by Chris Becker
Risk is back on in Asia, as the US dollar retreated further against its major partners in signs of more hope that the Federal Reserve may begin normalising rates any time soon. The RBA minutes released today, alongside new Governor Phil Lowe maiden speech put a fire underneath the Australian dollar in particular with domestic bonds also surging due to the less accommodative approach possibly adopted following Glen Stevens departure.
Looking at stocks first, the Shanghai Composite is up over 1% to 3074 points taking back Monday’s losses, while the Hang Seng is doing even better, up 1.4% to surge back above the important 23000 point support level.
In Japan, the Nikkei has lifted another 0.3% as Yen weakened, but still struggling to get back above daily ATR resistance at 17000 points again. This is all on track for a breakout but requires a significant breakthrough with USDJPY:
As you can see on the hourly chart below, the USDJPY pair needs to get back above 104.40 and soon to help the domestic share market. Tonights US CPI print will be very important for Yen watchers:
For the ASX200, its a return to happier times following Monday’s drubbing, closing above 5400 points again with gains across most sectors with Megabank and BHP doing the heavy lifting. It’s not being helped by talk surrounding the Aussie dollar, which surged above local resistance at the 76.40 level to almost 77 cents against USD:
This was both a sympathy rise alongside a solid NZ CPI print but also Phil Lowe’s first speech, which has sparked renewed vigor in the Pacific Peso. Here we go again!
For the gold bugs, silver is presaging a possible return to favour with an Asian breakout up to $17.60USD per ounce, with gold slowing coming into focus here on the London open:
The data calendar tonight has two CPI prints for September, the UK first then US, so it will be an interesting night for Cable (GBPUSD) watchers!