Asian stocks have extended their gains or in the case of Chinese markets, covered short positions following yesterday’s direct intervention by authorities. Meanwhile bond and FX traders await this week’s ECB meeting with the USD continuing its pullback against the major currencies with both Euro and Pound Sterling are holding on to their gains, while the Australian dollar absorbed the latest CPI print to get back above the 64 handle. Oil prices are dead flat with Brent crude steady just above the $92USD per barrel level while gold is trying to hold on to its on Friday night gains, still back at the last week high around the $1656USD per ounce level:
Mainland Chinese share markets have launched higher after the previous stable session, with the Shanghai Composite well above the 3000 point barrier with a 1% lift while the Hang Seng Index is moving even faster into the close, currently up 2% to 15486 points. Japanese stock markets are continuing their strong start to the trading week with the Nikkei 225 closing another 1% higher to 27526 points, while the USDJPY pair is trying to stabilise after its pullback overnight, peeking just above the 148 level:
Australian stocks lagged again due to the too hot CPI print, but managed a scratch session with the ASX200 closing just on 0.2% higher, creeping through the 6800 point level to close at 6810 points. The Australian dollar however absorbed the inflation data without fuss, putting a series of higher four hourly sessions, pushing above the 64 handle:
Eurostoxx and US futures are drifting slightly lower as we head into the London session, despite the positive mood here in Asia, with the S&P500 four hourly futures chart showing price action pausing again at the 3800 area after the big surge on Friday night, still hovering at monthly resistance (upper black horizontal line). Medium term and possibly psychological long term resistance at the 4000 point level is a distant memory, but this does set up another attempt as short term momentum remains overbought:
The economic calendar continues with US building permits and new home sales data.