Macro Afternoon

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by Chris Becker

A very mixed day in Asia after what looked like a good lead overnight from risk markets, with response to the dovish Fed minutes muted by resumed Korean tensions and a burgeoning Yen. Stocks were down across most of the region. Commodities were the highlight with oil rebounded a little, while industrial and precious metals rallied.

In mainland China the Shanghai Composite has risen slightly, currently up 0.3% to 3256 keeping temporary support at bay above the 3200 point level. The Hong Kong based Hang Seng Index is worse off, down the same to 27334, but still above daily support at 27000 points. This bounceback remains weak so far and the Hang Seng needs to get above the high moving average band at 27450 or so soon to arrest this dip:

Japanese stocks are still somewhat stable, retreating only a few points even as the Yen strengthens against USD. The Nikkei closed about 0.1% lower at 19712 points, still well below the 20,000 point level. The USDJPY pair is pausing here after its big reversal overnight on the dovish Fed minutes, still a little below the 110 handle. This is the area to watch tonight as ATR support looks like failing here:

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S&P futures are slowly building here as the pennant pattern on the four hourly chart indicates a potential break to the upside above 2468 points:

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The ASX200 had a very choppy session before selling off in the afternoon to be down 0.1% at 5779 points.

The Aussie dollar has pushed through the daily downtrend line on the back of the jobs number print, dicing with the 80 cent handle against USD. There’s not much upside potential here, even with the dovish Fed position, with my target at 80.50 not far away:

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The data calendar tonight includes the latest ECB minutes plus a round up of US industrial production and other numbers.