by Chris Becker
Asia shares were quite mixed today with the ASX200 taking a big hit while Hong Kong stocks continued their rally. Aussie 10 year bonds rallied alongside the dollar while commodities retreated. The BTFD crowd continues to pile in on US stocks even with concern over the viability of Trump’s fiscal disaster in his tax plans and the possibility of a new, more hawkish chief of the Federal Reserve.
In mainland China the Shanghai Composite remains closed alongside Korean and Taiwanese markets while the Hong Kong based Hang Seng Index put on another 0.6% after its big 2% move yesterday. This leg up keeps it well above local resistance at the 28000 point level and on track for its 2007 high:
S&P futures are steady suggesting a slight pause tonight in anticipation of the ISM services release and the possible new leadership of the Federal Reserve:
Japanese stocks barely closed in the green up as the Yen strengthened against USD with the Nikkei finishing at 20626 points, still above resistance at the 20,000 mark. The USDJPY pair has undergone the possible retracement back to the moving average band at the 112.50 level that I suggested yesterday, but should get some support at the 112.25 level tonight:
The ASX200 continues to be the odd man out in Asia, falling nearly 1% to finish at 5651 points and now solidfying its position well below the 200 day moving average. This was a broad selloff with financials and minerals stocks off, plus staples like Woolworths (WOW), down nearly 2% as it awaits an ACCC ruling. Not a good move here with the Aussie dollar firming at the same time, lifting up to the 78.60 level against USD and possibly about to breakout above rolling resistance:
The data calendar includes the US ISM non-manufacturing print tonight plus European retail sales data.