Following the solid night on Wall Street, Asian stocks have advanced solidly across the region as commodity prices remain elevated. Oil prices are higher on tension brewing in Iran while bond yields continue to pip higher on the back of a selloff in Treasuries with Aussie 10 years making a new high.
In mainland China the Shanghai Composite has continued its advance on the starting block for 2018, rising 0.6% to be at 3369 points. The Hang Seng Index has made another new daily high, but only just after its near 2% surge on Tuesday. Its elevated here above the 30,000 point level and I’m still expecting a small retracement before another legup:
S&P futures are gaining after last night’s record high but momentum is somewhat overdone here with a further advance dependent on a good ISM print later in the session:
Japanese stocks were still closed for their extended New Years holiday with trading on the Yen still light with a small recovery during the session. The USDJPY pair is finding some support here near the 112.50 level, but this looks like setting up for another swing down as price is unable to get above the high moving average:
The ASX200 had another jumpy day, closing up a few points to 6072 on low volume taking back Tuesday’s losses. Again, no big movers at the banks but iron ore majors are doing swell on the advancing commodity with Fortescue up 3% and BHP up nearly 2%.
The Aussie dollar has tentatively retraced all of its Tuesday advance to be just above the 78 handle with a case to be made for a potential trendline break here on the four hourly chart. It may be wishful thinking, or the start of a mild retracement back to ATR support at 77.70 or so before another legup:
The economic calendar ramps up significantly tonight with several currency and market sensitive releases. First up is the only unemployment figure that matters in Europe, Germany for December. A little later its the US ISM Manufacturing print for December, plus that months FOMC minutes.