Not the Prince
Trading Day covers the relevant moves in the Asian stock, commodity, debt and currency markets highlighting trading ideas and investment opportunities. Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context.
A red day across the board on Asian share markets, as the bears awake from a weekend of hibernation. The local market got off easy, the S&P/ASX200 closing down only 14 points or 0.3% to 4352 points. Has the recent breakout been just a bull trap? Or is this just noise?
The Nikkei 225 finished down 0.2% at 9542 points, the SSE Composite is down 0.7% at 2388 points, whilst the Hang Seng is down almost 1% at 20805 points.
The AUD fell on release of the producer price index figures, which came in very low, as well as interest rate markets pricing in a 92% chance of a 25 bps cut from the RBA at its next meeting. The Aussie is at 1.0314 currently against the USD, with only the Yen firming against Kind Dollar. The Euro remains steady at 1.3158.
Aussie 10 year bonds were bid up very strongly on the PPI, with yields falling 7 pips to 3.75% – what a year so far for bond traders:
Commodities were flat with a bearish bias, although gold had another rough day during the Asian session, down 0.5% to $1634USD an ounce whilst in AUD terms it was up $2 to $1584 per ounce.
The Stocks
Newcrest (NCM) has a bullish reversal falling wedge pattern almost complete.
This could mean a short term rebound, if it breaks above $28, but given the stock remains stuck in a bear market (with weekly prices below 200 day moving average since September last year) , I wouldn’t hold out much hope. This is another stock reliant upon commodity price volatility:
The Futures
Tonight will be another fascinating session to watch. Already the debt markets have opened by selling off, with Spanish yields crossing over 6% again, Italian bonds moving further relatively with French bonds are feeling the heat too. Naturally gilts and bunds are being bid up on flight to safety.
European data starts with German and EMU flash PMI with the latter at a very optimistic 49.3 consensus level. French business confidence just came in and “surprised” to the downside. Its a data free night in the US although more corporate earnings will follow as the reporting season rolls on.
You can find our Economic Calendar here.
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