It’s been a tough day for the long only crowd in Asian shares across the region, with falls of a similar magnitude to those of Wall Street overnight. Volatility in FX markets has been sanguine however, with the Aussie bouncing slightly while the Kiwi deflates in the wake of the equity selloff, although this lack of volatility may change with the ECB meeting tonight. Yen safe haven buying has kept the USDJPY pair down while gold lifted for the third day in a row to a new monthly high.
The Shanghai Composite is actually one of the better performers, only down 1.6% going into the close, currently at 2562 points, still well below key support at the 2600 level. The Hang Seng Index is off by 1.9% to 24771 points, crashing well below the previous support level at 26000 points as it gaps below what looked like an anchored bottom area at 25000 points:
S&P and Eurostoxx futures are off in response to the Asian selloff with the four hourly S&P 500 chart showing a potential deceleration in the selloff, but not letting up as it rejected trailing ATR resistance at the 2758 level last night:
Japanese stocks were the hardest hit with the Nikkei 225 closing 3.6% lower at 21297 points, completely obliterating the previous meagre comeback rally, now making a six monthly low. The USDJPY pair is somewhat behind this move with a retracement back to but not below the 112 handle as it grapples with its own destiny, still holding on to the medium term trendline, but momentum remains negative:
The ASX200 is also getting hit hard, selling off in line with Japanese stocks – not helped by the AMP slaughter, down 25% (couldn’t of happened to nicer vampire squids!) – closing nearly 3% lower to 5669 points. This wipes out all of calendar 2018’s upside…. The Aussie dollar is bouncing along here, currently at 70.70 as it finds a modicum of support at the 70.50 level, but this is looking weak overall:
The economic calendar ramps up again tonight with the clsoely watch ECB monthly meeting and press conference followed by the US durable goods order for September.