See the latest Australian dollar analysis here:
Fear is starting to spread among the bubblish risk markets across Asia with the Chinese virus contagion sending stocks sharply lower ahead of the Lunar New Year holiday.
Chinese stocks are leading the selloffs, with the Shanghai Composite falling nearly 3% this afternoon, currently below the long held 3000 point barrier, while the Hang Seng Index has fallen almost equally as sharply, down nearly 2% at 27812 points. This puts it back below trailing support and ready to breakdown further as all confidence is wiped out:
Japanese share markets didn’t escape the carnage as safe haven buying in Yen accelerated. The Nikkei 225 closed nearly 1% to 23810 points, wiping out the previous gains and getting back below the key 24000 point resistance level. The USDJPY pair has broken through its critical daily and weekly support line and is now sharply below the 110 handle:
The ASX200 was the relative best, absorbing both the risk off mood and a higher Aussie dollar, losing only 0.6% to 7087 points. The Australian dollar lifted on the unemployment print with expectations of a rate cut pushed further than next month’s meeting, but there’s not much to get excited about here just yet:
Both S&P and Eurostoxx futures are pulling back, but not as much as expected, with the four hourly chart of the S&P500 showing a minor retracement back to the start of week position after the market failed to return to the ridiculous uptrend line above:
The economic calendar will be all about the ECB meeting later tonight, but also watch out for the DOE oil inventory report and the ongoing Kangaroo Trial in the Senate.