by Chris Becker
Its all about central bank machinations in Asia today with the BOJ putting on an unscheduled OMO to buy bonds to help force the overextended Yen down, while the PBOC raised rates at its own OMO while leaving the Yuan fixed. Tonight will see the NFP print for January that will then force another central banks hand, with the Fed and all the rest of us in the risk complex watching closely.
Chinese stock markets have reopened after the New Year holidays (be nice if we could all adopt the Holocene Calendar! oh and FX trading on the weekends…) with the Shanghai Composite currently down 0.5% to 3142 points. The Hang Seng Index is doing only slightly better, down 0.25% and below 23000 points – watch that low moving average closely as momentum is dipping and setting up for a corrective phase here:
Japanese stocks are barely moving after the BOJ step in, with the Nikkei putting in a scratch session to still close below key support at 19000 points. The hourly chart for USDJPY shows the bounce off terminal support as it recently reached a new three weekly low. Now past the 113 handle there is some potential for it to run up to 113.50 or 113.70, but a poor NFP tonight will see it slammed back to 112:
S&P Futures are mixed at best during the Asian session, coming back to the mid point of control since the Monday slump at the 2273 point level as momentum remains negative for US stocks:
Confidence is definitely lacking locally, with the ASX200 falling 0.4% into the close at 5621 points, led mainly by mining and other commodity stocks as a newly reopened Dalian pushed prices to limit down during it first session in nearly a week.
The Aussie dollar is moderating after its big move on the trade surplus print yesterday, coming back to ATR hourly support at the 76.50 level. Watch support here and at the 77 handle for resistance when trading tonights NFP but more so for next weeks RBA meeting as everyone is calling a hold:
The data calendar concludes the week with the most important event – US unemployment or non-farm payrolls (NFP).