by Chris Becker
The fallout from the Italian “no” referendum vote first hit Asian risk markets this morning, with the usually thinly traded Euro dropping like a stone in reaction to PM Renzi’s resignation, dropping to a near two year low. This reaction also included the uncertain close on US stock markets on Friday night from the NFP print. Euro dropped over 1 cent down to last weeks support level at 1.0560 where its holding on – just – going into the London open:
The Shanghai Composite is down over 1% after lunch as Trump stirs up The Middle Kingdom with his brand of diplomacy, falling below 3200 points and looking weak. The Hang Seng is doing slightly better, only down 0.6% but the daily chart is clearly showing a rejection of resistance around the 23000 point level, which presages a revisit of Novembers low at 22000:
In Japan, share markets have fallen nearly 1% with the Nikkei following the firming Yen as the USDJPY gapped down below the 113 handle before a small clawback later in the session. The four hourly chart shows a tightening wedge with the trendline at 112.70 the area to watch for a breakdown:
S&P Futures dropped on the Italian vote but have recovered to almost their Friday finish as FTSE futures are down going into the open:
The ASX200 fell 0.8% in sympathy to exactly 5400 points dragged down by bank stocks in the main, which will feel the fallout of the Italian referendum result.
The Aussie dollar is hitting a wall against the 75 cent level in USD, steadying at 74.50 but looking quite unable to put on anymore runs:
The data calendar tonight is relatively quiet in Europe but in the US we get the ISM non-manufacturing/services print that is very important following the unemployment print of last week.