Asian risk markets start the week strongly with a postiive response to Friday night’s rally on Wall Street, where industrial stocks are set to meet their previous January high. The USD remains in a small retreat against most of the majors with the Australian dollar still holding on after another knife fight in Canberra.
The Shanghai Composite has continued its rebound, currently up 1.6% to 2774 points going into the close, building on last week’s breakout above previous weekly support at the 2700 point level. The Hang Seng Index is doing even better, as the PBOC firms the Yuan again, up more than 2% to 28250 points, getting well above previous terminal support at 28000 points as it breaks out above the overhead downtrend line:
S&P futures are building strongly alongisde the Eurostoxx, with the recent USD weakness helping US stocks revisit their former highs:
Japanese stocks are doing well even with a stronger Yen, with the Nikkei 225 closing 1% higher at 22817 points, continuing to build solid momentum on its daily chart. The USDJPY pair has come back down to the 111 handle after its flameout on Friday night, breaching the low moving average on the four hourly chart and looking set to revisit support at the 110.70 level:
The ASX200 was the laggard, but still put in a positive result, up nearly 0.3% to close at 6268 points. This still keeps it below previous resistance at the 6300 point level but overall the market looks firm. The Aussie dollar started well this morning but has stalled, sitting at the 73.20 level and unable to make further gains from Friday night, with resistance at 73.70 the zone to beat:
The economic calendar starts the week very slowly with the usual Treasury auctions tonight, with some mid-tier German data as well, but it will likely be political catalysts that move things along.