A relatively quiet start to the week here in Asia with Japanese markets closed and news dominated by the latest Chinese trade figures which surprised on the downside, pushing Yen higher against USD, the Aussie and Kiwi. Further volatility is expected mainly on FX and bond markets tonight with continued pressure on Theresa May as the Brexit deal goes to a vote which is almost certain to fail.
The Shanghai Composite is down by nearly 0.5% or so going into the close, selling off from the start of the session amid the lower Yuan fix and the trade figures, currently at 2540 points. The Hang Seng Index is off much more, closing about 1.4% lower to 26288 points, unable to breach the weekly downtrend channel (black line) on the daily chart below. Friday’s session had set up a potential breakout but the trade news is knocking it back to the moving average band:
US and Eurostoxx futures are down slightly going into the London open with the four hourly S&P 500 futures chart showing the staunch resistance at the psychologically important 2600 point level as Wall Street goes into reporting season and we all await the outcome of Trump’s tremendous deal-making with the government shutdown:
Japanese stock markets were closed for yet another holiday. Light trading in the USDJPY pair saw it sink again following the release of the Chinese trade results, still clinging to just above the 108 handle but looking like taking out the tentative support line from the previous two week lows:
The ASX200 had a scratch session amid the mixed messages, helped by a lower Aussie dollar, but not the economic news, finishing only a couple points down to 5773 points. The Aussie dollar didn’t gap down at least but fell back below the 72 handle on the Chinese trade figures and is starting to wane here despite the USD weakness:
The economic calendar starts the week slowly with no major releases, but all eyes are on the newswires regarding Brexit developments anyway.