Macro Morning (Trading Week)

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By Chris Becker 

You could call activity on equity markets last week as a return to stability, but that’s a stretch, as confidence remains cratered. A variety of macro and country specific risks continue to rise, from the Saudi’s malelovence impact on oil prices, Chinese share prices now in their fourth year of a bear market and locally, a government that has lost its majority. The focal point for all these risks remain US interest rates, reflected in rising bond yields as the risk edifice tries to absorb a modicum of “normalizing” of interest rates since the GFC nadir ten years ago.

Looking at Chinese stocks first, last week saw the Shanghai Composite continue its malaise, breaking and finishing below terminal support at 2600 point level, after a previous weak bounce. While there has been some buying support in the midst of all this selling – evidenced by the long tail below on the weekly candle – it’s nothing to get excited about and will require a catalyst to reverse these falls:

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