So, the basic message out there in risk-land is: sell USD, buy everything else. Its a pretty simple meme that has a potentially large volatile payoff in the end for those willing to go long USD or short risk on very cheap risk premia…Anyway, stocks across Asia have rallied with Yen gaining against USD while the Yuan reached its own two year high against the once-King of currencies.
In mainland China the Shanghai Composite has had a mixed start to the week, currently off 0.4% after the long lunch break but still above resistance at 3400 points. The Hang Seng Index is still advancing however, up 0.8% to 31688 points as this uptrend blows up ever higher into new yearly highs:
S&P futures continue to push higher as well as the market sets up for another great week:
Japanese stocks have done relatively well given the advance in Yen, with the Nikkei 225 closing up 0.26% to 23724 points. The USDJPY pair has slumped again, straight through the 111 handle and into the 110.60 area in reaction to Friday night’s US CPI print and continued comments from Governor Kuroda not dissuading fears about deflation:
The ASX200 has start the week in better form but again has failed to hold onto to its opening gains, selling off throughout the afternoon to finish only 0.12% higher at 6077 points.
The Aussie dollar is ripping higher though on the sell USD meme, gapping higher nicely to advance further above the 79 handle. There’s nothing stopping the Pacific Peso here but momentum is way overcooked and should be signalling a pullback soon:
The economic calendar starts the week very quietly given the long weekend in the US, with no mid or high tier releases in Europe either.