US stocks surged on Friday on the back of mixed job figures in the latest non-farm payroll (NFP) and the break of the COVID zero policy in China, as traders discounted the recent Fed rate rise. The USD gave up a lot of ground against the major currency pairs with Euro bouncing up through to the 99 level, with the Australian dollar almost returned to its recent high at the 65 cent level. US bond markets saw more curve flattening with 10 year Treasury yields remaining above the 4.15% level while commodities were solid on the lower USD with Brent crude almost back to the $98USD per barrel level while gold zoomed higher to almost finish at the $1700USD per ounce level.
Looking at share markets in Asia from Friday’s session where mainland Chinese share markets leapt out of the gate and kept on leaping into the close with the Shanghai Composite finishing more than 2.3% higher at 3070 points. Meanwhile the Hang Seng Index has surged again, up more than 5% to finally get out of its selling funk, pushing up through the 16000 point level to close at 16161 points. The daily chart was showing a potential bottoming action last week although I was wary if it was a sustainable action or just short covering. Just below this level is the 2008 lows, as the 15000 point level was the key area to watch for signs of crumbling support, but here is a bullish engulfing candle that has almost cleared overhead trailing ATR resistance so we could be seeing a continuation of a melt up rally as the new trading week gets underway:
Japanese stock markets were the odd ones out, with the Nikkei 225 pulling back sharply to close 1.6% lower at 27199 points. The daily price chart was showing a possible breakout brewing here under overhead resistance at the 27500 level however the prior mixed lead from Wall Street and lack of internal confidence kept things at bay. Futures are indicating a better start to the trading week, with momentum still quite positive if not overbought levels but watch price action that seems stuck below resistance at the 27600 point level:
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