Macro Afternoon

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by Chris Becker

Risk off? Not quite but Asian markets are not reacting well to the mixed lead from Wall Street overnight, exacerbated by the BOJ’s decision to cut its inflation target and a drop in commodity prices.

In China, the Shanghai Composite is just positive going into the close, currently up only 0.3% to 3145 points, holding above the level of crucial support at 3100. The Hong Kong based Hang Seng is about the same, up 0.3% 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 sliding a little on Yen firmness and hesitation around the BOJ statement, closing down 0.2% to 19251 points. The USDJPY pair just cannot build here above the 111 handle but price remains well above the low moving average and momentum is still positive. I’m watching that zone tonight to come under pressure alongside Euro on the ECB outcome:

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S&P futures are very flat with all eyes on corporate earnings tonight for positive sentiment:

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The ASX200 is having a fair day, closing 0.2% higher to 5921 points, trying to hold above its bullish trendline on the daily chart. The iron ore triumvarate dragged the market down, alongside Newcrest as gold prices abated, as financials just keep melting higher.

The Aussie dollar as expected is doing the mean reversion trade, coming back to but not above the 75 handle against the USD. Tonight’s durable goods order will be crucial before tomorrow nights GDP print to see which way this risk proxy will go:

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The data calendar is busy tonight with the ECB meeting outcome first up, then German CPI followed by some big heavyweight corporate reporting in the US and durable goods orders.