Macro Afternoon

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by Chris Becker

Asian stocks are reeling as tensions mount across the Korean peninsula and in response to last night’s poor lead from US markets. Commodities were mixed with a dead cat bounce in iron ore offset by falls in gold and oil.

In China, the Shanghai Composite is selling off going into the close, down another 0.7% to 3172 after breaking through support at 3200 points yesterday. The Hong Kong based Hang Seng is off as well, but not as far, down 0.4% to just below 24000 points as it ominously heads towards trailing ATR support zone at 23700:

Japanese stocks have put on a very small show of good fortune, with the Nikkei closing up 0.1% as Yen sold off ever so slightly against USD, but the market is still remaining well below key support at 19000 points. The USDJPY pair has tried to build on its gains yesterday, but refuses to head substantially above the 109 handle in what looks like short term positioning before the London open:

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S&P futures are starting to move slightly higher in response to Japanese stocks in the main:

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The ASX200 dropped half a percent to close just above 5800 points which is a critical support area for the local market. The bounce in iron ore stocks offset some big falls in financials with most divisions of Megabank off by at least 1%.

The Aussie dollar dropped as expected on the open, going straight through last night’s lows at 75.40 to finish just before the London open at the 75 handle proper against USD. This is looking ominous indeed, even as the Fed goes a little dovish:

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The data calendar tonight picks up with final CPI prints for the EZ, then DOE oil inventory reports finishing with the Fed’s Biege Book.