An ugly finish to the week here in Asia as share markets tumble in the wake of Trump’s Mexican tariffs and the growing discord in North Korea and the Chinese trade talks. It’s all about safe haven buying including Yen, gold, Bitcoin and Bunds.
The Shanghai Composite has closed below the critical 2900 point level in the wake of its steady PMI print, while the Hang Seng Index has fallen over 0.8% lower to 26894 points, unable to arrest the recent decline to make a new daily, weekly and monthly low. The daily chart had showed a deceleration pattern with a target at the 27000 point level but poor sentiment is weighing too much on this risky proxy market:
S&P and Eurostoxx futures are slumping, down at least 1% going into the European session with the four hourly chart of the S&P500 chart suggesting another new daily low to finish May tonight, still well below key terminal support level at 2800 points which continues to signal a major correction as the completion of a very bearish head and shoulders pattern on the longer term charts:
Japanese share markets are off the most in the wake of the Kuroda comments about US favouritism (all that pomp, big talk and hiding ship’s names for nothing Trump – hah!) with the Nikkei 225 slumping 1.6% lower to finish the week and month at 20600 points. It hasn’t helped that the bottom has fallen out of the USJDPY pair with a big slump below the 109 handle, as overhead resistance and risk-off avoidance is sending Mrs Watanabe to the domestic safe haven currency:
Australian stocks are in a bubble right now, avoiding the worst of the falls to actually finish in the green with the ASX200 up four points to finish just below previous support at 6400 points. The Australian dollar has blipped higher despite the poor sentiment, almos thitting the high moving average to get to the 69.20 level but overhead resistance is far too strong:
The economic calendar finishes the week with two big ones – German inflation and US core PCE (personal consumption expenditure). Have a good weekend!