by Chris Becker
It was the Bank of Japan’s turn to churn markets with another round of stimulus, but this one failed to detonate as no helicopter money was forthcoming, as deflation continues to take hold in the island nation. Household expenditure is sinking at more than 2% contraction annually, confirmed by retail sales slumping at nearly the same rate. This sent Yen both soaring and melting with epic volatility:
Standing back looking at the daily chart the impact of the BOJ limited round of stimulus is causing appreciation across the board, with USDJPY on track to reach 100 again:
Asian stock markets were mixed with the Nikkei actually putting on gains, up 0.5% while Chinese stocks are slipping once more. The Shanghai Composite is down 0.4% and below 3000 points, confirming to me we’re seeing the end of the recent bear market rally.
The ASX200 closed in the green – barely – helped by a late rally, as both bank and mining stocks were mixed. Fortescue fell 4% as its current price action resembles my patented (sic) KC Signal, too fast, and soaring too high – its coming down:
The currency to watch tonight is the Euro, with 2Q GDP print bound to push this beautiful pennant formation on the four hourly chart one way or the next as the point of control at the 1.11 handle battle is almost over:
The data calendar tonight will again be all about Europe with second quarter GDP and CPI results the ones to watch. Its repeated in the US with its own GDP print including the Personal Consumption Expenditure – PCE – metric that has a major impact on the Fed’s rate agenda, plus another oil rig count.