Macro Afternoon

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The reversal in mood has been short lived with a big selloff in Chinese stocks leading the region down, with only Australian shares not joining in. Although the Turkish Lira is firming, with a positive Wall Street lead overnight and European stocks looking positive going into the open, the negative mood couldn’t be forestalled here in Asia.

The Shanghai Composite closed 2% lower at 2723 points, completely wiping out any positive sentiment that has been forming previously, with previous support at 2800 confirming as staunch overhead resistance. The Hang Seng Index is off more than 1.7% to 27262 points, maintaining its fall below terminal support at 28000 points, with another new daily low turning this downtrend into a capitulation:

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S&P futures are up slightly with Eurostoxx futures also suggesting a minor blip higher on the open soon. USD strength continues to weigh on equities here with the four hourly chart suggesting a mild bearish rising wedge or pennant pattern:

Japanese stocks couldn’t be persuaded again, even with a weaker Yen with the Nikkei 225 closing 0.7% lower at 22207 points, but not making a new daily session low. The USDJPY pair bounceback continues but hit some mild resistance at the 111 handle and trailing ATR resistance, but still above the high moving average and the multi-week uptrend line:

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The ASX200 did exceedingly well, given the circumstances with earning and the lower Aussie dollar helping here, closing 0.4% higher at 6329 points to finally get above overhead resistance at 6300. The Aussie dollar continues its selloff, falling down towards the 72 handle vs USD with no intrasession support building:

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The economic calendar includes UK CPI and US retail sales tonight.