Poor risk sentiment continues to dominate stock markets with Wall Street putting in its third negative session overnight on continued Fed hawkishness while tech shares fell back because of possible plant closures in China because of the protests. The USD came against the major currencies with Euro pushed back down to the 1.03 level as the Australian dollar failed to breakout above the 67 cent level and retraced sharply this morning. Bond markets sold off with 10 year Treasury yields lifting about 5 basis points to the 3.57% level while the commodity complex saw oil prices vacillate around OPEC machinations with Brent crude still hovering near its recent monthly low at the $85USD per barrel level while gold went nowhere to remain stuck at the $1749USD per ounce level.
Looking at share markets in Asia from yesterday’s session where Chinese share markets shot out of the gate and held on to their gains at the close with the Shanghai Composite finishing up more than 2% higher at 3149 points while the Hang Seng Index stonked it in, up more than 5% to get back over the 18000 point barrier! The daily chart was showing a small slowdown after having gained nearly 4000 points since testing the 2008 lows but a retracement that was slowly growing has been thwarted with a big surge back to the previous highs on rumours of COVID reopenings. By testing the recent daily lows this shows some internal strength to the bounceback so watch for a continuation from here:
Japanese stock markets were the laggards with the Nikkei 225 closing 0.5% lower at 28027 points. The inability to decisively clear overhead resistance due to the lack of a clear lead from Wall Street will continue to hamper further gains as the trading week progresses. Price action is now below the trendline and looking more and more “toppy” as daily momentum retraces from overbought where support at the 27500 point level must hold to save this uptrend:
