Macro Afternoon

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by Chris Becker

Asia starts the week in a bad mood following the frustrating inaction in Washington on Friday. The fall in US stocks translated into falls across the region, save China, with S&P futures dropping alongside the USD as the Yen powered ahead providing a big headwind for domestic Japanese stocks.

The Shanghai Composite is putting in a scratch session after coming back the long lunch break still at 3269 points, still trying to climb above local support at the 3200 level. The Hang Seng Index however is following the rest of Asia, down nearly 0.9% to 24270 remaining just above recent resistance. The high moving average is no longer being respected on the daily chart so the next level to watch is the low moving average and a crossover in momentum for a possible short swing position:

HSI.fsDaily

Japanese stocks are off more than 1.5% as the Yen is firming heavily against USD on a safe haven trade. The Nikkei is down below 19000 points, breaking a key support level that has been in place for weeks. Only a significant rally in USDJPY can save it from a correction with the pair heading straight to the 110 handle on the Tokyo open and sitting there as we head into the London session:

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S&P futures have sold off sharply on the Asian open, taking out last week’s lows so we could be in for a big selloff tonight:

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The ASX200 was actually one of the better performing bourses, with a sharp dip at the open that has since recovered, closing down only 0.1% in the negative at 5746 points. Financials have lifted slightly with Newcrest up sharply on the gold price, while the big miners BHP and RIO are off nearly 3% on the iron ore price.

The Aussie dollar tried to rally on the Sydney open, but has found stiff resistance so far today, just pipping above the 76 handle against USD. Rolling resistance above 76.40 is the target to watch overnight:

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The data calendar starts the week slowly with a German IFO survey and a few Fed speeches to take note of overnight. There’ll probably be more drama with Trump complain tweeting about yet another failure of his administration to get anything done….