Macro Afternoon

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by Chris Becker

Outside of Japan it hasn’t been a fun day in Asia with most regional stock markets closing in the red, in opposition to a strong lead overnight on US and European markets. The stronger USD on the back of hawkish Fed comments is only finding resistance against the Aussie as commodities retreat slightly

In mainland China the Shanghai Composite is down around 0.2% going into the close at 3140 points, still trying to build above key support at the 3100 point level. The Hong Kong based Hang Seng Index is doing the same, down 0.2% to 25875 points, still way above ATR support and still ready to retest the 26000 resistance level:

Japanese stocks continue to have their good start to the week, with the Nikkei 225 closing up 0.8% higher to 20,230 points building on the breakout above 20,000 points previously. This is all due to the weak Yen, with the USDJPY pair hovering just above the 111.50 mark, retreating ever so slightly in the Asian session after flying higher overnight. As I said this morning, the next target is up at the 114 handle:

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S&P futures are up slightly as traders maintain the cautious mood:

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The ASX200 has retreated all of its Monday gains after the Moody’s downgrade of Megabank and a note from Morgan Stanley on how to profit from the inevitable downfall. What a lovely one-two punch! The bourse closed down 0.8% to be back below 5800 points with banks leading the way alongside energy and gold stocks.

The higher Aussie dollar isn’t helping, still rising steadily against the USD and other major currencies, hovering above the 76 handle against USD. There remains possible resistance forming at the 76.30 level overhead which is where this current move is probably headed:

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The data calendar continues with a fairly quiet session, with only two speeches from SNB and BOE officials to watch out for..