Risk markets are on a knife edge with Asian stocks falling sharply across the region following the latest Federal Reserve meeting, with Chair Powell indicating some serious interest rate rises are on the cards. While Wall Street put in a scratch result, futures are falling going into the London open alongside steep falls here locally as the USD remains very strong against most of the major currency pairs, especially gold. The shiny metal fell out of bed last night and has continued to fall today, currently at the $1815USD per ounce level, coming up to its major uptrend line/obvious support at the $1800 level:
Mainland Chinese shares continued to fall back with the Shanghai Composite down over 1%, currently at 3412 points going into the close, while the Hang Seng Index is even steeper, falling more than 2% to be at 23649 points. Japanese markets are taking the biggest hits, despite a weaker Yen with the Nikkei 225 closing more than 3% lower at 26147 points while the USDJPY pair is holding on to its overnight gains, almost matching the previous weekly high:
Australian stocks couldn’t escape the carnage with the ASX200 closing 1.8% lower to definitively stay below the 7000 point level, finishing at 6838 points, while the Australian dollar is now dicing with the key 70 handle, having dropped to a new monthly low, as the USD proves too strong:
Eurostoxx and Wall Street futures are slowly melting down going into the London open, with the S&P500 four hourly chart showing a classic dead cat bounce ready to be completed as price heads to the September 2021 lows at the 4250 level:
The economic calendar is packed with German consumer confidence, US durable goods and initial jobless claims. Going to be a fun night!