by Chris Becker
Outside Australia its been a good day on stock markets in Asia, with the real angst in currency and bond markets as the real money starts to realise that post-crisis normalisation may be at hand. In other words, the punch bowl is being take away!
First to stocks, where the Shanghai Composite is having another holiday with the Hong Kong Hang Seng instead providing a view into the Middle Kingdom, up 0.4% and holding on to previous gains. In Japan, the Nikkei closed up 0.6% to just over 16,800 points building on its own gains as the Yen continues to weaken appreciably against USD:
Resistance overhead here at 103 for USDJPY is the area to watch tonight and Governor Kuroda this afternoon was egging on about lowering rates if needed to get price rises while PM Abe is staving off election calls as the domestic economy continues to slow down.
As for the ASX200, it slumped at the open, and could not get any direction throughout the session, closing down 0.6% as it bangs its head against resistance at 5500 points. I contend we’re in a holding pattern here until Friday nights NFP, with profit taking or repositioning the order of the day.
In other currencies, the one to watch tonight is Pound Sterling after it fell out of bed previously, there is equal potential for a sharp rise on a swing long play OR a doubling down of risk as it tumbles further. Watch support at the 1.27 handle very closely:
In commodities I’m watching both gold and silver with a small swing long playing out in the Asian session for the latter, which could presage a short covering exercise in gold later tonight after its slaughter previously”:
The data calendar tonight includes EZ wide retail sales numbers, the US trade balance and ADP employment prints but most imporantly the non-manufacturing ISM print which the Fed will undoubtedly hinge on