Risk sentiment wobbled on some disappointing PMI results on Friday night with Wall Street pulling back from its nascent rally while European stocks finished dead flat. The two year lows in manufacturing and the contraction in services weighed particularly on currency markets with the USD outperformed by other safe havens like Yen, with Euro still firm above the 1.02 handle while the Australian dollar nearly pushed through the 69 cent level. Bond markets saw more tightening of yields with 10 year Treasuries retracing down to the 2.75% level after being above 3% almost all week, as US interest rate futures also pulling back slightly with a 75bps rate rise at the next Fed meeting. Commodity prices were still volatile with Brent and WTI crude losing more than 3% while copper gained nearly 2% and gold continued its fightback, finishing the week above the $1720USD per ounce level.
Looking at share markets in Asia from Friday’s session, where mainland Chinese share markets slid lower into the close but managed to escape with a scratch session as the Shanghai Composite finished at 3269 points while the Hang Seng Index was also looking at a scratch session, but lifted 0.2% to close the week at 20609 points. Sentiment continues to wane on the daily chart with considerable overhead resistance and daily momentum readings remaining oversold as the previous swing play reverts back to the downtrend:
Japanese stock markets were able to continue their surge, with the Nikkei 225 up 0.4% to 27914 points. The daily chart is suggesting this breakout to continue despite the firming of Yen, with resistance starting to build slightly at the previous highs at the 28000 point area as daily momentum remains nicely overbought. Price has made a new weekly high, which should support further upside but the mixed lead from Wall Street will not help in the short term:
