By Chris Becker
The preliminary manufacturing PMI in the US overnight surprised on the upside, and instead of the abnormal good economy=bad for risk assets meme, this came alongside improved earnings overnight. This week will see quite a few heavyweights post earnings and while the expectation is not much on the upside, US corporates have not contracted earnings as expected. In currency land the USD remains strong, with Yen retreating alongside a depressed Euro while the Pound just floated along. Commodities were also under pressure alongside their proxy, the Australian dollar as oil retreated with no news on OPEC production cuts.
Looking at Asian stocks first, where the Shanghai Composite shot out the gate yesterday on the back of another lower Yuan fix, up 1.2% with three closes now above the closely watched 200 day moving average. My target at the former high at 3140 is almost done and a close above that level would be require to turn this into a proper rally:
