Macro Afternoon

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by Chris Becker

Another positive day in Asia – just – with most bourses up or putting in scratch sessions following what should have been a good lead from overnight stock markets. The Japanese earnings season started with a bump as Toyota underperformed but the continued selloff in Yen has supported the broader market. The USD has come back slightly against the majors even as traders absorbed more Federal Reserve talk about relaxing the pace of interest rate moves higher.

In China the Shanghai Composite has gapped down after the long lunch break after being steady early in the session, currently down 0.5% to 3039 points. The once critical support level at 3100 may turn into strong resistance if these falls keep up as the bear market rally dissapates. The Hong Kong based Hang Seng is up 0.4% making another new record high – well for nearly two years. This is way, way overdone and I expect a small retracement here on profit taking:

Japanese stocks had a modest session with the Nikkei finishing 0.3% higher almost cracking the 20,000 level. The Yen is still steady since the lows of last night with the USDJPY pair remaining just above the 114 handle and unable to make further headway:

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S&P futures are dropping slightly on rising domestic political risk front as yet another new round of corporate earnings awaits:

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The ASX200 finished with a scratch session today at 5878 points, with losses in the iron ore triumvarate offset by gains by industrials with the major banks mixed across the board.Nothing to report technically as they hover around support without much breakout action.

The Aussie dollar is vainly trying to com back after being crushed recently, currently at 73.50 and bouncing along here on what could very well be a temporary bottom pattern. I’m watching momentum closely however as its no longer oversold so there is potential for a bounce back up to the 74 handle here:

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The data calendar continues tonight with two major events to watch out for – the BOE interest rate decision from its meeting first up, then US initial jobless claims.