Macro Afternoon

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A red day on Asian stock markets but its not Santa coming with a rally to end the year out as fear over property debt contagion in China combined with a surprise cut in Chinese interest rates is spilling over into other risk markets. The Australia dollar and other risk currencies are retracing sharply, with Wall Street futures down and oil prices falling in response to lockdowns in Europe. Meanwhile Bitcoin hovers just above the $47K level not making headway, as gold struggles to hold on just above the $1800USD per ounce level, having not been there since the end of November:

Mainland Chinese shares are putting in a poor session to start the week, with the Shanghai Composite down nearly 1% to 3601 points while the Hang Seng Index is slumping again, down 1.4% to 22848 points as Japanese markets also sharply pullback due to monetary easing comments from the BOJ, with the Nikkei 225 down over 2% to 27947 points. Meanwhile the USDJPY pair is moving slightly lower, heading below the mid 113 level and remaining below short term support on safe haven Yen buying:

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Australian stocks were the relative outperformers, with the ASX200 closing only 0.3% lower but looking very weak here too, closing at 7284 points while the Australian dollar has continued its late Friday downtrend, pulling back and reversing almost all of last week’s gains to be barely above the 71 level going into the London open:

Eurostoxx futures and S&P futures are sharply down to the negative risk sentiment with the S&P500 four hourly chart showing price breaking below the recent lows at the 4600 point level and looking to return to the start of month position at above the 4500 points level:

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The economic calendar starts the week without much going on, namely some Treasury auctions in the ‘States but that’s about it.