Macro Afternoon

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by Chris Becker

Oils is oils today in Asia with a fall in energy stocks across the region after last night’s fallout on American bourses from the sweet Texas Tea. Only Japanese stocks put in a positive result due to the weaker Yen, with currency traders focusing on the Australian dollar today due to the late and world losing ABS quarterly CPI data print. Funny how a currency can move half a cent on a three month old report mainly due to the price of vegetables….

The Shanghai Composite was sluggish going into the long lunch and is selling off now, down nearly 0.6% going in the close with the Hang Seng worse, down nearly 1% but neither are threatening support levels as yet.

In Japan, the Nikkei continues to build on its breakout, closing up 0.2% as the Yen weakened early on in the session before coming back a little into the close. The market broke out last week above daily ATR resistance and while overbought here its still on track to hit the April high just below 18000 points.

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S&P Futures are unphased for now with the four hourly chart of the S&P500 looking to break ATR support going into tonights session with all eyes on the 2130 point region:

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For the ASX200, it was a big selloff day, down 1.5% to 5359 points as the CPI print came in “hot” (LOL). This broke key support so we could go down to 5200 points very quickly unless the RBA cuts soon, which isn’t going to happen until December.

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Aussie dollar did no favour for closely stopped traders (read:me) as it swung down to 76.20 on the release before shooting straight through to the 77 cent handle against the USD. Its maintained that level going into the London open, which if history shows us should hold on as markets re weight the chances of another RBA rate cut:

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The market to watch tonight however is oil, with the DOE printing its weekly crude oil inventory tonight – a surplus could blow that daily trendline out if no other production freeze/cut news is forthcoming from the OPEC cartel:

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The data calendar tonight also includes US advanced trade data and preliminary services PMI so it will be a busy night for USD traders.