A red day for Asian stocks as risk sentiment evaporates following the overnight machinations in US government and Chinese heavyhandedness regarding the Evergrande and energy disasters. The USD remains very firm against most of the risk currencies as the Australian dollar remains under stress following the recent postponement of European free trade talks while local shares took a big hit. Meanwhile Bitcoin is almost back to its start of week position at the $44K level as gold tries to maintain a level above $1750USD per ounce after last night’s solid swing back:
Chinese markets are closed for a holiday while Japanese markets are not just pulling back but outright selling off in fear as the Nikkei 225 closes over 2% lower to 28818 points as Yen buying accelerates. The USDJPY pair is coming back to the 111 handle and while it hasn’t yet made a new intraweek low, ATR support is tentative here:
Australian stocks could not escape the carnage, with the ASX200 taking back all of its recent gains and then some, down over 2% to finish at 7168 points, embiggned for a wider selloff next week. The Australian dollar is really struggling again after previously lifting through the 72 handle, but resistance is clearly too strong overhead here after recently putting in a new weekly low:
Eurostoxx and S&P futures are very flat indeed going into the London open, with the daily chart of the S&P500 showing that large head and shoulders pattern coming to fruition as it approaches the July lows at the 4250 level, ready for a full capitulation:
The economic calendar finishes the week with yet another jam packed schedule with German retail sales, Euro-wide core inflation, then US core price index and final ISM manufacturing PMI prints for September.