See the latest Australian dollar analysis here:
Stocks were sold off swiftly throughout Asia today in response to the slump on Wall Street overnight as the USD pulled back slightly from its surge against risk currencies. The real threat here remains the bond market with US Treasury yields climbing sharply on the expectation of a slew of interest rates from the Fed this year. Yen has appreciated on the safe haven trade with the Australian dollar finding a modicum of relief after its selloff, while gold is barely holding on here, hovering just below the $1820USD per ounce level, as buying support slowly evaporates:
Mainland Chinese shares took a small tumble with the Shanghai Composite down only 0.4% to 3556 points while the Hang Seng Index did the same, losing another 0.4% to close at 24014 points. Japanese markets however went for a dip on a bath of blood with the Nikkei 225 closing 2.8% lower at 27467 points as the USDJPY pair slumped back down to the 114 handle after failing to move high post yesterday’s BOJ meeting, as Yen safe haven buying appreciated:
Australian stocks also fell as expected, with the ASX200 down 1% to close well below the 7400 point level at 7332 points, as the Australian dollar regained some of its exposure in the wake of a surging USD, holding just below the 72 handle but yet to make a new weekly low:
Eurostoxx and Wall Street futures are falling fast going into the London open, with the S&P500 four hourly chart showing price returning to the December lows at the 4550 level (lower black horizontal line) as the potential builds to turn this dip into a proper correction:
The economic calendar continues with an inflation focus, first UK and then German prints for December, followed by US housing starts and the continuation of the earnings season.