by Chris Becker
A case of weekend news catch up here in Asia as the inevitable gap caught a few traders short as USD spiked higher and caused volatility across Japanese and Australian shares in particular. Yields on US Treasuries lept higher taking back the retreat on Friday night while commodities fell off in the wake of the stronger USD.
In mainland China the Shanghai Composite is having another bad start to week, down 0.3% to be just hanging on to support above the 3300 point level. The Hang Seng Index is doing much better, up 0.5% to 29,207 points as it claws its way back from the previous breakdown from its daily uptrend. While a good start, its not yet a new daily or session high with the target still down to support at the 28500 level:
S&P futures have gapped higher, well above Friday’s turbulent session extremes, reversing the falls on the “fake” news surrounding Trump (where there’s smoke, there’s an orange fire):
Japanese stocks aren’t as positive, even with a weaker Yen against USD, with the Nikkei closing 0.5% lower to 22707 points, taking back all of Friday’s gains and setting up a potential bearish double top pattern on the daily chart. The USDJPY pair gapped significantly higher on the open, almost back to the 113 level and surpassing last week’s highs:
The ASX200 again tried to reach above 6000 but sold off during the rest of the session to close down 0.1% to 5985 points as the banking sector continued to weigh on the entire market. Luckily, iron ore majors like Fortescue and BHP lifted higher to offset, but its not going to be enough if the banking commission gains momentum.
The Australian dollar gapped lower on the open below the 76 handle against USD, had a small whiff of a possible rebound before selling off this afternoon to set itself for a weak night when the City opens later:
The data calendar starts the week very slowly with some final prints on US Factory Orders and very low tier European releases the only blips on the radar.