Friday night saw dead cats stinking up the place everywhere as the latest jobs report from the US (aka Non Farm Payrolls aka NFP) beat expectations, sending the USD and bond yields higher and stocks much, much lower. Both sides of the Atlantic suffered slumps to the red which will translate into more selling here in Asia as we start a new trading week. The USD pushed higher against the major undollars with Euro completely unable to get anywhere near parity beforehand anyway, while Pound Sterling reversed sharply alongside the Australian dollar which made a new low. Ten year US Treasuries lifted again, pushing back up to the 3.9% level although interest rate expectations remain firm with 150bps in rises by January. Commodities were split with oil prices still rising on the OPEC/Russia production cut agreements, with Brent crude pushing towards the $100USD per barrel level while gold fell back below the $1700USD per ounce level.
Looking at share markets in Asia from Friday’s session where Chinese share markets remained closed for National Day holidays while the Hang Seng Index went back into reversal mode, with a 1.5% retreat to finish the week below the 18000 point level. The daily futures chart had been showing a very bearish mood for weeks here, with a bear market entrenched as daily momentum remains well deep into a negative funk. While the recent bounce was interesting, it had yet to clear trailing ATR resistance and daily momentum remained negative, so no surprise it didn’t have the gusto to get out of this bear market:
Japanese stock markets did most of the heavy lifting in the previous session but on Friday the Nikkei 225 lost nearly 0.8% to close at 27116 points. The daily chart shows price action wanting to push aside that dominant downtrend but another dead cat bounce is now underway after rejecting overhead resistance at the 27500 level. Futures are indicating more downside on the Wall Street slump, so this is another market is likely to see the recent returns wiped out as daily momentum fails to confirm a swing play:
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