A poor start to the trading week here as the wishy-washy finish to the week on Friday spills over here in Asia. All stock markets have put in minor losses with currency markets flat against the USD. A falling Yuan was the main theme however, as the PBOC tries to forestall the growing trade war by dumping its sovereign currency against King Dollar, now almost at 7 to 1, almost back to the 2016 highs.
The Shanghai Composite gapped down at the open and remains beaten down going into the close, off 0.44% lt 2861 points, remaining below recent resistance at 2900 points and sending a signal that the bears remain in charge. The Hang Seng Index is losing even more ground, off by 0.8% to 28564, almost completely negating last week’s swing play move as it looks set to return to support at 28000 points proper:
S&P futures are down considerably with Eurostoxx also off going into what could be a volatile week for Atlantic markets, given the amount of central bank and NFP catalysts this week. Friday night’s solid Q2 GDP print was not enough to arrest the concern as the S&P500 four hourly chart deflates back to key support at 2800 points:
Japanese stocks are similarly struck by a lack of confidence as the Yen remains strong against USD. The Nikkei 225 closed nearly 0.75% lower to 22544 points, taking back all of its gains on Friday and remaining stuck between the low and high moving average band on the daily chart. The USDJPY pair is not making much headway either, very slowly deflating and still looking bearish as it barely holds above the 111 handle:
The ASX200 was the best in the region, closing down only 0.3% lower at 6278 points as dividends season comes squarely into focus. The Aussie dollar has been unable to translate the Friday night half-bounces into anything meanigniful and remains slightly below the 74 handle:
The data calendar starts the week with a couple of very important prints, first German CPI for July then pending home sales in the US.