by Chris Becker
Risk on remains the trade as Aussie markets return to the fold and react relatively positively to a weak CPI print, with government bonds selling off slightly, but stocks rallied. The rest of Asia is also following the positive mood from the US, while commodity prices slip slightly as the USD firmed against the majors.
In China, the Shanghai Composite is still positive going into the afternoon session, currently up 0.3% to 3145 points, respecting the next level of crucial support at 3100. The Hong Kong based Hang Seng is doing better, up 0.6% to be around 24600 points as it continues to hold on to its previous gains and breakout above the daily downtrend line:
The Nikkei is having another very solid day as expected, rising over 1% to be above 19000 points as the Yen maintains weakness against USD. The USDJPY pair is trying to build here above the 111 handle but is struggling, hitting natural resistance (note the left hand of the chart) at this level- watch for a momentum reversion:
S&P futures are very positive with a Trump announcement on tax reform (pfft) expected later tonight:
The ASX200 is back and liking the mood, finishing up 0.7% higher to cross 5900 points again, at 5914, mainly due ot financials as iron ore takes a little sail out of the wind of the major miners.
The Aussie dollar however really struggled on the CPI print, falling straight down to the 75 handle after hovering at the 75.30 level in expectation of a higher print. This takes it back to its previous support level, so watch below tonight on the London open:
The data calendar is relatively quiet tonight with DOE oil inventories the only official spotlight, with more US corporate earnings on the way.