by Chris Becker
A mixed day in Asia as traders watched in horror as the first US Presidential debate unfolded on their screens, with the Mexican Peso jumping on the result, as other safe havens like Yen and bonds sold off quietly. Stocks were generally boyous, reversing the sour mood overnight as the markets love a Clint-ton, not a Drumpf.
The Japanese Nikkei rose nearly 1% as the Yen weakened against the USD, taking back most of the previous session losses and keeping above its trendline from the July rally low.
Chinese stocks came back after yesterday’s slump with the Shanghai Composite rallying into the close, up nearly 1% but still just under terminal support at 3000 points.
As for the ASX200, it was the loser of the day, falling half a percent although it opened much lower, clawing back some losses in the afternoon. Bank stocks were the main game to blame, falling in line with the German DAX overnight.
Eurostoxx and S&P500 futures are up 0.7% going into the London session so it looks like a positive reaction to the debates is at hand.
I’m watching the gold fix going into the London session for gold, which is slipping back to support as it is unable to make a new daily high. The hourly chart below shows a possible short entry here at $1332 or lower which would take out last weeks low:
In risk currencies however, the Aussie dollar is a-booming, up almost to 77 cents against the USD with a very solid session today and is making a new daily high. Way overcooked already but this could have legs up to 77.30 or so:
A better opportunity maybe available with Pound Sterling, where the hourly chart of Cable (against USD) shows a potential breakout following the completion of a falling bullish wedge pattern. I’m watching the 1.30 handle closely, and the crosses as well for signs of a quick long here:
The data calendar tonight includes US house prices (Case/Shiller), preliminary services PMI and a speech from the Federal Reserves Vice Chairman Stanley Fischer. Actually lots of speeches this week so watch out!