by Chris Becker
Asian stock markets are making new highs, outside of Australia of course, as traders lapped up the “positive” news from Fed Chair Janet Yellen that interest rate normalisation is a little far off for now. Chinese trade figures were helpful while bond markets were relatively quiet.
In mainland China the Shanghai Composite closed up 0.4% to take back yesterday’s losses and be back above previous resistance at 3200 points. The Hong Kong based Hang Seng Index is pushing for another big day, up 1% this time as it builds on yesterdays big surge:
Japanese stocks are flat as the Yen maintains strength against the USD with the Nikkei putting in a minor win for the day, still just above 20,000 points. The USDJPY pair is maintaining a weak support line here just above the 113 handle which will be the big uncle point if and when it breaks for shorts to pile in:
S&P futures are steady, on relatively light volume as traders weigh up the continued political risk:
The ASX200 is very volatile at the moment, launching up over 1% taking back most but not all of yesterdays losses to close back up at 5740 points. This was a basic short covering move following the big move higher on European and US stocks overnight – but can it last? .
The Aussie dollar has finally breached the 77 handle against USD again as the proxy bid trade on the Canadian interest rate hike accelerates into “far out there man” territory. I expect a retracement soon here, possibly as low as 76.80 or so:
The data calendar includes some important BOE data, than another appearance by Fed Chair Janet Yellen at the Senate this time.