Macro Afternoon

Advertisement

Not a good start to the New Year here in Asia today, with stocks down across the region, and the Australian dollar falling as a proxy as an unexpected slate of data from China, coupled with unease over the US trade talks – let alone the stupid Trump (but I repeat myself) shutdown – adding to the volatility.

The Shanghai Composite is down over 1.2% going into the close, currently at 2462 points as the selloff gains momentum. The Hang Seng Index gapped 2% lower on the open and has closed 2.7% lower to 25153 points. This keeps it well under previous support at 25600 and creates a solid downtrend line with a retest to the previous lows at 24500 likely:

Advertisement

US and Eurostoxx futures are down going into the London open, with no evidence of buyers around as the year rolls on. The four hourly S&P 500 futures chart shows a flipping of momentum and the inability to hold onto the 2500 level:

Japanese stocks had the day off thankfully due to an extended NY holiday as the USDJPY pair slumped after cracking the 110 handle over Xmas, its now in the low 109’s ready to accelerate. This has been repeated on the crosses – AUD especially – showing a lot of safe haven buying:

Advertisement

The ASX200 started off well enough, relatively speaking, off by only 0.5% to start the day before a lunch time recovery was nixed by the Hang Seng open, selling off throughout the afternoon to close 1.6% lower to 5557 points. The Aussie dollar diced with its own terminal levels at the 70 handle, almost breaking before a late recovery saw it settle at the 70.20 to 70.30 zone going into the London open:

Advertisement

The economic calendar is relatively quiet tonight with some final PMI prints in Europe but not much else.