Asian Open: Job Openings Hit Record High, Wall Street Fights Back

It was another rough start for Wall Street overnight, although a late recovery saw US indices pare losses.

Charts (3)


Asian Futures:

  • Australia's ASX 200 futures are down -41 points (-0.58%), the cash market is currently estimated to open at 7,056.00
  • Japan's Nikkei 225 futures are down -110 points (-0.38%), the cash market is currently estimated to open at 28,498.59
  • Hong Kong's Hang Seng futures are up 114 points (0.41%), the cash market is currently estimated to open at 28,127.81

UK and Europe:

  • UK's FTSE 100 index fell -175.69 points (-2.47%) to close at 6,947.99
  • Europe's  Euro STOXX 50  index fell -77.29 points (-1.92%) to close at 3,946.06
  • Germany's DAX  index fell -280.66 points (-1.82%) to close at 15,119.75
  • France's CAC 40 index fell -118.6 points (-1.86%) to close at 6,267.39

Tuesday US Close:

  • The Dow Jones Industrial fell -473.66 points (-1.36%) to close at 34,269.16
  • The S&P 500 index fell -36.33 points (-0.87%) to close at 4,152.10
  • The Nasdaq 100 index fell -7.814 points (-0.06%) to close at 13,351.27

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Indices pare losses

Job openings rose to a new record high as employers struggle to fill vacancies, despite an ease in lockdown restrictions and continued vaccine rollout. Layoffs also fell to record low, again raising questions as to whether the US government should review its current unemployment benefits program.

After falling another -2% at the open, the Nasdaq 100 pared losses to close effectively flat. Yet as it remains beneath Monday’s (just) the jury is out as to whether bears are done yet. But the rebound does bring into question to how solid the ‘reflationary fears’ narrative really is, given there were clearly buyers after the open. But, with indices rising to key resistance levels by the close, we have a clear line in the sand between bullish and bearish at the next session. Still, the S&P 500 and Russell 2,000 didn’t fare so well, after both gapping lower, extending losses before reversing back to the open with their gaps wide open. All but the materials sector closed in the Red for the S&P 500, so the sell-off is not limited to tech stocks.


ASX 200 Market Internals:

The ASX 200 produced a two-bar, bearish reversal yesterday (dark cloud cover) and closed beneath 7100. SPI 200 futures are currently lower which points to a softer open for the cash index, but we also need to factor in the late rebound on Wall Street which may provide support earlier in the session today for the ASX.

That said, the index has printed a reversal pattern beneath a key historical resistance level (record high) and at the monthly R2 pivot. We would therefore still see any minor rebound as a sign the market is trying to top out, during a month of the year that typically trades lower around 70% of the time (over the past thirty years).

ASX 200: 7097 (-1.06%), 11 May 2021

  • Consumer Staples (0.27%) was the strongest sector and Information Technology (-4.18%) was the weakest
  • 7 out of the 11 sectors outperformed the index
  • 9 out of the 11 sectors closed lower
  • 3 hit a new 52-week high, 5 hit a new 52-week low
  • 68% of stocks closed above their 200-day average
  • 59% of stocks closed above their 50-day average
  • 42.5% of stocks closed above their 20-day average


Outperformers:

  • + 4.28%   -  Omni Bridgeway Ltd  (OBL.AX) 
  • + 3.38%   -  Boral Ltd  (BLD.AX) 
  • + 1.76%   -  Dexus  (DXS.AX)  

Underperformers:

  • -9.14%   -  Zip Co Ltd  (Z1P.AX) 
  • -8.72%   -  Afterpay Ltd  (APT.AX) 
  • -8.16%   -  Redbubble Ltd  (RBL.AX) 


Forex: Dollar holds support (for now)

The British pound and the euro were the strongest majors (AUD was took a close third place) whilst the Swiss franc was the weakest. GBP remains buoyant after Boris Johnson ruled out a second referendum for Scotland, although the pound was the strongest currency in a relatively low volatility session.

The US dollar index (DXY) tapped on 90.00 support again after failing to bounce higher by any meaningful degree. However, as USD/CAD has found support at the September 2017 low we see potential for profit taking (a bounce) from current levels, even if only a minor one. USD/CHF rose to a two-day high after finding support around 0.90, but we’d be tempted to seek bearish setups beneath the 0.9037/75 resistance zone to see if momentum realigns with its bearish trend.

EUR/USD produced a bearish hammer after a false intraday break to new highs. A break beneath yesterday’s low confirms the 1-bar reversal pattern, although we continue to suspect it could be a shallow retracement at this stage before its bullish trend resumes.

USD/JPY remains above its bullish trendline projected from the YTD low yet bulls are refusing to re-emerge, so we’ll continue to monitor prices around trend support to see which direction the next bout of volatility takes us.

 

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AUD/CAD: The shakeout continues

Volatility may have picked up at its lows, but the trend remains bearish and key resistance levels continue to do their job. Tuesday’s candle saw a false break above 0.9533 resistance yet its high fell just short of the 20-day eMA. So, we are simply looking for a break of last week’s low to assume bearish continuation. Given the BOC are more hawkish than RBA by a long mile (and most other G10 central banks) then the fundamentals continue to suggest we could see this pair trade lower in due course.


Commodities: Crude recovers, mixed picture for metals

Crude oil fended off an earlier -1% dip as concerns continued to linger over gasoline shortages sparked by the cyberattack on Colonial Pipeline. The private company is still working hard to get their pipeline back up and running by the end of the week. WTI futures were up 0.63% and trade around 65.34 after finding support above 64.00. Brent rose 0.4% and trades at 68.59 after moving back above the April 8th bullish trendline. Gasoline prices rose a further 0.13% and heating oil was up 1.27%.

It was a mixed picture for metals, with palladium and platinum falling earlier during risk-off trade yet not quite recouping losses. Yet copper rose 1.5% on supply concerns, whilst higher yields helped cap further gains on gold, with the US 30y rising to a one-month high of 2.37 and the 10-year rising to a six-day high of 1.63. Silver is building a base above the 26.63 – 27.0 zone and remains within its bullish channel on the daily chart, so we see its potential to try and rally towards 28.00.


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