Risk sentiment looks set to return to a very positive mood as Asian stock markets re-open today, although capital flight out of China will continue to depress mainland and HK shares, which crashed again on Friday. SPI futures are indicating a 1% plus lift on the open for the ASX200 with a resurgent USD on the back of a strong PCE print dousing the Australian dollar back below the 64 cent level and putting the Pacific Peso in a precarious position before tomorrow’s RBA meeting. US bond markets rebounded slightly with 10 year Treasury yields pushing back above the 4% level as bond traders get ready for this weeks Fed meeting. Meanwhile commodities were quite mixed, with oil prices pulling back as Brent crude finished just above the $94USD per barrel level while gold failed to consolidate its recent gains and fell back to the $1640USD per ounce level.
Looking at share markets in Asia from Friday’s session where Chinese share markets retreated sharply going into the afternoon session, with the Shanghai Composite falling more than 2% to 2915 points while the Hang Seng Index slumped again, down more than 3% to 14863 points, taking back all the recent gains and making new decade lows. The daily chart shows how swift this decline has been, wiping out over a decade of returns – so far. Just below this level is the 2008 lows, so watch for the 15000 point level to become the battleground here that could dive quickly:
Japanese stock markets were in retreat mode following the BOJ meeting as Yen appreciated with the Nikkei 225 closing 0.9% lower to 27105 points. The daily price chart was showing a possible breakout brewing here under overhead resistance at the 27500 level and this may happen again with another solid start to the trading week likely from Wall Street’s lead, with futures indicating a strong push back above resistance. Momentum is also still quite positive and price hasn’t broken the low moving average either:
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