Rising bond yields soured sentiment somewhat overnight with Wall Street retreating from its big surge from Friday, as European shares continued their small advances. This should translate into a mixed session here in Asia as Australian traders position for today’s RBA meeting while others keep their eye on the ball for the Fed’s meeting later in the week. The USD remains strong against the majors with Euro now retreating below the 99 cent level, with the Australian dollar also weakening overnight. US bond markets rebounded slightly with 10 year Treasury yields pushing through to almost the 4.1% level while commodities were lower on the poor Chinese PMI, with oil prices pulling back as Brent crude hovered around the $93USD per barrel level while gold failed to consolidate its recent gains and fell back to the $1630USD per ounce level.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets were still falling but not as sharply from Friday, with the Shanghai Composite losing nearly 083% to 2893 points while the Hang Seng Index was up more than 1% at one stage before giving that back and more, closing 1% lower to 14687 points. 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 out of retreat mode with the Nikkei 225 closing more than 1.7% higher to 27587 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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