Asian stock markets have fallen sharply in response to the poor showing on Wall Street on Friday night as the US bond yield curve inversion and the growing likelihood of a European recession weigh heavily.
The Shanghai Composite is down nearly 0.9% going into the close to get back below 3100 points, currently at 3075 while the Hong Kong Hang Seng Index is off about 1.7% to 28619 points, unable heading straight below the previous breakout at 29000 points. It’s very close to cracking the last headfake at ca. 28000 points:
US and Eurostoxx futures are down going into tonight’s session with the four hourly chart of the S&P 500 showing how price topped out at around 2860 points last week and has now made a two week low. Momentum is extremely oversold with 2800 points the key level that price will gravitate around:
Japanese stock markets had the biggest hit, not helped by a much stronger Yen with the Nikkei 225 looking to close more than 3% lower at 20956 points. The USDJPY pair was poleaxed on Friday night and has recovered ever so slightly this morning, but is still below the 110 handle and looking extremely weak:
The ASX200 was the standout by losing the least, closing a little over 1% lower at 6126 points to remain well below staunch resistance at 6200 points. The Australian dollar gapped up a little on the open but is still below the 71 handle after its slow fall throughout the Friday session, but has yet to make a new weekly low:
The economic calendar starts the week slowly, but all eyes are on Europe for more data regarding the German slowdown with the IFO Business Survey to be closely watched on its release tonight, followed by a few central bank speeches and the inevitable slow motion train wreck that is Brexit.