It’s not been the bounceback that we expected here in Asia with mixed results on stock markets across the region. The yuan dropped to a 10 year low, almost hitting the 7 handle versus the USD, while the Aussie dollar dropped to a two year low as the USD flexes its muscles.
The Shanghai Composite is vascillating around, currently 0.5% lower going into the close, currently at 2596 points, just below key support at the 2600 level. The Hang Seng Index is off by 1% or so to 24728 points, still well below the previous support level at 26000 points and making another new daily low as it fails to get back above what looked like an anchored bottom area at 25000 points:
S&P and Eurostoxx futures are down after the fairly good bounceback overnight with the four hourly S&P 500 chart showing a return to the previous low hit during the week:
Japanese stocks were mixed with the Nikkei 225 closing 0.7% lower at 21118 points, finishing off a really bad week after making a six monthly low. The USDJPY pair is coming back slightly as Yen buyers step in, taking the pair to just above the 112 handle. The four hourly chart is starting to resemble a symmetrical triangle here with the point of control at the 112 level, but with a short term downward bias:
The ASX200 looks set to finish the week on a positive note – just! It closed only 1 point higher to 5665 points capping off a very bad week – for long only holders. The Aussie dollar has broken down below what looked like some modicum of support at the 70.50 level, almost hitting the 70 handle as the risk takers go back to USD:
The economic calendar ends the week with two major events to watch out for, first the 3Q GDP print from the US then an important speech by Mario Draghi in Brussels.