By Chris Becker
Remember to read “Trading Week“, published Saturday morning, to put these events and ideas in context.
Charter boat? Asian equity and commodity to bounce on PBOC 25bps cut? What charter boat? The ASX200 fell just over 1% today to 4063 points, rejecting resistance at 4120 points clearly:
The market was closing in on short term resistance and as I said yesterday would require a breakout from that level for a new rally to emerge from this temporary bounce.
Well that hasn’t happened and the old paradox of “everything is fine, we just need more stimulus to help” raised its ugly head across Asia today, with all bourses falling (except Thailand) and the commodity complex getting smacked.
Again, I still contend that the technical picture remains on a knife edge, and the market still requires a catalyst – probably around June 17-20 (Greek elections and the FOMC meeting) to sustain any uptrend – this remains a bear market. Leave the bottom picking to the monkeys.
The Nikkei 225 took back all of yesterday’s gains and the n some, falling over 2% whilst the Hang Seng did the same, losing 0.9%, whilst the Shanghai Comp is down again (also in a bear market, a forgotten fact that flummoxes the permabulls) by 0.5% – it seems the Chinese aren’t listening to the Australian brokers shouting from the rooftops that all is well.
On to the currency markets, the big mover was the Aussie but this time going down, falling well below 99 cents after breaking above parity last night, currently at 98.56 against the USD. The Euro is looking weaker as well going into the European market session, down by nearly 75 pips against King Dollar now at 1.2487.
Gold was hammered last night and we saw continued falls today, with the shiny currency down nearly $20USD per ounce to $1570:
The falls extended to other commodities, with crude falling over 2%, and silver also down nearly 1.5% to just above $28 USD per ounce. Iron ore continues to look weak with the current price at $130.60 USD per metric tonne, still at its November price level.
Tonight
The data flow tonight has alreaday begun, as has the opens on European bourses, down across the board. German and French merchandise trade numbers surprised on the downside, again, whilst we wait for the US to print the same later tongith.
The big data releases will be around midday tomorrow as the Chinese release their Tier 1 data for the month – CPI, PPI, retail sales, industrial production and trade balance figures. Perhaps these will be weaker than anticipated given the PBOC decided to ease interest rates for the first time in nearly 4 years?
Check out our Economic Calendar here for the rest of this week’s data prints.
You can find me on Twitter here.
Disclaimer: The content on this blog should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation, no matter how much it seems to make sense, to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The authors have no position in any company or advertiser reference unless explicitly specified. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult someone who claims to have a qualification before making any investment decisions.