Most Asian stock markets are off today in response to the “too-dovish” Fed mood overnight, although Japanese bourses barely managed a scratch session due to a much weaker Yen. Weak data from China and in particular the canary-in-the-gold-mine decline in Korean exports is hampering risk sentiment as well. Perhaps the insurance cut is at the right time after all?
The Shanghai Composite has fallen nearly 0.9% to be at 2908 points while the Hang Seng Index continues to buckle, now at a new monthly low to finish down 0.7% at 27560 points. This puts it well below previous ATR daily support and ready to move to its May extreme lows:
Japanese share markets were able to rise slightly while under pressure with the Nikkei 225 closing 0.1% higher to 21541 points. The USDJPY pair turned its tentative breakout on the back of the Fed cut overnight into a proper move higher into the low 109’s where its stabilised this afternoon and ready to tackle the March highs nearer 112:
The ASX200 continues its retracement after reaching a record high recently, down 0.4% to close at 6788 points, mainly due to iron ore and commodity players. The Australian dollar is on the mat struggling to get up after being whalloped against last night, well below the 69 handle and back to its 68.50 recent low:
S&P and Eurostoxx futures are steady going into the European session with the S&P500 four hourly chart displaying the classic dead cat bounce pattern post a large selloff so I’m expecting further downside here tonight back below 2970 points as the Fed takes away the punchbowl:
The economic calendar says its the turn of the BOE for its interest rate meeting which will interesting to see if they can/want to arrest the decline in Pound Sterling while the US ISM Manufacturing print will be very closely watched following last nights “insurance” cut from the Fed.