by Chris Becker
Markets in Asia reacted positively to last nights lead following the Fed’s interest rate rise as the conga line of tightening fiscal policy continues with the Chinese central bank raising rates today, the BOJ holding fire and the BOE meeting later tonight. Oil and gold rose as did the other undollars with the USD continuing to taper.
The Shanghai Composite closed nearly 1% higher at 3268 points starting to build momentum as it bounces above local support at 3200 level. The Hang Seng Index is up nearly 1.7% to 24189 points, smashing through the 24000 points resistance level. This is a solid breakout, slightly exceeding the previous daily highs before this dip so should be supportive for a longer rally:
Japanese stocks are putting in a scratch session but at least aren’t retreating as the Yen strengthened significantly. The Nikkei closed flat at 19,590 points. The four hourly chart of the USDJPY pair shows continued overhead pressure as the US dollar bulls continue their retreat. I’m watching terminal support here at the 113 handle to come under stress tonight for another breakdown:
S&P futures are melting up again in another positive move. Buy defense stocks as the Trump administration is set to boost already ridiculously ludicrous defence spending another 10% higher (deplorable to say the least…but a good trading opportunity):
The ASX200 came out strongly but sold off in the afternoon on the back of the surprising unemployment print, finishing only 0.2% up at 5785, still shy of key resistance at 5800 points.
The Aussie dollar retreated initially on the Sydney open after the big jump overnight on the FOMC meeting. It absorbed unemployment fairly well, but still remains under the 77 handle going into the London open.. I’m positioning for a follow through here later tonight:
The data calendar switches gears back to Europe tonight with the BOE monthly meeting, then back to the ‘States with US initial jobless claims.