No surprise that risk markets are wobbling on any sniff of trouble surrounding the US/China trade deal, as Trump throws the word “tariff” in the air again, which sent US stocks lower overnight, leaking into safe havens here in Asia.
Chinese stocks have reversed their recent bounceback, with the Shanghai Composite slumping nearly 0.8% lower to just above 2900 points while the Hang Seng Index has stumbled alongside, falling 0.6% to close just below 27000 points. Price is seemingly anchored at previous trailing ATR support and the resistance zone at 27000 points:
Japanese share markets were again unable to make headway due to a stronger Yen throughout the session as the Nikkei 225 closing 0.6% lower to 23148 points. The USDJPY pair continued its pullback today as negative momentum weighs on the USD, heading back to the mid 108s and almost back to last week’s intrasession low:
The ASX200 was the biggest loser, dragged down by the Westpac debacle – which fell more than 3% – as banks pulled the market 1.3% lower overall to close at 6722 points. The Aussie dollar stabilised somewhat, hovering again just above the 68 handle here going into the City open, as it still struggle to join other undollar assets as the USD weakens:
Both S&P and Eurostoxx futures are down between 0.2% and 0.6%, following the falls on Wall Street overnight. The S&P500 four hourly chart shows a short term pullback pattern on the bearish rising wedge breakdown, but this isn’t over until trailing ATR support is taken out at the 3100 points level.
The economic calendar has two major releases to watch out for tonight, namely the Canadian CPI and the release of the ECB financial stability review.