See the latest Australian dollar analysis here:
A strong start to the week here in Asia in reaction first to Friday’s US unemployment print but then Chinese stimulatory support and the lower volatility on currency markets. Risk proxies like the Aussie and Kiwi are up despite the fall in the USDJPY pair, while Chinese equity markets advanced but not as strong as others, it’s green across the board.
The Shanghai Composite is up around 0.4% or so at 2524 points as confidence continues to filter back , climbing above previous support at 2500 points. The Hang Seng Index is up similarly, having made most of its gains on Friday, closing around 0.35% higher to 25828 points. This is just under previous support at 25600 but there is upside potential here:
US and Eurostoxx futures are up going into the London open, with the lack of bad news good news for now. The four hourly S&P 500 futures chart shows price ready to push higher after the huge gains on Friday night (3-4% plus across the main indiies), taking out significant resistance at the 2500 level and making a two week high:
Japanese stocks came back strongly with a very solid session, the Nikkei 225 lifting 2.5% to regain most of its previous losses to finish at 20095 points. The USDJPY failed to rally however, finding significant resistance at the 108.50 level, falling 40 pips and looking weak here unexpectedly:
The ASX200 gapped nearly 1% higher and stayed there throughout the day, closing 1.1% higher to 5683 points. The Aussie dollar also rallied making good on its Friday night gains, lifting to the 71.30 level against the USD, continuing its strong bounce from the recent flash crash:
The economic calendar starts the week slowly following Friday night’s NFP, so we get German retail sales final numbers and a few other releases before the US ISM non-manufacturing (services) print for December.