Macro Afternoon

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Another relatively solid day across stock markets here in Asia, save for Japan which had a much needed but quite shallow pause as Yen buying continued. The PBOC cut the Yuan again today after a recent failure to beat its 2019 high while gold remains unsupported below the $1700USD per ounce level.

In mainland China, the Shanghai Composite continued its solid start to the week with a solid session, finishing 0.5% higher to 2955 points, while the Hang Seng Index rejoined the risk frenzy, lifting 1.5% to 25219 points. Price is now leaping away from the previous sideways highs from April as this breakout gains solid momentum:

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Japanese share markets however were the laggards due to a much higher Yen, with the Nikkei 225 losing 0.4% to 23091 points, pausing its extremely overbought uptrend. The USDJPY pair is falling again after last night’s rout, flopping below the 108 handle for the first time since its breakout at the start of the month but looking to stabilise here going into the European session:

The standout of the region was of course Australian stocks, coming back from a long weekend and full of piss and vinegar, the ASX200 zoomed over 2% higher, now only 4% short of its 12 month high to 6145 points. The Aussie dollar fell back slightly alongside other majors as momentum wanes as the start of the week bid drops off, remaining below the 70 cent level:

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Eurostoxx and S&P futures are relatively stable going into tonight’s session as the economic calendar starts to build with some more releases before tomorrows FOMC meeting. The S&P500 is displaying a marginal rising bearish wedge pattern on the daily chart, but I don’t think anything can hold this edifice back:

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