The reaction to the US mid-term elections has been positive for risk markets in Asia, with stocks rising across the board while the USD floundered against the majors. The Kiwi has moved to a three month high while the Aussie is riding high on a wave of USD weakness.
The Shanghai Composite is up slightly going into the close, currently at 2646 points, still hanging on to key support at the 2600 level but unable to translate the recent swing gains into a proper recovery. The Hang Seng Index is doing better though, up 0.8% to 26361 points, finally starting to get some traction above the previous support level at 26000 points. The daily chart still has some upside potential but resistance at 26500 points is telling:
US and Eurostoxx futures have moderated a bit after last night’s surge with the four hourly S&P 500 futures chart showing a pause here as the oversold rally looks set to just consolidate here above the 2800 point level:
Japanese stocks have moved swiftly higher as expected and in line with US stocks overnight, the Nikkei 225 soaring nearly 2% higher to 22475 points. The USDJPY pair has finally quietened down after some fairly wild volatility in yesterday’s session, making some very minor gains as it remains well above the 113 handle. This has not yet breached yesterday’s high and buying exhaustion might be setting in here:
The ASX200 has continued its own little rally, albeit in the face of a stronger Aussie dollar to finish the day up 0.5% to 5928 points, finally getting back above previous support level at 5600. The Aussie dollar is still building here in the wake of a weaker USD and looks set to break the 73 handle, but I can see an ominous pattern forming here on the four hourly chart:
The economic calendar is relatively quiet with the German trade balance figures plus the usual US weekly initial jobless claims print.