by Chris Becker
The USD continues to decline after Asian markets absorbed the FOMC meeting overnight, including further talking down by the Trump administration amid more safe haven buying of Yen and a surprise trade surplus locally in Australia sending the AUD soaring. Stock markets fell back again with Wednesday’s reprieve not lasting long.
Chinese stock markets, including the Shanghai Composite and Hang Seng Index are closed until Friday due to the Chinese New Year.
Japanese stocks are down over 1% with the Nikkei falling below key support at 19000 points again as Yen strengthens considerably against USD. The four hourly chart for USDJPY shows how close price is at terminal support as it reaches a new three weekly low. If broken, this is not good for domestic Japanese stocks regardless of good earnings:
S&P Futures are being sold off during the Asian session, coming back to support at the 2265 point level as momentum remains negative for US stocks:
The ASX200 started the session on a good note, absorbing the trade surplus and the higher AUD as a result before selling off in the afternoon as traders got nervous surrounding the news of Trump’s belligerent attitude towards Turnbull by backing down on the refugee deal. The market closed down 0.15% to 5645 points led mainly by selloffs in Aussie dollar exposed issues like CSL and Qantas while Newcrest surged 2% higher on the ever higher gold price.
The Aussie dollar zoomed straight out of the gates and past resistance at the 76 handle on the trade surplus print, hitting 76.40 as we head into the London open. This re-rating will have longer term ramifications, but theres tomorrows NFP and next weeks RBA meeting to get through first:
The data calendar includes the Bank of England monthly meeting followed by the US initial jobless claims number as a preview for tomorrow nights NFP.