Its a better start to the month here in Asia, well outside mainland China at least as the risk on mood starts to pick up from the very shortlived dip earlier in the week. Coming into the NFP print on Friday having absorbed the latest FOMC meeting, risk traders are positioning for another series of record highs, but can it follow through?
In mainland China the Shanghai Composite keeps falling, not even stopping at support levels by closing nearly 1% lower at 3446 points. The Hang Seng Index is following suit, losing nearly 0.5% to finish at 32748 points, but still above tentative support at the 32000 point level:
S&P futures are flat and not that promising, but the short term pattern is suggestive of a breakout here from the BTFD crowd:
Japanese stocks bounced back very strongly on the back of a much weaker Yen, with the Nikkei 225 up 1.6% to 23486 points, trying valiantly to get back above its previous uptrend. The USDJPY pair has not made a new session high since before the FOMC meeting last night, but this is looking promising as the ranges tighten, so I’m positioning here for a possible breakout:
The ASX200 put in a solid session as well, closing 0.5% higher to 6090 points on the back of a weaker Aussie dollar and the tentative resumption of the risk on trade. The Aussie dollar is slipping here, falling below key support at the 80.50 level as the USD strengthens, with the real support level at the ATR support line at just above the 80 handle proper:
The economic calendar includes the usual weekly US initial jobless claims but more importantly the monthly US ISM Manufacturing survey.