by Chris Becker
Markets are getting riggety risked as the Fed refills the punchbowl overnight with the positive lead turning into more gains on Asian markets and a lower USD. The turd in the punchbowl though is the Yen, which has retraced all its losses against USD and remains strong at 100 on the USDJPY pair:
But the usually inversely correlated Nikkei has pushed this aside as the short end of the yield curve is more effective for now, rising nearly 2% in trade today. Chinese stocks have done well too, with the Shanghai Composite up 0.5% and starting to finally climb above terminal support at 3000 points.
As for the ASX200, the gains have been more modest, only up 0.6% to 5375 points with resource stocks climbing on the lower USD as bank stocks go nowhere. Eurostoxx futures are higher, up 0.5% while the S&P500 is also starting to pick up which bodes well for the risk merchants tonight.
Turning to commodities, WTI remains elevated, nearly above the $46USD per barrel level while gold has come back a little as expected. The London fix will soon rectify this overdone move with a pullback to $1330USD per ounce likely:
In other currencies, the Aussie dollar is pushing ever higher, at over 76.50 and coming up to its two week high. This is way overbought however, so like gold I expect a pullback here:
Euro has surged in the last hour on re-rating and filling stops as the ECB publishes its economic bulletin which is bullish to say the least, pipping above the 1.12 handle – a big move that may have legs here:
The data calendar quietens down finally with US jobless claims and house prices/sales later tonight.