by Chris Becker
A more positive day for stock markets in Asia, led by Chinese shares which are finding needed support from official intervention and a much strong Yuan, including more PBOC market operations. This liquidity spilled over to other bourses – all save the ASX200 – as the fallout from the one-two punch of a higher Pound Sterling and lower USD overnight continues on currency markets.
The Shanghai Composite recovered from the get-go and is up 0.3% after the lunch break, trying to build on yesterday’s long tail of buying support at the lows, now just above key support at 3100 points. The Hang Seng is moving even higher, up 1.2% in a solid session and now building some serious momentum:
Stocks are positive in Japan with the Nikkei up nearly 0.5% and almost above 19000 points, crossing below for the first time since Xmas previously. The USDJPY is slowly building after being so oversold with some Yen weakness creeping in on the back of the Yuan fix today. I’m watching overhead ATR resistance on the hourly chart to come under pressure tonight:
S&P Futures are building with the optimism, up several points and about to reach the former highs of last week – traders are hoping this sticks coming into tonights open:
The ASX200 had a so-so day, gapping down in the morning playing catchup with the overnight lead before recovering slightly to end the day down 0.3% with banks leading the charge.
The Aussie dollar is moderating at the moment going into the London open with a pullback as expected to 75.40 with no new hourly highs made since last night. It will take another Treet to get the USD moving again, but watch the low moving average and London’s previous open at 75.20 or 75 for signs of real pullback:
The data calendar tonight will focus on the US December CPI print after a slew of European PMI and CPI final prints.