Stronger than expected domestic economic data from the US put the foils to the plans of buyers to step in and pick a bottom on Wall Street, with US stocks falling sharply while the USD regained strength and bond yields leapt higher. The USD pushed back against commodity currencies with the most, with the Australian dollar falling straight back down again to the 62 cent level. US bond markets saw a lifting of 10 year Treasury yields through the 4% level while commodities also pulled back, with oil prices down to the recent lows as Brent crude broke below the $92USD per barrel level while gold remained under pressure to make a new weekly low at the $1645USD per ounce level.
Looking at share markets in Asia from Friday’s session where mainland Chinese share markets stonked it in with the Shanghai Composite up more than 1.8% at 3071 points, still holding above the 3000 point barrier while the Hang Seng Index finally got out of sell mode, moving nearly 4% higher at one stage before closing 1.2% higher at 16587 points. The daily futures chart however is still showing a deep bear market in place, with the likelihood of more downside as Wall Street wobbles on Friday night. As I said last week following the failure of the recent dead cat bounce, the subsequent break below the 17000 point level is likely to accelerate the selloff:
Japanese stock markets also moved sharply higher, with the Nikkei 225 closing up 3.3% to 27118 points. However the daily futures chart is showing a steep retracement of this move with the second bounce of the dead cat now underway after rejecting overhead resistance at the 27500 level. Futures are indicating a poor start to the trading week on the Friday selloff on Wall Street as daily momentum remains negative here with price action unlikely to climb above the high moving average:
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