Macro Afternoon

A boost to optimism across risk markets today, following potential upside to the continued US-China trade talks, but this seems like a repeat of the last time! A bit of market manipulation from both sides is at hand with the PBOC again strengthening the Yuan, with gold falling slightly as the USD strengthens nearly across the board.

The Shanghai Composite swiftly lept higher and is holding on to those gains going into the close, up nearly 1% higher at 2988 points while the Hang Seng Index has retraced slightly given the huge gains yesterday, down about 0.8% to 26309 points. This is to be expected after a huge surge so we should see further consolidation going into the weekend:

Japanese share markets are the strongest given the risk on mood and as Yen sold off slightly during the session with the Nikkei 225 closing 2% higher at 21085 points making a new monthly high. The USDJPY pair is trying to get back above long held resistance at the 106.60 level but again is finding it tough, but momentum is still behind it:

The ASX200 surged in the damn the torpedos/recession move, up nearly 1% to close at 6613 points as the Australian dollar continued its advanced. The 68 handle was breached along with the long held resistance level (solid horizontal black line) nearly making a new monthly high. Could be a lot of selling here at this level coming soon, so I’m cautious of filling this in:

S&P and Eurostoxx futures are advancing strongly, up nearly 1% across the board on the good mood with the S&P500 four hourly chart showing price breaking through the 2940 point resistance level and ready to party on as this new and improved wave of optimism carries through:

The economic calendar is US centric tonight with initial jobless claims and the very important ISM services PMI for August.

Comments

  1. Little short squeeze on the AUD when it broke through 0.68? Stronger yuan can’t have helped either.
    Give it a week…!

      • Could do, given how much sense it makes!

        Nah. It’s up on the pause in Trump tweets, Brexit and Hong Kong – none of which will last long.

    • There’s a lot of over-bought /over-sold situations out there. Time to take a breather and re-load. AUD was due a bounce, gold is due a decent correction, bonds look stretched in general. Stocks are frankly egregiously priced.

      Anyway, it will all sort itself out

  2. The Traveling Wilbur

    I have one hope for the construction quality crises gripping Australian property development. That someone will realise that Australia’s only hope is to…

    release the crack-in.

    • That works on many levels.
      The biggest crack I’ve seen lately was on a Jetstar flight.
      That man had no interest in either pulling the pants up or wearing a shirt that hung down far.
      You can bet he kicked off the thongs as soon as he got to his seat.
      Bourbon and cokes at 10am.
      If he had had a mullet it would have been perfection.

    • You have to wonder where the value is in employing all thse so called economic experts in the RBA. Like you say, economy growing – raise rates, economy slowing – lower teh rates! Why the fvck does Lowe get paid a million a year? You could train a monkey to do it!