The bounce in equities has been shortlived with only the Australian market not dipping into the red this afternoon, with local employment data keeping the bears away for another day. A weaker Yuan fix plus reduced confidence has seen Chinese stocks selloff sharply while gold is holding on, other undollar assets are falling heading into the European session.
The Shanghai Composite slumped at the open and stayed there all day, down over 2% to 2507 points, key support at the 2600 level a distant memory as the bear market doubles down. The Hang Seng Index was off by 0.3% to 25380 points, still well below its previous support level at 26000 points with a new daily low an ominous sign that there is no real bottom here:
S&P and Eurostoxx futures are of by about 0.2% with the four hourly S&P 500 chart unable to break free above ATR resistance at the 2820 level, with internal signs of weakness:
Japanese stocks failed to continue their recovery despite a much weaker Yen with the Nikkei 225 falling 0.8% to close at 22658 points. The USDJPY pair continues to come back, but is finding stiff resistance at the 112.80 level as it tries to shake off what was a solid downtrend:
The ASX200 was one the best performer but it’s a moot point, finishing flat at 5942 points, unable to get back on track as it remains short of psychological resistance at 6000 points. The Aussie dollar didn’t move much on the unemployment print, remaining steady just above the 71 handle, still dicing with short term resistance at 71.30 or so on the four hourly chart:
The economic calendar will look closely at tonight’s US initial jobless claims with a few Fed official speeches to watch out for as well.