by Chris Becker
It hasn’t been a brilliant start to the week with a mixed bag of reactions to stock markets and currencies as risk managers begin to re-position in a post-Obama presidency.
The Shanghai Composite is pushing further into its bear market rally, currently above 3200 points, up 0.5% holding on to its gains after lunch. My target remains 3400 as the Yuan fix comes in lower once more. Conversely, the Hang Seng is down 1.3% as risk their begins to realise a possible trade war is brewing in the Pacific.
In Japan, the Nikkei is surging as Yen weakens appreciably against the resurgent USD. The local bourse is up over 1% to 17665 points, now at the top end of its wide trend channel on the daily chart below. This is now well overbought but could spike higher if Yen doesn’t firm soon:
Yen was immediately sold off when currency markets opened this morning, heading above the 107 handle on the USDJPY chart. As I mentioned in my Trading Week report this morning, we could be setting up for a significant moved higher here as Abenomics Trump style comes to the fore. This is not yet overdone according to momentum readings, so I’m remaining long USD here:
S&P Futures are up slightly heading into the European session, with Eurostoxx and FTSE futures steady.
For the ASX200, it was not a good start to the week, falling in sympathy with NZ stocks as another earthquake hits Christchurch, down 0.5% to 5345 points even with a solid trifecta print on economic data from China today.
The Aussie dollar is steady so far in the Asian session, still nothing to get excited about, remaining at the 75.40 level and not making a new low here, yet:
The data calendar tonight only has one economic release to worry about, EZ wide industrial production figures plus a couple of low key ECB and Fed speeches that might move currencies a bit.