Asian stocks sold off swiftly in response to big moves lower on Wall Street in reaction to Friday’s speech by Fed Chair Powell that also sent currency markets aflutter. The USD continues to strengthen against all the majors with Euro pushed well below parity and the Australian dollar on the ropes. Meanwhile oil prices are moving sideways with Brent just below the $100USD per barrel level while gold is falling quickly after its Friday night slump, now below the $1730USD per ounce level for a new weekly low:
Mainland Chinese share markets are basically flat with the Shanghai Composite up slightly at 3238 points while the Hang Seng Index was the best market in the region, only down 0.5% as it retreats below the 20,000 point level again. Japanese stock markets lost a lot of ground despite the lower Yen with the Nikkei 225 closing nearly 2.5% lower at 27913 points while the USDJPY pair remains overextended and almost pushing through the 139 level as USD zooms higher:
Australian stocks start the week with a bloody nose, as the ASX200 closed 2% lower to retrace below the 7000 level, finishing at 6962 points. The Australian dollar gapped lower on the weekend open and extend its losses against USD, now well below the 69 cent level for a new weekly low:
Eurostoxx and US futures are listless as we head into the London session, with the S&P500 four hourly futures chart showing price action taking a deep breath here right above the 4000 point level to see what’s going to happen next after Fed Powell’s uber inflation fighting comments on Friday night. The four hourly chart shows momentum extremely overextended, so we could see a swing higher here as a low probability move:
The economic calendar starts the trading week slowly with a few Treasury auctions.