Futures suggest ASX will struggle as employment data is disseminated

By Trevor Hoey. Published at Jun 18, 2020, in Market Wrap

The S&P/ASX 200 (XJO) gained 0.8% on Wednesday, building on the significant market spike on Tuesday, and perhaps laying the foundation for a strong week-on-week gain.

However, there are variables in the wind with a fresh outbreak of coronavirus in Beijing, an increase in COVID-19 numbers in some states of the US and the release this morning of important employment data in Australia.

Further, overseas markets lacked direction overnight with nominal gains in the UK and Europe and flat to negative performances across US indices.

Summing these factors up, futures traders are betting on headwinds with the ASX SPI200 Futures index down 36 points to 5926 points.

24 hours

It is worth noting that the XJO fluctuated in and out of the black on Wednesday, before finishing up 50 points at 5992 points.

This uncertainty was also evident across trading in similar time zones with the Nikkei 225 demonstrating the most volatility, falling 0.6% or 126 points to close at 22,455 points.

While the Hang Seng finished up 137 points at 24,481 points, at one stage it was hovering in the vicinity of 24,200 points.

The Shanghai Composite eked out a small gain of four points, closing at 2935 points.

In the UK, the FTSE 100 started in positive fashion, at one stage up more than 60 points, but it was all downhill in afternoon trading with the index only gaining 10 points to close at 6253 points.

Mainland European markets performed consistently with the DAX (+0.5%) and the CAC 40 (+0.9%) making solid gains to finish at 12,382 points and 4996 points respectively.

In the US, the Dow shed 170 points or 0.6% to close at 26,119 points and the S&P 500 came off 11 points, closing at 3113 points.

Once again, the NASDAQ outperformed, increasing 0.1% or 14 points to close at 9910 points.

Amid this uncertainty, there was little movement in the CBOE Volatility Index with it currently hovering in the vicinity of 33 points.

Gold continues to trade in a tight band between US$1730 per ounce and US$1740 per ounce.

It was a similar story with oil as the Brent Crude Oil Continuous Contract finished around the midpoint of a range between US$40 per barrel and US$41 per barrel.

Iron ore was relatively flat at US$104 per tonne.

The most prominent development on the base metals front was lead breaking through the US$0.80 per pound mark for the first time since March.

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