Stocks in Asia reactively negatively to the sudden resignation of Trump’s top economic adviser in a sign that the Twit-in-Chief’s trade war will not go away, even though almost every serious economic commentator and player has said its a stupid idea. Are we surprised? Safe havens like Yen and US Treasuries were bid higher although gold was basically unchanged as currency markets position for Friday night’s NFP print.
The Shanghai Composite slumped after the long lunch break, closing 0.6% lower to close at 3267 points, still clearly unable to beat resistance above at the 3300 point level. The Hang Seng Index is off about twice that, down 1.2% to take back more than half of yesterday’s gain, closing at 30142 points. This takes it close to key support at 30000 as momentum remains right on the bottom reading of the daily chart, indicating this market is not out of danger yet:
S&P futures have dropped significantly on the Cohn news, right down to the tentative daily uptrend line:
Japanese stocks fell down on the negative mood, not helped by a stronger Yen, with the Nikkei 225 closing 0.77% lower to 21252 points. The USDJPY pair has slumped below the 106 handle, rejecting overhead trailing ATR resistance at the 106.50 level and getting back to its pre-breakout point again:
The ASX200 retraced almost all of its prior gains, closing 1% or 60 points lower to just over 5900 points in a fairly poor reaction to the GDP print. The Aussie dollar was slammed on the Cohn news before recovering somewhat on the GDP print to be just above the 78 handle going into the City session:
The economic calendar is relatively quiet tonight although the Canadian central bank is meeting and theres the January trade balance in the US to view through the quagmire that is the new trade war.