CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

ASX200 stalls ahead of NAB business confidence data

August 9, 2021 7:06 AM

An impressive performance despite an ongoing six-week lockdown in Greater Sydney and lockdowns in Victoria and Queensland, the effects are likely to be viewed tomorrow in the release of the NAB Business Survey.

Last month the business conditions component of the NAB Business survey fell to +24, from May's record high reading of +36. The decline was broad-based across segments, capturing Melbourne's snap lockdown in early June but predating Sydney's current lockdown.

Due to Sydney's extended lockdown and rising price pressures, the expectation is for business conditions to fall again to +10 when the data is released tomorrow at 11.30 am.   

Also likely to influence the near-term direction of the ASX200, the release of earnings reports over the next three weeks, and how much further iron ore prices fall in the near term.

Further to the last point, China trade data over the weekend showed that Chinese demand for iron ore fell again in July, with imports at their lowest in 14 months. At the same time, combined iron ore exports from Australia and Brazil have surged partly due to Brazilian powerhouse Vale lifting supply back towards pre-Covid levels.

Iron ore prices have fallen by ~20% in the past three weeks, from $220 p/t to $170 p/t, a move that has weighed on the prices of the big miners. BHP is now trading about -5.50% below its July high, with FMG over 15% below its July high.

Technically the ASX200 today formed a daily Doji candle, very close to the top of 6-month trend channel resistance at 7600, a sign the strength of the uptrend is waning.  

As a result, we would be very cautious about chasing the rally at current levels and prefer to buy a pullback leaning against trend channel support near 7200.

Source Tradingview. The figures stated areas of 9th of August 2021. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website 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.

© City Index 2024