Macro Morning

Friday night saw the risk complex take a big U-turn as murmurings that the US Federal Reserve may slow down or pause its rate hikes set Wall Street sharply higher and the USD sharply down against almost everything. European shares remain under pressure with their own inflationary woes however the FTSE surged on the resignation of the UK PM Truss. King Dollar was kicked off its throne with a massive reversal in Yen while the Australian dollar surged higher to make a new weekly high. US bond markets were relatively sanguine with 10 year Treasury yields still staying above the 4.2% level at a 14 year high. Meanwhile commodities remain mixed, with oil prices steady as Brent crude finished at the $93USD per barrel level while gold zoomed more than $40USD higher to finish the week where it started, filling in the mid week slump at the $1659USD per ounce level.

Looking at share markets in Asia from Friday’s session where Chinese share markets were building stronger going into the close but the Shanghai Composite eventually only finished 0.1% higher at 3038 points, while the Hang Seng Index continued to fall, down 0.4% to 16211 points. The daily futures chart continues to show a deep bear market in place, with price deceleration no longer evident around the 16500 point mid level. 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 with a new low settling the case:

Japanese stock markets also fell back with the Nikkei 225 closing 0.4% lower at 26890 points. Last week, the daily price chart was showing a possible breakout brewing here under overhead resistance at the 27500 level in this second bounce of the dead cat but that was thwarted mid-week. Is this setting up again with the big bounce on Wall Street? Resistance overhead needs to be cleared with futures indicating a very solid start to the trading week as momentum pushes through the positive zone: