Wow what a day to be a FX trader! Bigly volatility on the Yen and crosses, with the Aussie dollar losing nearly 3 cents within a few minutes! Most currencies are nearly back to where they started, but this has had a big impact on equity markets with the catalyst being Apple’s late earnings revision over declining Chinese sales. There’s still no sign of a return to sanity with the Trump shutdown ongoing either. 2019 is super fun!
The Shanghai Composite spike at the open but has comeback significantly to be up only 0.2% or so at 2462 points as confidence evaporates. The Hang Seng Index gapped lower on the open again, but saw a lot of mid session volatiliy, closing about 0.2% lower to 25030 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:
US and Eurostoxx futures are down going into the London open, with still no evidence of buyers amid this strange session. The four hourly S&P 500 futures chart shows price clinging to the lower edge of the moving average channel with significant resistance at the 2500 level:
Japanese stocks had another day off thankfully due to an extended NY holiday. The USDJPY did an amazing selloff in the witching hour between the NY close and Tokyo open, slamming through six handle – 109 to 103 before recovering to just over 107! These types of events is what gives FX traders grey hair or no hair!
The ASX200 started off very well and kept onto the gains as a much lower Aussie helped revive the stagnant stock market, closing 1.4% higher to 5633 points. The Aussie dollar also met with carnage after breaking through trip markers at the 70 handle, it went as low as 66.50 – i.e 3.5 cents! – with a fightback unable to bring it back above that key level. This is one for the ages:
The economic calendar ramps up tonight with the US ISM manufacturing print for December, which will be very closely watched, alongside initial jobless claims and other private jobs data.