ASX200 firms ahead of tomorrows AU jobs report

Tomorrow at 11.30 am Sydney time, Australian Labour Force data for March will be released. Expectations are for a 25k rise in employment and the unemployment rate to fall again to 3.9%.

While this will be an important data point for the ASX200, overseas developments will continue to play a strong hand in driving the ASX200 into the end of April and whether it can avoid its traditional 3-5% pullback in May.

A lower-than-expected core US CPI print overnight (0.3% vs expectations of 0.5%) has raised hopes that peak inflation may be close by. After a meteoric rise, U.S yields eased overnight, a move that, if sustained, will provide some respite for both overseas and local growth/tech stocks.

Turning to the commodity and energy markets which have played a big part in the ASX200s outperformance in 2022.

Crude oil rebounded above $100 p/b overnight after Russian President Putin said peace talks were at a "dead end". The rally was also supported by news that Shanghai's lockdown may ease even as Covid cases remain at record levels.

Technically the pullback in crude oil from the early March $130.50 high appears corrective. Should the uptrend in crude oil resume, ASX200 Energy stocks will likely follow.

Elsewhere in the commodity complex, the iron ore price rebounded back above $155 p/t as blast furnace activity picked up in the Tangshan region, news that Shanghai's lockdown will ease and reports that Chinese authorities will again ease monetary policy.

These developments should support the price of iron ore and the big miners listed on the ASX200. The ASX200 is currently trading up 16 points at 7470.

The pullback from last week's 7573 high appears corrective rather than impulsive at an index level. This indicates the uptrend remains in place.

Providing the pullback from the 7573 continues to exhibit corrective characteristics and the index remains above the critical support at 7350/30 coming from the 200-day ma, a retest and break of the August 2021 7632 high remain the base case.

Source Tradingview. The figures stated are as of April 13th 2022. 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

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