It’s all about the bounce today with either the start of the recovery or a dead cat bounce underway as all equity markets save the local ASX200 have seen positive results for the first time in a week. Other risk proxies like USDJPY and gold have pushed higher, with Chinese stocks leading the magnitudes despite a slumping manufacturing PMI release over the weekend.
The Shanghai Composite is soaring ahead, up nearly 3% after the lunch break to be at 2963 points while the Hang Seng Index is up by 0.8% to 26349 points, bouncing off January’s low:
Japanese share markets have seen a neat bounce in line with a mild selloff in Yen with the Nikkei 225 gaining just over 1% to 21359 points. The USDJPY pair has fought back as it briefly hit below the 108 level from extreme oversold levels:
The ASX200 gapped down on the open and sold off sharply before a lunch led recovery – a few beers always helped with Dutch courage – saw the losses contained to less than 1%, with the bourse closing at 6391 points. The depressed Australian dollar staved off some selling as well, heading back above 65 cents vs USD but the four hourly chart remains in a very weak state indeed with lots of overhead resistance to beat:
Eurostoxx and S&P futures have also rebounded, with the four hourly chart of the S&P500 showing an attempt to get back to the previous psychologically important 3000 point level, which needs to happen fast as the nearest support level is still far away at the 2019 low at 2700 points:
The economic calendar starts the week in a relatively quiet mood, although there is the release of the ECB’s OECD outlook which will obviously contain the impact of the coronavirus and could upset markets further.