Macro Morning

Not many direct market catalysts to push risk down on Friday night, with some hawkish Fed comments not able to subside the rebound on Wall Street, with a strong finish on European stock markets too as the Ukrainian counter-offensive gathers pace. The USD was the largest casaulty, with the USD Index down over 0.6% with Euro surging above parity while the Australian dollar also returned back above the 68 cent level. On bond markets, 10 year Treasury yields lifted further above the 3.3% level with the next Fed meeting expectations firming again, now up to 80% chance of a 75bps rise. Crude oil lifted out of its depressed state with Brent up nearly 4% while iron ore gained more than 3% as gold can’t get out of its funk, remaining stuck just above the $1700USD per ounce level.

Looking at share markets in Asia from Friday’s session, where Chinese share markets had a late surge with the Shanghai Composite closing up 0.8% higher at 3262 points while the Hang Seng Index finally moved out of sell mode, closing 2.6% higher to bounce back above the 19,000 point level, closing at 19362 points.  The daily chart was looking over bearish before the Friday session, with daily momentum extremely oversold and price action at the lower edge of the moving average channel. As I warned this looked over extended and may result in a sharp swing rally soon, but there’s a distinct lack of buying support here to follow through so watch the high moving average for signs of a proper breakout:

Japanese stock markets also added to their previous gains, with the Nikkei 225 closing 0.5% higher at 28214 points. The daily chart is showing a return back above previous trailing ATR support level at the 28000 point area 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 that should extend into to the start of the new trading week. Futures are suggesting more upside potential here: