Asian stocks have moved steadfastly into sell mode because of a lack of confidence on Wall Street overnight as economic fears surrounding the Chinese coronavirus continue to spread. A run on safe havens like Yen and gold while a big selloff in offshore Yuan is pushing stock markets into the red as yields drop on sovereign bonds. The risk complex may yet need some help from the Fed.
The Hang Seng Index continued its big selloff, falling nearly 3% today, and losing over 5% since its return from the Lunar New Year holiday. The market finished at 26396 points, bringing it back to the start of December level, wiping out all of the Xmas rally:
Japanese share markets fell sharply as Yen buying was the order of the day with the Nikkei 225 closing 1.7% lower at 22977 points, taking it back to its October lows and sitting on key monthly support. The USDJPY pair broke down out of its tight trading range, pushed below the 109 handle going into the City open and ready to retrace to its start of week level:
The ASX200 was the relative best in the region, falling only 0.3% to remain above 7000 points 7008. The Australian dollar helped here by deflating into the low 67’s against USD, still in a dominant downtrend going into the RBA meeting:
Both S&P and Eurostoxx futures are falling back sharply, with the dead cat bounce (or is that dead bat?) now fully in play. The four hourly chart of the S&P500 shows this quite clearly, as price heads back to the Monday lows:
The economic calendar has a slew of reports to get through tonight. Hold your breath – German unemployment and CPI, the BOE meeting and press conference, the final 4Q US GDP print and then initial jobless claims. Plus that pesky trial that isn’t a trial in the US Senate.