See the latest Australian dollar analysis here:
Risk markets have reopened across Asia after the weekend gap and its been a mixed session for stock markets with Japanese bourses retreating while the local ASX200 rebounded after its stumbling finish on Friday night. The USD has firmed against the majors except Yen which has strengthened, hence the drop in Japanese domestic stocks.
The Shanghai Composite has closed down a couple of points to 3244, returning from a long weekend while the Hang Seng Index has returned to finally close above 30000 points, up 0.3% to 30035:
US and Eurostoxx futures have retreating slightly going into tonight’s session with the four hourly chart of the S&P 500 showing some hesitation to get past the previous highs above 2900 points:
Japanese stock market have started the week poorly with the Nikkei 225 closing 0.2% lower to 21671 points, unable to build above its recent highs. The USDJPY pair is to blame here with a sudden drop on the Monday morning gap run, falling below the low moving average on the four hourly chart and almost retracing to trailing ATR support at the the 111.30 level. It seem the 112 handle is a bridge too far here for the risk-on pair, which may be signalling a potential end to the bull run on other undollar assets:
No such bad news for local stocks with the ASX200 starting the week with a close above 6200 points, up 0.6% to 6022 points, almost taking back all of the losses on Friday. The Australian dollar is partially the reason as it fell below the 71 handle and rejects the previous weekly high, keeping well below the weekly downtrend line:
The economic calendar starts the week slowly as always post-NFP with a few secondary and tertiary releases including US Factory Orders for February and the German trade balance.