By Chris Becker
Risk markets have undergone a massive shift in sentiment on Friday night due to two major factors: the solid US jobs number followed by Fed Chairman Powell’s comments which were both reassuring and extremely supportive. The volatility swung the other way with US markets closing at least 3% higher across the major indicies, pulling along all futures so that today’s Monday morning gap in Asia will be a big event. Further to the Chinese market rally on Friday, the PBOC has stepped in with a cut in reserve requirements and the usual soothing comments that should see this rally continue this week.
Recapping Asia’s session Friday first where the Hang Seng Index gapped lower on the open again, but this time rallied throughout the session, closing about 1.5% higher to 25445 points. This is just under previous support at 25600 but futures are suggesting a lot of upside potential here, having not made a new weekly low:
