Macro Morning

Risk sentiment remains very unsteady with the IMF throwing in their two cents overnight warning of market risk ahead, while Wall Street is still churning getting ready for the next inflation print and the start of the 3Q earnings season. Wall Street was down nearly 1% across the board while European stocks had minor losses, which is likely to translate into further downside action on the ASX at the open. The USD is taking a pause against the major undollars with Euro trying to get back above the 97 handle while the Australian dollar also failing to breakout above the 63 cent level. US bond markets returned from their holidays with 10 year Treasury yields up slightly to the 3.95% level commodities saw a pullback in oil prices with Brent crude falling back to the $93USD per barrel level while gold is still under pressure as it remains welly below the $1700USD per ounce level, currently at $1666 this morning.

Looking at share markets in Asia from yesterday’s session where Chinese share markets were the exception with the Shanghai Composite putting in a scratch session, although its still just below the 3000 point barrier while the Hang Seng Index has remained in reversal mode, closing 1.5% lower to now break below the 17000 point level as its steep bear market continues. The daily futures chart shows how this dead cat bounce has returned price action to the dominant trendline, which is no surprise, with a break below the 17000 point level that will accelerate the selloff:

Japanese stock markets reopened after another long weekend with the Nikkei 225 closing more than 2.5% lower at 26401 points as it plays catchup. The daily futures chart shows similar price activity to other stock markets, with another dead cat bounce that has rejected overhead resistance at the 27500 level. Futures are indicating more downside on the continued 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: