Macro Afternoon

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Well here comes the bounce, with risk assets suddenly coming back to life as happens in major retracements when there’s no one left to sell too. Oil is up nearly 10%, Yen has dropped 2% while stocks are up 2-3% across the region. Perfectly normal behaviour in the middle of a major correction – probably more to come!

The Shanghai Composite is up nearly 2% going into the close, currently hovering just below the 3000 point barrier while the Hang Seng Index is up about the same to be at 25519 points. This takes it above yesterday’s price action with a nice bounce on the daily chart – but nowhere near the weekly support at the 26000 point level:

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Japanese share markets are the slow performers even as Yen selling gathered pace with the Nikkei 225 only closing 1% higher to 19897 points, as nerves are still frayed. The USDJPY pair has bounced through 2 handles, having found some support at the 101-102 level and through trailing ATR resistance on the four hourly chart to below the 105 handle. But there’s a long way to go before calling this a bottom:

The monkey’s are out picking bottoms with the ASX200 the winner today, closing more than 3% higher after gapping down the same amount at the open, closing at 5939 points with 6000 not that far away! The Australian dollar is slowly melting which is helping, now back to its start of week low at the mid 65s:

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Eurostoxx and S&P futures are up 2% or more which is welcome news for both sides of the Atlantic with the latter’s four hourly chart showing support at the 2740 point level and a target for this bounce or bear market rally at the former highs from last week nearer 3100 points – can it do it?

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The economic calendar continues overnight with some already factored in 4Q Eurozone data, plus some more Treasury auctions.