by Chris Becker
Heading into the vote on the Republican tax plan, risk markets are taking the foot off the accelerator with most stock markets in Asia retracing or treading water on lower volumes. The action is in the bond market with Treasuries selling off while Aussie and German bonds also see high single digit increases in 10 year yields. Commodities are relatively unchanged while Bitcoin has been crashing over the adoption of Bitcoin cash.
In mainland China the Shanghai Composite has given back all of yesterday’s gains to be down 0.4% at 3282 points, still keeping clear of former critical key support at the 3300 point level. The Hang Seng Index is treading water, slightly unchanged just above 29200 points still unable to make a new daily high:
S&P futures have lifted slightly but still remain under pressure from the previous dip:
Japanese stocks are the only positive in the region as they get a tailwind due to a weaker Yen, with the Nikkei 225 up 0.2% to 22891 points, still unable to close above overhead resistance at 23000 points. The USDJPY pair has almost met its overnight high, currently sitting right on the 113 handle and looking to break even higher tonight with ATR resistance at 113.20 the key level to beat:
The scratch results extend out to Australia with the ASX200 slumping at the open before recovering to finish a bare 0.1% higher at 6075 points. While bank stocks inched higher, it was industrials that suffered, including embattled Retail Food Group, down another 17% today – no donut for you!
The Aussie dollar continues to remain elevated still hovering above the mid 76.50 level against the USD. While momentum remains positive, the USD is coming back and is likely to go higher once the tax bill is passed, so we could see a retracement here back to the 76 handle:
The economic calendar continues tonight includes three events to take note of, first BOE Governor Carney speaking at a parliamentary hearing in London that will be Pound Sterling sensitive, followed by US home sales and a DOE inventory report.