Friday night saw the latest US jobs report – aka the non farm payroll or NFP – swamp risk expectations yet again with Wall Street failing to climb out of its recent steep falls as the Federal Reserve remains hell bent on pushing interest rates sky high. The USD was largely unchanged on the print with some intrasession volatility, as the Australian dollar was again pushed below the 68 cent level on lower commodity prices. Euro was pushed down below parity again, and Yen remains at all time lows event though this isn’t helping domestic Japanese stocks. Bond markets saw some pulling back of yields with 10 year Treasuries still holding on to their two month high above the 3.1% level while interest rate futures are still forecasting a 50% chance of a 70bps rise at the next Fed meeting. Crude oil had another selloff with Brent crude down to the $92USD per barrel level while gold also fell another 1% or so, again threatening the $1700USD per ounce level.
Looking at share markets in Asia from Friday’s session, where Chinese share markets are still treading water with the Shanghai Composite holding at 3186 points while the Hang Seng Index slumped nearly 0.8% lower, closing at 19452 points as it continues to fail to get back above the 20,000 point level. The daily chart remains quite volatile with overhead resistance and daily momentum readings pushing the bearish narrative here. The moving average channel is turning over as price tests the May lows and fails to find internal buying support. Futures are indicating yet more downside:
Japanese stock markets were trying to stabilise with the Nikkei 225 closing with a scratch session at 27650 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 with futures suggesting more selloffs as the trading week begins anew:
The full text of this article is available to MacroBusiness subscribers