Quite a mixed start to the week here in Asia with stock markets changing losses for gains throughout the day in reaction to weekend news, both political and macro related. Its not just the Trump Administration under the spotlight, but PM Abe’s cabinet in Japan, where their prevalence for a cheaper Yen is not winning widespread support. This week sees the first FOMC meeting under the new Fed Chair Jerome Powell, and its making money and currency markets nervous. Watch that space!
The Shanghai Composite fell at the open but has recovered after the lunchbreak to a scratch session so far, up a handful of points at 3271, still well shy of the key 3300 point level. The Hang Seng Index is in a similar position, barely up to close 0.1% higher at 31535 points, with the daily price gravitating around the high moving average band, but still unable to breach rolling ATR resistance above at the 32000 point level:
S&P futures are slowly pulling back, but given this is Monday morning lack of trade,not a big pointer yet to tonight’s performance, where the market should open around the 2750 point level:
Japanese stocks were the ones to suffer the most in the region as Yen strengthened on the gap open and held on throughout the session, with the Nikkei 225 closing 1.1% lower to 21458 points, now at the lower edge of its own moving average band and still range bound. The USDJPY pair fell on the stupid weekend gap and remains below the 106 handle again, with the longer term charts pointing to a test of support at the 105.40 level:
The ASX200 had a wild start before a mild selloff was filled in the afternoon, closing 0.2% or nearly 10 points higher to 5959, gaining traction as the Aussie dollar fell. The Pacific Peso plummeted again accelerating the falls from Friday night to be just below the 77 cent level against the USD, looking mightily oversold here:
And I’d be a bit worried if you’re long Bitcoin, the daily chart is setting up for another bearish head and shoulders pattern here as part of a multi week/month long bearish pattern. Watch out below $7000:
The economic calendar starts the week quietly with the usual Treasury auctions tonight…and the return of the Twit-in-Chief from the golf course.