By Chris Becker
Friday night saw the release of US jobs data, which had a disappointing headline number but overall was positive, giving stocks a boost and setting the signal for a September rate rise by the Fed. The more interesting prints were the ISM services PMI which fell to a near yearly low as did the trade balance, indications that Trump’s inane trade war is starting to bite. In currencies, there’s a consolidation of strength in USD even though the Aussie dollar had a small bounce post NFP, its likely to come under pressure coming into tomorrow’s RBA interest rate meeting.
Looking at Chinese stocks first, the Shanghai Composite had a sharp reversal on the back of the uptick in the trade war with Trump, even as the Yuan reached new lows. The weekly chart is illustrative, showing a bearish engulfing candle wiping out the recent swing higher and taking it back to previous low point near 2700 points. Momentum is oversold but overall acting properly like a bear market, so we’re likely to see new lows in the week ahead:
