The Asian session was generally upbeat today followed the positive lead from European and Wall Street overnight. The bottom fell out of the Aussie dollar as Governor Lowe indicated a “more evenly balanced” approach to interest rates – read: they’re gunna cut! Due to the Chinese New Year holiday only a few share markets are open, with the Shanghai Composite and Hang Seng Index closed until Friday.
US and Eurostoxx futures are lifting slightly with the four hourly S&P 500 futures chart showing a readiness to launch higher from the psychologically important 2700 point level, where traders are looking for a weekly close above the weekly downtrend line (upper black line):
Japanese stock markets are marginal again today with the Yen strengthening late in the session, with the Nikkei 225 closing about 0.1% higher at 20874 points. The USDJPY pair has pulled back from its Friday night bounce and has flipped back well below the 110 handle and the previous weekly highs. I”m watching that low moving average on the four hourly chart very closely tonight:
The ASX200 was helped along by a lower Aussie dollar with the market closing nearly 0.4% to build above the 6000 point barrier and closing at 60246 points. The Australian dollar has flopped right through the 72 handle after rejecting resistance at 72.70 overnight with more losses expected on the City open tonight in reaction to Governor Lowe’s comments. I’m expecting the January low below 71 cents to be the target here:
The economic calendar continues tonight with a few minor releases, namely German factory orders and the latest DOE oil inventory report.