by Chris Becker
No stimulus for you? Impossibru! But yes the Bank of Japan did not follow up as expected with any further QE, even though CPI slipped further into deflation as household spending fell off a cliff. In Europe German unemployment came in as expected at 6.2% and CPI came in just above deflation which means no more action on chronic unemployment in the rest of Europe from the ECB.
Finally to finish the jampacked economic calendar, US Q1 GDP came in lacklustre, the weakest start to a year in two years, further enhancing hopes that the Fed will stretch out its rate rise agenda. This helped major currencies as the USD sold off, with Yen up nearly 3% in a day on the lack of dovishness from the BOJ not helping either. But none of this helped stocks, as commodities and bonds took all the bids overnight.
Recapping Asia where yesterday the Shanghai Composite struggled again, falling 0.3% to remain well below 3000 points, and still confirming the bearish rising wedge pattern. This suggests another test of the support line at 2850 points soon and if failed, a retest of terminal support all the way down to 2600: