by Chris Becker
An unsurprisingly downbeat session in Asia today in preparation for the Trump-Xi meeting after US stocks retreated last night on a hawkish Fed minutes. With the Fed ready to pull the happy juice out of the punch bowl, risk is returning to safe havens like Yen and Treasuries while stocks and commodities are retreating as a result.
Chinese stocks were the only highlight today with the Shanghai Composite closing up 0.3% to 3281 points as it builds its momentum with 3300 points the key zone to breakthrough. The Hong Kong based Hang Seng was less lucky, falling 0.6% almost making a new daily low as it remains stuck in a holding pattern on the daily chart:
Japanese stocks fared the worse as slightly as the Yen rallied strongly against USD. The Nikkei closed down 1.4% breaking a significant support level on the daily chart, signalling a major selloff. The USDJPY pair fell straight down to near terminal support around the 110.60 level. This is just a return to the major downtrend as USD retreats:
S&P futures are relatively steady in anticipation of the Trump/Xi meeting after last nights selloff – the area to watch is the intrasession low at 2335 points:
The ASX200 basically took back its previous gains by retreating 0.3% to 5856 points. Financials were the biggest loser as the APRA noose tightens, with Megabank losing more than 1%
The Aussie dollar is now accelerating its falls, never touching the high moving average on the AUDUSD four hourly chart. Its currently hovering at a new weekly low at 75.50 against USD going into the London open and if the 75 handle breaks we could see a full retracement to the previous weekly low at 71.50:
The data calendar continues tonight with a big speech by Mario Draghi in Frankfurt, plus the first day of China-US talks at Mar-a-lago, plus initial jobless claims in preparation for tomorrow nights NFP.