Macro Morning

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By Chris Becker

The fluff and broth surrounding Trump’s trade war is simmering down, with news of moderation around China’s tariffs and other “deals” from the US Treasury sending stocks soaring on Wall Street overnight. Coupled with higher tension in the Middle East sending oil prices much higher, plus a new one month low on USD, risk assets and major currency pairs all led a recovery overnight. Will it stick here in Asia today?

Recapping stocks in Asia yesterday where the Shanghai Composite closed 0.6% or 20 points lower to 3133 points, after taking out key support at the 3200 level in a huge selloff on Friday, traders continued to weigh up the impact of the new tariffs. Overhead resistance at 3300 remains solid as a rock here, but support at 3100 seems to be firm as well. There maybe a rally today given the overnight moves in US stocks, but its a low risk reward play here:

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