to head lower. Price could not keep the momentum higher and fell back down into the same level as US indexes went risk off. Expecting to see the level hold today and will be watching to see if buyers can engineer a rally to test back into overnight highs. The USDJPY fell apart to spike down off 114.100 and major resistance. Key support around 113.300 is still in tact which may see a bid start to support the action around current levels. The BOJ monetary policy statement is out today which may keep a lid on the action although is not expected to have a material effect on price direction.

SPOT GOLD benefitted from the selloff into the USD and saw buyers flow into the action to press price up through resistance at 1792. The bullish move may drag in more inflationary gold bugs today and hold above 1792, but expect that the action will continue to be linked to the USD move for now. Crude Oil pressed into the $72 area and saw some minor profit taking to fall away from the level before being ramped straight back up to clear out stops above $72. Price looks more bullish medium term now and could easily see a break up through the $73 area in coming days if continued support comes from lower inventory levels. Copper continued to ramp higher after the massive flush down through 4.1875 in the previous session. The overnight move up has broken the downtrend so expecting to see more buyers flow into the action to support dips and pressure price higher.

Cryptocurrencies were under pressure for most of the session yesterday as sellers kept a lid on any rally. Expecting to see this same theme continue into the weekend. Bitcoin is currently trading at $48062.30 down 2.40% (last 24 hours) while Ethereum is trading at $4024.11 down 0.76% and Ripple is at $0.81447 down 2.14%.

The ASX200 came under pressure right from the open yesterday to end the session down 31.4 points to 7295.7. Traders were disappointed that there was no overflow from the bullish US close but expect that the positive local employment data, that easily beat estimates, weighed on the action at a time when global markets are focused on higher interest rates. The Healthcare, Energy and Resources sectors weighed most on the ASX while rising stocks outnumbered declining ones by 722 to 618 and 400 ended unchanged. The Hang Seng managed to end up off session lows up 0.23% for the session while the Nikkei gapped up from the open and never looked back to end up 2.13%.

The ASX200 is expected to open flat as the SPI200 gave back early gains in the US session to end where it started the overnight session.


JPY Monetary Policy Statement Tentative

JPY BOJ Policy Rate Tentative

JPY BOJ Press Conference Tentative

GBP Retail Sales 6pm

EUR German Ifo Business Climate 8pm

USD FOMC Member Waller Speaks 5am


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