Macro Morning

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by Chris Becker

Monday mornings are always the worst time of the week for Asian markets as the lead from the US and Europe is a couple days old and we have to absorb any news/events/releases over the weekend – i.e no handholding.

The dominant stories are Iraq and Ukraine – which should see energy prices bid, but as I mentioned in my Trading Week wrap, oil is very overbought in the short term and we could see a correction in the early part of the week. This could translate into further buying opportunities later, particularly on the back of any further bad news (which seems to be the case).

This morning should see the ASX200 come under pressure – iron ore prices continued to fall on Friday – and hourly futures, whilst bid on Friday, are not robust coming into the open up only 1 point:

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Local currencies are very quiet as well, with USDJPY looking poised to breakout on short covering – if it gets any positive leads – on the hourlies, but this is a low probability setup.

AUDUSD is also taking a breather from its recent rally and may move if the RBA Assistant Governor Christopher Kent does any jawboning (probably not given RBAs reluctance to do, well anything about the high dollar).

Not much else to look forward to locally, all eyes will be on the Eurozone CPI figures later tonight and the FOMC meeting early tomorrow morning.

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Maybe go and watch the season finale of Game of Thrones this arvo instead?