Last night’s US CPI print certainly shook up risk markets, with a bear trap at the opening of Wall Street getting the short sellers all excited before a flurry of bidding sent stocks and currencies higher, despite a “too hot” 8% plus inflation print. European shares were able to find some stability as well, with the net result that Asian futures are looking at a better finish to the trading week today. The USD faltered against most of the majors, with Pound Sterling having the best day out since the Truss Budget bollocksing, Euro stabilising while the Australian dollar failed again to breakout above the 63 cent level. US bond markets saw a pullback with 10 year Treasury yields back up to the 3.95% level while commodities spiked initially before stabilising as well, with oil prices lifting slightly as Brent crude got back to the $95USD per barrel level while gold remained under pressure and under the $1700USD per ounce level.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets were trying to put in scratch sessions but the Shanghai Composite eventually closed 0.3% lower at 3016 points, just holding above the 3000 point barrier while the Hang Seng Index remained in sell mode, down 1.8% in another sharp retracement to close at 16389 points. The daily futures chart shows how the start of week dead cat bounce was just a blip in the dominant trendline, with this break below the 17000 point level likely to accelerate the selloff:
Japanese stock markets also moved lower, with the Nikkei 225 closing down 0.4% to 26283 points. 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 a better start today on the Wall Street bounce, but momentum remains negative here with price action unlikely to climb above the high moving average:
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