See the latest Australian dollar analysis here:
There’s a lot to digest for risk markets starting the trading week here in Asia with the return of Japanese traders to their desks adding to the volatility. Gold got an awesome bid in the morning, gapping some $20 higher to a near seven year high, as other risk proxies and safe havens reacted to the ongoing tensions between Iran and the US. Oil prices have also leaped to a yearly high, while stock markets are playing catchup with the weekend news.
The Shanghai Composite is slowly melting higher, currently up 0.3% to 3093 points, building well above the previously long held 3000 point resistance level, while the Hang Seng Index has slipped 0.5% to 28305 points, getting back to a more sustainable trendline after late last week’s exuberance:
Japanese share markets finally reopened for the new year but due to the downside move in the positively correlated USDJPY pair and the general volatile mood, both major bourses dropped nearly 2% with the Nikkei 225 losing 1.9% to 23195 points. The USDJPY pair gapped lower on the Monday open but has recovered to be just over the 108 handle going into the City open where its likely to hit overhead resistance at the former weekly support level at 108.40:
The ASX200 is the best in the region but only due to a scratch session, not moving at all as markets react to ScottfromMarketing’s “nah mate don’t care about surplus” givings this afternoon in response to the fire crisis. The local bourse closed at 6735 points. The Australian dollar remains stuck well below the 70 handle, matching the Friday night session lows and literally on the ropes here:
Both S&P and Eurostoxx futures are suggesting volatile sessions tonight with the former gapping much lower so expect some big movement on Wall Street tonight as the ramifications of a war with Iran start to sink in:
The economic calendar starts the week with only minor releases, namely final PMI prints for manufacturing and services across Europe and the US.