by Chris Becker
Its green across the board – save Japan – for Asian stocks with Chinese bourses leading the way lifting the satellite markets like the ASX up as well. The USD is weakening against most majors after a resurgence overnight that helped commodity prices, but the action remains in bond markets with Aussie yields lifting higher again.
The Shanghai Composite is bouncing back strongly today, up nearly 1% before the lunch break and just below its previous support level at 3140 points. For now this is just noise amid a correction that is probably going to long running terminal support at 3000. The Hang Seng is up 0.6%in an unexpected bounce higher as it was previously well oversold after breaking support at 20000 points. That will probably be too far a target to reach in this move:
So why are stocks falling in Japan – simple answer is the Yen is firming against USD once more, with the USDJPY pair dropping below its NY session lows throughout todays session. The inversely correlated Nikkei is down 0.4% as a result. I’m watching hourly ATR support at 117.35 on the USDJPY which could break here:
S&P Futures are steady with a slight downward bias going into the London open, trying to stay above the trendline on the hourly chart at 2260 points:
The ASX200 is going to close above 5600 points for the first time since early August, in a very solid albeit low volume day, up 0.5% mainly led by bank stocks once more.
The Aussie dollar however remains depressed, still trying to find a bottom here at the 72.50 level against USD. Last nights weak breakout above the hourly downtrend line is not sticking with price pressure at the 72.60 point pushing the last four hours of price back down smartly. I’m watching the lower moving average going into the London session tonight to come under pressure:
The data calendar tonight is again quiet, with some UK government spending numbers and US existing home sales alongside DOE weekly oil inventories.