The Fed basically pissed into the punchbowl on Friday with Chairman Powell explaining at Jackson Hole that rates need to stay higher for longer. This sent Wall Street down sharply, off by more than 3%, dragging European shares down with it. The USD lifted slightly as Euro again diced with parity but was eventually pushed back below while the Australian dollar fell back below the 69 cent level. Bond markets saw roundtripping and minor falls in yields with 10 year Treasuries pushed down to the 3% level while interest rate futures lifted again to a predicted 65bps rise at the next Fed meeting. Crude oil took back its recent gains with Brent crude retracing back to the $100USD per barrel level while gold fell alongside the other undollars to finish well below the $1740USD per ounce level.
Looking at share markets in Asia from Friday’s session, where Chinese share markets started strong and built some gains but lost ground towards the closing session, with the Shanghai Composite closing 0.3% lower at 3236 points while the Hang Seng Index still pushed higher, up 1% to get back above the 20,000 point level at 20172 points. The daily chart is still showing considerable overhead resistance and daily momentum readings have tried to get out of oversold mode as the moving average channel accelerated lower without any upside pressure. The previous move took out at least a week of losses as price bounces off the May lows but can this be sustained again given the volatility on Wall Street above the 20000 point level today:
Japanese stock markets also lifted with the Nikkei 225 closing nearly 0.6% higher but still below the key 29000 point level at 28641 points. The daily chart is showing a mild dip that has been nearly filled and was going to continue higher as momentum never went into negative mode but futures are suggesting a broad selloff on the open of the trading week. Trailing ATR support at the 28000 point level remains nominally firm with internal buying support building so watch for that level to be supported:
