Asian Open: Biotech Leads the Way in an Otherwise Quiet Session

US regulators approved Alzheimer drug Aduhelm, sending Biogen’s stock soaring around 60% and leading to a mid-session trading halt.

Stocks (3)

Asian Futures:

  • Australia's ASX 200 futures are up 5 points (0.07%), the cash market is currently estimated to open at 7,286.90
  • Japan's Nikkei 225 futures are up 130 points (0.45%), the cash market is currently estimated to open at 29,149.24
  • Hong Kong's Hang Seng futures are up 15 points (0.05%), the cash market is currently estimated to open at 28,802.28

UK and Europe:

  • UK's FTSE 100 index rose 8.18 points (0.12%) to close at 7,077.22
  • Europe's  Euro STOXX 50  index rose 8.27 points (0.2%) to close at 4,097.65
  • Germany's DAX  index fell -15.75 points (-0.1%) to close at 15,677.15
  • France's CAC 40 index rose 27.9 points (0.43%) to close at 6,543.56

Monday US Close:

  • The Dow Jones Industrial fell -126.15 points (-0.36%) to close at 34,630.24
  • The S&P 500 index fell -3.37 points (-0.08%) to close at 4,226.52
  • The Nasdaq 100 index rose 32.117 points (0.23%) to close at 13,802.89


Learn how to trade indices


Indices:

The Nasdaq biotech index (NBI) rallied 3.62% thanks to the approval of Biogen’s (BIIB) Alzheimer  drug, and providing levels of volatility usually associate with meme stocks. Its share price rallied over 63% at its high yesterday to a new record, before tailing off to close ‘just’ 38.3% up for the session and beneath its previous record high.

Elsewhere, with earnings out of the way and several key data points pending this week, the lack of a catalyst has taken its toll on volatility. The S&P 500 closed effectively flat at -0.08%, with six of its 11 sectors closing lower (led by materials, financial and energy stocks). The Dow Jones closed -0.36% lower whilst the Nasdaq 100 settled for a minor 0.23% gain. The Russell 2000 rose 1.43% led by growth stocks (1.79%), whilst value stocks rose 1.12%.

The ASX 200 broke a three-day rally after failing to hold onto earlier gains or its break above 7300. Its RSI (2) had risen to 95.5 on Friday warning of a possible down day, and whilst we remain bullish overall we do see the potential for a minor retracement. Heading into today’s session, key resistance sits at 7289.50 – 7291.20 and 7296.30 – 72980.0, with key support sitting at 7280 and 7270.0.


ASX 200 Market Internals:


ASX 200: 7281.9 (-0.19%), 07 June 2021

  • Information Technology (2.8%) was the strongest sector and Consumer Discretionary (-0.89%) was the weakest
  • 9 out of the 11 sectors closed higher
  • 98 (49.00%) stocks advanced, 89 (44.50%) stocks declined
  • 13 hit a new 52-week high, 0 hit a new 52-week low
  • 73.5% of stocks closed above their 200-day average
  • 68.5% of stocks closed above their 50-day average
  • 77.5% of stocks closed above their 20-day average

Outperformers:

  • + 39.03%   -  Altium Ltd  (ALU.AX) 
  • + 6.18%   -  Nuix Ltd  (NXL.AX) 
  • + 6.13%   -  Appen Ltd  (APX.AX) 

Underperformers:

  • -6.47%   -  Skycity Entertainment Group Ltd  (SKC.AX) 
  • -5.14%   -  Corporate Travel Management Ltd  (CTD.AX) 
  • -4.91%   -  Webjet Ltd  (WEB.AX) 


Forex:

The Australian and New Zealand dollars were the strongest majors overnight, with all but the Canadian dollar rising against the US dollar. CAD was the weakest major of the session thanks to lower oil prices and the likelihood that traders squared up positions ahead of Wednesday’s BOC meeting (Bank of Canada) meeting. Month-to-date, AUD and JPY are the strongest majors whilst NZD and EUR are the weakest.

The US dollar index (DXY) fell to a two-day low and closed back below 90.00 after finding resistance at its 50-day eMA on Friday.

AUD/CHF couldn’t quite break above 0.6980 resistance and instead closed the day with a bearish pinbar just above the halfway point between 0.6917 – 0.6982. Until a break of this range is seen, range trading strategies are preferred.


CHF/JPY remains in a strong uptrend on its daily chart, although prices have been gently consolidating since reaching its 5-year high in May. Prices remain above the 20-day eMA and currently above 121.52 support. Given the RSI (2) appears set to dip below 10, level which can be associated with overbought, we are on guard for a corrective low to form and its trend to resume. Whilst this may be a little premature, we are seeking evidence that a swing low has formed, ideally above or around the 38.2% Fibonacci level at 121.30.


Learn how to trade forex


Commodities:

WTI prices remained below $70 after confirming it as resistance during yesterday’s Asian trade. A small Doji has formed below this key resistance level suggesting prices may dip lower on from a technical perspective, with next support level to monitor around 67.98 – 68.00.

Lumber futures were down another -4.5% ad sits at a 1-day low. Having fallen over 30% since its May high, lumber is now in a technical bear market. Should copper continue to fall it adds credit to the Feds argument that inflation may indeed be transitory.

As for copper, prices held above 4.435 for a second consecutive day although upside potential remains capped whilst prices trade below 4.5815 resistance. But with net-long exposure now its lowest in nearly a year, with large speculators continuing to reduce bullish exposure and increase bearish exposure, we are wondering how much longer copper prices can remain elevated. As either prices are too high, or bullish exposure is too low.

Spot gold rose to a two-day high yet remains below 1900. Given the rise of volatility (and most notably, Thursday’s large bearish candle) we suspect we could be at a ‘distribution phase’ of its trend, so we’re on guard for further losses whilst prices remain beneath the 1916.53 high.


Up Next (Times in AEST)


You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.

More from Commodities

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.