Macro Afternoon

Advertisement

by Chris Becker

Its all about the tax cuts as the US Senate votes tonight, holding risk markets in thrall as Asian stocks were mixed on the first day of the month. Japanese CPI was as expected this morning with the Yen slowly its recent selloff, while Aussie dollar remains in the doldrums against USD.

In mainland China the Shanghai Composite is drifting along doing nothing, down a few points before the close and still hanging on to support at the 3300 point level. The Hang Seng Index is off a bit further, down 0.3% to 29,109 points continuing its breakdown from its daily uptrend. The previous inability to make a new daily high coupled with a fall below the low moving average at 29300 signals a potentially wider rout down to support at the 28500 level:

S&P futures are steady, as I expect a minor retracement tonight on Wall Street:

Advertisement

Japanese stocks continue to be positive as Yen weakened further against USD, with the Nikkei closing 0.5% higher to 22847 points, making another new daily high as the consolidation phase is finalised. The USDJPY pair melted up slightly to the mid 112 level, wanting to push higher but hitting some resistance here, matching last week’s highs:

Advertisement

The ASX200 again tried to reach above 6000 but only managed a small uptick, gaining 0.3% to 5989 points as the banking sector put in a mixed day. Most bank stocks lifted after yesterday’s rout, but was offset by the drooping mining sector.

The Australian dollar continues to be weighed down here by external forces, remaining below the 76 handle against USD and hanging on to this week’s session lows:

Advertisement

The data calendar concludes the week with a slew of Canadian releases, followed by the US ISM employment print.