By Chris Becker
Can you smell that? Fear has returned to risk markets – and last night saw a wild ride down on US stocks, with the Dow nearly losing 5% in the session. The selloff started in the European session, all on the back of positive news from the BOE which indicated the UK economy was growing faster than expected post-Brexit and that it would normalise rates sooner rather than later. This shows how clear risk markets are tied to the punch bowl and not economic reality.
Recapping action in Asia yesterday where in mainland China the Shanghai Composite continued to brush aside support levels, falling another 1.5% to 3262 points, taking out all of its December advance. The daily chart suggested that 3400 was strong support, and then 3300, but this is wiping out all buying support underneath, so I guess 3200 points is next? Today’s CPI print will be very interesting to say the least:
