by Chris Becker
Outside Australia its been a relatively solid start to the week across risk markets in Asia today. Except the ASX200, all stock markets are up on the lower USD meme following the Jackson Hole conference on Friday. The Aussie dollar is already at its previous two weekly high and ready to go higher as other currencies also gained against USD. The missile launches by North Korea over the weekend have put a dampener on risk in South Korea, and former tropical cyclone Harvey continues to create havoc in Texas, with the oil price down, but gasoline futures higher.
In mainland China the Shanghai Composite has moved higher after its definitive breakout on Friday, currently up 0.7% to be at 3356 points. The Hong Kong based Hang Seng Index is up about half that or 0.3% higher to 27926 points. While this makes for a new daily high, it is not yet above the previous high earlier in the month just below 28000 points but all signs are pointing to a follow through here:
Japanese stocks were flat, doing better than expected on the strengthening Yen position from Friday. The broader TOPIX gained about 0.2% but the Nikkei was steady at 19450 points, still below the very firm resistance at the 20,000 point level. The USDJPY pair is still hovering above the 109 handle but looks very weak here going into the European session, so we’re likely to see another go at obvious weekly support at the 108.80 level:
S&P futures are down 0.2% as traders discern risk direction following the reaction on Friday nigh. The four hourly chart points to a potential break below the 2438 temporary local support zone here:
The ASX200 has closed down 0.6% lower dragged down by the financial sector to finish at 5746 points. CBA lost over 1% while Westpac almost lost 2% in reaction to the continued investigation by APRA. Iron ore stocks were off as well with RIO and FMG off by more than 1% but BHP is holding the line here.
The Aussie dollar is itching to get above that two weekly high at the 79.45 area. An obvious area of resistance, so I suspect if broken everyone will pile in later tonight:
The data calendar starts the week slowly with US advanced goods trade balance for July, and then a slew of Treasury auctions.