Macro Morning

Wall Street closed at a two year high overnight, with the S&P500 Index finally breaking through the 4000 point barrier on a reversal in risk sentiment. Meanwhile in currency land, the USD was unable to continue its recent lift higher against the major currencies with Euro pushed back above the 1.03 level as the Australian dollar recovered slightly above the 66 cent level. The action was in US bond markets with more yield inversion as 10 year Treasury yields heading back down to the 3.7% level, with softer signalling on the December FOMC meeting. The commodity complex saw some stability return to oil prices but still looking weak as Brent recovered to the $88USD per barrel level while gold was unable to drift higher alongside other undollars, still hovering around the the $1740USD per ounce level.

Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets struggled to hold on to early gains with the Shanghai Composite closing just 0.1% higher at 3088 points while the Hang Seng Index lost further ground, closing down 1.3% to 17424 points. The daily chart is showing a significant slowdown after having gained nearly 4000 points since testing the 2008 lows with the possibility of a further retracement growing. Its pretty obvious that daily momentum was getting ahead of itself before reaching the magical 20000 point level so watch this retracement to continue to test the recent daily lows below the 18000 point level:

Japanese stock markets are heading higher as Yen goes lower with the Nikkei 225 closing up 0.6% to 28115 points. The daily price chart was showing a breakout brewing as overhead resistance at the 27500 level is cleared but with some wobbles appearing here as the stronger Yen kept risk sentiment in check before this breakout. More upside action on Wall Street will help buying confidence from here as price bounces off the trendline as daily momentum remains overbought. Support has held nicely at the 27500 point level to continue this uptrend: