Markets had already priced in the latest ECB meeting rate hike, with a 75bps rise barely registering on currency and equity markets. Wall Street continued its rebound while the USD was largely unchanged against the major currency pairs as the Aussie dollar remains below the 68 cent level. On bond markets, 10 year Treasury yields went back to their three month high at the 3.3% level with the next Fed meeting expectations firming again at a 75bps rise. Crude oil saw a minor lift with Brent up 1% while copper retreated above the same while gold returned to its recent lows just above the $1700USD per ounce level.
Looking at share markets in Asia from yesterday’s session, where Chinese share markets had a mild pullback with the Shanghai Composite down 0.3% to 3235 points while the Hang Seng Index is still in sell mode, losing exactly 1% to slump below the 19,000 point level, closing at 18854 points. The daily chart remains in a very bearish mood here with daily momentum extremely oversold and price action at the lower edge of the moving average channel as price action continues to fall below the May lows. This could be a bit too over extended and may result in a sharp swing rally soon, but there’s a distinct lack of buying support here:
Japanese stock markets were the standouts however, despite the higher Yen, with the Nikkei 225 closing 2.3% higher to 28065 points. The daily chart is showing that considerable dip below the trailing ATR support level at the 28000 point area starting to be refilled as price heads back to the early August highs. Daily momentum has now inverted from extremely oversold to nominally negative settings, which is setting up nicely for a swing play here into the end of the trading week. Futures are suggesting more upside potential here as the 27000 point level turns into support:
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