- Australia’s ASX 200 futures are up 30 points (0.41%), the cash market is currently estimated to open at 7,275.10
- Japan’s Nikkei 225 futures are up 240 points (0.86%), the cash market is currently estimated to open at 28,167.37
- Hong Kong’s Hang Seng futures are up 387 points (1.66%), the cash market is currently estimated to open at 23,736.38
- China’s A50 Index futures are up 157 points (1%), the cash market is currently estimated to open at 15,821.59
UK and Europe:
- UK’s FTSE 100 index rose 109.96 points (1.54%) to close at 7,232.28
- Europe’s Euro STOXX 50 index rose 56.96 points (1.4%) to close at 4,137.11
- Germany’s DAX index rose 210.81 points (1.39%) to close at 15,380.79
- France’s CAC 40 index rose 100.26 points (1.48%) to close at 6,865.78
Monday US Close:
- The Dow Jones Industrial rose 646.95 points (1.87%) to close at 35,227.03
- The S&P 500 index rose 53.97 points (1.19%) to close at 4,592.40
- The Nasdaq 100 index rose 130.713 points (0.83%) to close at 15,842.75
What began as cautions optimism in Asia had a bit more follow-through I the US session, with Wall Street indices paring more of Friday’s losses with bond yields and oil prices also rising. Dr Fauci echoed earlier reports that symptoms from Omicron may not be as severe as originally feared, even though cases have now been detected across one third of US states.
AUD and CAD were the strongest majors
The slight risk-on tone allowed the Aussie and Canadian dollar to recoup some of last week’s losses. Yet pull up a chart of AUD/USD and you’ll see a pair that has likely seen a sympathy bounce from 70c ahead of its likely break below it. It might take some surprisingly hawkish comments from RBA today to lift it any further, which would be uncharacteristic of them to say the least.
Friday’s close above the August high was short-lived for USD/CAD as it closed the day with a bearish engulfing candle overnight. The biggest threat to a reversal from its highs is if the Omicron variant is not as bad as originally feared, oil demand forecast pick up to see oil and the Canadian dollar rally and USD/CAD falter.
NZD/CAD reached our bearish target yesterday as the Canadian dollar bounced with oil prices. Whilst the trend on the four-hour chart remains bearish we’re happy to let the market pause for breath before reconsidering further shorts.
USD/JPY forming a base above the November low
Should appetite for risk improve from here is could also help send USD/JPY comfortably back above 114. It has found support above the November low and is now back above 113, but that fact it also held above historical highs including the Fed 2020, March 2020 and July 2021 highs could be seen as bullish overall. We just need the risk-on trigger which would allow markets to refocus on the Fed’s potentially to be hawkish. The pair closed above the 50-day eMA and 113 yesterday after seemingly holding above key historical levels, so bulls could either consider dips within yesterday’s range or wait for a break above 114 to confirm its next let higher.
RBA cash rate decision at 14:30 AEDT
The RBA hold their final meeting of the year, with practically zero expectation for any change of policy. Gold stocks outperformed the ASX yesterday as Omicron continued to dominate headlines. However, the State of Queensland announced they will open their borders to fully vaccinated interstate travellers on December 13th – a move originally planned for the 17th. Treasurer Josh Fryberg was also upbeat on the Australian economy in 2022 which helped the ASX 200 squeeze a minor gain by the close despite coronavirus fears.
ASX 200 Market Internals:
ASX 200: 7245.1 (0.05%), 06 December 2021
- Utilities (1.99%) was the strongest sector and Information Technology (-2.2%) was the weakest
- 6 out of the 11 sectors closed higher
- 6 out of the 11 sectors outperformed the index
- 88 (44.44%) stocks advanced, 106 (53.54%) stocks declined
- 52.02% of stocks closed above their 200-day average
- 32.32% of stocks closed above their 50-day average
- 25.25% of stocks closed above their 20-day average
- + 7.34% – Metcash Ltd (MTS.AX)
- + 4.55% – Silver Lake Resources Ltd (SLR.AX)
- + 4.45% – APA Group (APA.AX)
- -7.05% – Nearmap Ltd (NEA.AX)
- -6.99% – Pointsbet Holdings Ltd (PBH.AX)
- -6.61% – Kogan.com Ltd (KGN.AX)
Up Next (Times in AEDT)