Despite the positive finish on Wall Street on Friday night, markets here in Asia are continuing to selloff as tensions mount in the Middle East with Saudi stock markets tanking on the weekend (about the only thing they get right is allowing trading on weekends!) plus a fallout from German and Italian political troubles. Safe haven buying is preventing a bottom in equities, with all eyes on oil prices tonight on the Saudi threats – hollow in my opinion, but fun to ride nevertheless.
The Shanghai Composite was again all over the place but is struggling after the lunch break to be down 0.6% at 2591 points, still unable to get back above key support at the 2600 level. The Hang Seng Index is doing much worse, off by more than 1.2% to 25483 points, still well below its previous support level at 26000 points and looking quite depressed:
S&P futures are down 0.3% while Eurostoxx futures are off about 0.2% so there is unlikely to be a positive follow through in Atlantic markets tonight from Friday’s session either. The four hourly S&P 500 chart suggests a bearish descending triangle here with support critical at the 2750 level:
Japanese stocks have been unable to recover with Yen firming solidly throughout the session, with the Nikkei 225 down sharply, off by nearly 2% to close at 22271 points. The USDJPY pair is slowly inching lower, tracing just belwo the 112 handle with an inability to make any new session highs in a solid downtrend:
The ASX200 was off nearly 1% to close at 5837 points, led mainly by the banks as it continue its own little correction, not helped by the Aussie dollar as it remains slightly above the 71 handle, coming up against short term resistance at 71.30 or so on the four hourly:
The economic calendar starts the week with an important release, US retail sales for September, which will be very USD sensitive.