See the latest Australian dollar analysis here:
Wall Street’s slump on Friday has survived through the weekend to start the week here in Asia with a similar selloff, with most stock markets down 1-2% across the region. The so-called 2nd wave of COVID-19 is weighing on risk assets again, with currencies moving slightly higher against USD while gold held on to its new monthly high. Going into the end of month/quarter/financial year window dressing, we could see an actual second wave of selling.
In mainland China, the Shanghai Composite reopened after a long weekend, down nearly 1% to 2955 points while in occupied Hong Kong the Hang Seng Index gapped lower with another selloff below the previous daily lows, now 1.3% lower at 24217 points:
Japanese stocks fell back the hardest with the Nikkei 225 retreating well over 2%, finishing at 21995 points and making a new two weekly low. Meanwhile the USDJPY pair retraced slightly at the gap open, falling back to just above the 107 handle as momentum on the four hourly charts inverts again and price paints a double bearish top pattern:
The ASX200 had a solid selloff with local concerns about the Victorian outbreak weighing on the market, off by more than 1.5% to 5815 points and looking vert weak on the daily charts. The Aussie dollar found some buying support with a small bounce off nominal ATR trailing support to be at the 68.80 level going into the City open, but momentum remains negative on the four hourly chart:
Eurostoxx futures are down 0.8% or so to catch up the Wall Street rout on Friday while S&P futures are off by 0.3% so we’re likely to see more downside to start the trading week on a sour note: