Its not quite a bath of blood on Asian stock markets today with mainland Chinese markets bouncing back, but they were the only brightness in a sea of red as the dreaded Monday morning gap was filled from Friday nights selloff. A most welcome correction, but one that has many spooked because of the rising Treasury yields, now starting to approach the 3% level, with Australian bonds not that far behind.
In mainland China the Shanghai Composite has finally bounced off terminal support at 3400, currently up 0.6% at 3483 points. The Hang Seng Index however is in risk-off mode, down 1.3% to 32169 points, gapping sharply before recovering as it clings on to tentative support at the 32000 point level:
S&P futures are down having gapped in early trade but look like putting on a mild recovery, but I don’t expect much upside tonight:
Japanese stocks continue to brush aside the positive tailwind that is the weaker Yen and get on the sell train with the Nikkei 225 off more than 2% to 22760 points. The USDJPY pair got ahead of itself during the NFP print on Friday night and has retreated slightly to be below the 110 handle going into tonights services ISM print with strong support at the 109.60 level to watch:
The ASX200 jumped on the sell train as well, but only feel 1.5% to close at 6026 points, clinging onto psychological support at the 6000 point level. The Aussie dollar gapped lower but then recovered strongly in the morning session before stabilising here at the 79.40 level against USD. This is just a swing reaction to the big selloff, so I’m expecting another possible downturn tonight:
The economic calendar starts the week with UK services PMI prints for January, then switches up a gear into non-manufacturing/services ISM print in the US for January, plus a speech by Super Mario to the ECB Parliament.