Macro Morning

Bad economic news equals lesser chance of steeper rate rises from Fed sent good vibes throughout US stock markets overnight as the next quarter gets underway. With Wall Street rallying some 2%, Asian stocks are likely to follow, although today’s interest rate rise by the RBA might put a damper on local stock markets, although the Australian dollar is surging yet again. In fact, USD is pulling back against the majors, with Pound Sterling reversing as Truss’s nonsensical income tax cuts are also reversed following last week’s bailout of the gilt market by the BOE. 10 year US Treasuries pushed sharply lower, now at the 3.6% level although interest rate expectations remains firm with 150bps in rises by January. Commodities were fairly solid with oil markets bouncing back, as Brent crude pushed above the $88USD per barrel level while gold also bounced off its recent monthly low to finish at a new weekly high, almost crossing the $1700USD per ounce level.

Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets were closed – and will remain closed for the rest of the week for National holidays – while Hong Kong’s Hang Seng Index can’t get a break, down another 0.8% to 17079 points. The daily futures chart is still showing a very bearish mood with a bear market continuing as daily momentum remains well deep into negative funk, but initial signs of selling exhaustion are not translating into a deceleration at all:

Japanese stock markets however recovered somewhat, with the Nikkei 225 closing more than 1% higher at 26215 points. The daily chart shows price action still on a dominant downtrend after the recent dead cat bounce up to the 28000 point level with support at the 27000 point level a distant memory. However, futures are indicating a big bullish engulfing candle with daily momentum oversold but ready to setup a big swing play here, with the high moving average at the 26700 point level the target to beat today: