It's a slight risk-on tone before today’s open with AUD/JPY and index futures pointing higher. this might bode well for the DAX which closed to a record high yesterday.

Asian Indices:


Australia's ASX 200 index rose by 31.6 points (0.47%) to shut at 6,771.20

Japan's Nikkei 225 index has risen by 253.7 points (0.88%) and currently trades at 28,998.58

Hong Kong's Hang Seng index has risen by 282.35 points (0.99%) and currently trades at 28,823.18

UK and Europe:


UK's FTSE 100 futures are currently down -11 points (-0.16%), the cash market is currently estimated to open at 6,708.13

Euro STOXX 50 futures are currently down -3 points (-0.08%), the cash market is currently estimated to open at 3,760.24

Germany's DAX futures are currently down -5 points (-0.03%), the cash market is currently estimated to open at 14,375.91

Monday US Close:


The Dow Jones Industrial fell -121.43 points (-0.39%) to shut at 31,270.09

The S&P 500 index fell -20.59 points (-0.54%) to shut at 3,821.35

The Nasdaq 100 index fell -376.62 points (-2.88%) to shut at 12,299.08

Index futures are higher again overnight with Singapore STI rising over 1% and Nikkei 225 futures up around 0.9%. At the time of writing, Nasdaq E-mini futures have recouped +1.25% of Monday’s losses and therefore the S&P E-minis are around 0.8% higher.


Stronger yields during yesterday’s NY session saw the Nasdaq 100 tumble nearly -3% and retest last week’s low, as investors continued to rotate out of high valuation equities. The S&P 500 got off relatively lightly with a -0.54% fall and closed on its 20-day eMA.


S&P 500: 08 March 2021


The index closed -3.27% below its 52-week high

Utilities (1.38%) was the strongest sector and knowledge Technology (-2.46%) was the weakest

9 out of the 11 sectors outperformed the index

80.2% of stocks closed above their 200-day average 

94.46% of stocks closed above their 50-day average 

64.75% of stocks closed above their 20-day average 

 

Dax hits record high

Weaker German industrial production weakened the euro and helped strengthen stocks as investors back more fiscal stimulus and straightforward policies from the ECB. Rising around 3.5%, it had been the foremost bullish session for the Dax since November and it closed above its prior highs with staunch conviction.Our bias remains bullish above 14,200

Bulls could look to enter longs upon a coffee volatility retracement or period of consolidation above its prior highs

Given its at a record high an open upside target might be used, or technical indicators like pivot points can project potential targets


Gold bugs look to 1670 as their last line of defence

Gold prices retraced overnight after printing a firm bearish close below 1700 and forming a bearish engulfing candle. Given the convenience at which longs were flushed out around 1700 then we could see key support around 1670 challenged today. And, as we’d expect to ascertain some large stops beneath this level, we could see a battle from bulls to defend it (bullish volatility) unless large stops are triggered and costs get sent sharply lower.



Forex: Another g’day for Aussie data

NAB’s business confidence index rose to a 10-year high as higher employment, sales and profits pointed towards a stronger then expected recovery. Business conditions rose to fifteen from 7 prior, and now sits back at its highest level since August 2018.


AUD/JPY is currently the strongest FX pair although volatility remains calm overall, with daily ranges sitting around 40-50% of their 10-day ATR (average true range).

AUD/USD has stabilised above the 0.7620 low, yet within the prior two-day range and well below the 50-day eMA. Until we see weakness for the dollar then our bias remains bearish below 0.7700.

GBP/USD has remained confined within the 1.3773 – 1.3866 outlined in yesterday’s European open report. an opportunity above 1.3866 invalidates the bearish bias, whereas an opportunity below 1.3773 reaffirms it.

EUR/USD’s decline has stalled at its 200-day eMA which leaves the potential for a technical bounce, assuming the dollar’s rally can settle down a touch first. Yet with momentum predominantly bearish leading into this key level we suspect it's going to be a minor bounce at the best . Ultimately, our bias remains bearish below the 1.1952 swing low and we’d favour fading into (shorting) into retracements.


Japan’s GDP deflates in final reads

Japan’s growth was downgraded in Q4 as cost and personal inventories were less than originally expected. Q4 annualised growth now sits at 11.7% YoY (12.7% prior) and therefore the consensus was for it to be upgraded slightly to 12.8%. The quarterly read suffered an equivalent fate and was reduced to 2.8% from 3% previously.


USD/JPY hit fresh highs above 109 and sits at its highest level since June 2020. Given every technical indicator screams overbought (yet price action has yet to verify any of them), the intraday bias remains up. subsequent major resistance level is that the 109.85 high and, if current momentum persists, it might be there within two sessions. an opportunity of today’s daily low might be the primary suggestion that momentum has turned.There’s no top tier economic data scheduled for today. Euro pairs could remain susceptible to weak German trade data (particularly if exports slump quite expected) during a strong US dollar environment.

The same are often said for Eurozone employment and GDP numbers but, as these are final reads, we doubt they're going to become too market moving.

RBA Governor, Dr Philip Lowe speaks at the AFR (Australian Financial Review) business Summit at 22:00.

Fed member Robert Kaplan speaks at 23:00 speaks on national and global economic issues.