Wall Street tried to climb out of its recent steep falls on the back of very solid manufacturing data from the latest ISM print, but this was really the USD’s night as the King of Currencies surged against everything yet again. European stocks remain in the doldrums and Asian futures are looking shaky even as the lower domestic currencies – particularly the Australian dollar which was smashed below the 68 cent level – should provide more support. Euro was pushed down below parity again, and Yen is at all time lows. Bond markets saw more increases in yields with 10 year Treasuries pushing to a two month high above the 3.1% level while interest rate futures remain solidly predicting a 65bps rise at the next Fed meeting. Crude oil had another selloff with Brent crude down nearly 4% to the $92USD per barrel level while gold also fell another 1% or so, threatening the $1700USD per ounce level.
Looking at share markets in Asia from yesterday’s session, where Chinese share markets are again treading water with the Shanghai Composite falling nearly 0.5% to close at 3184 points while the Hang Seng Index slumped nearly 1.8% lower, closing at 19597 points as it fails to get back above the 20,000 point level again. The daily chart remains quite volatile with overhead resistance and daily momentum readings pushing the bearish narrative here. The moving average channel is not providing any directional ability here as price wants to bounce off the May lows but is failing to find internal buying support. Look for a clear breakout above the 20000 point level as a point of action, but futures are indicating yet more downside:
Japanese stock markets also fell sharply, with the Nikkei 225 closing 1.5% lower at 27661 points. The daily chart is showing a considerable dip below the trailing ATR support level at the 28000 point area which had been firm since the breakout in early August. Daily momentum continues to dive into negative territory so it remains to be seen if this level can be defended in the sessions ahead although futures are suggesting some calm on the open this morning:
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