by Chris Becker
Market positioning before the monthly US employment release tonight is the meme for the day, explaining why the ASX200 finished exactly where it started although it was the best in Asia as Chinese and Japanese stocks fell around 1% on another strong day for the Yen.
The Aussie dollar is playing the Cantstandzya card too, shaking off the S&P finger waving with a finger all of its own, rallying from the Sydney open and playing with the 75 handle against the USD:
But this has been shortlived, and indeed it is now selling off against all the majors, Yen, Pound and Euro to boot so maybe the foreign funds are listening while locals keep their fingers in the ears about the dangerous route of the economy.
In other “golden” currencies, gold, err is also falling. The half hour chart below shows how intrasession price is respecting the downtrend of daily highs, now around $1360USD per ounce. I’ve been short with a small position here for a little bit on mean reversion but might square up before the NFP tonight. But there’s some obvious uncle points here to start shorts again (or add to longs on the dip for the longer term holders):
In local stocks, Whitehaven Coal (WHC) was the biggest mover in the ASX200, up over 10% and putting the shine on a stellar recovery, nearly tripling from its 40c lows:
For those who don’t like to catch bottoms, a simple breakout strategy (e.g when weekly momentum crosses over 100) is a late, but effective signal to ride some of these big moves. WHC does its quarterly production report next week so perhaps the 10% move today was a precursor, but it is looking considerably overbought here.
The data calendar tonight will focus squarely on the US non-farm payrolls (NFP), but we get the German and UK trade balance figures beforehand. There’s also a rig count for the crude traders to deal with, but the NFP will move the USD, bonds and well, everything around like it does each and every month. It will be a long night!