Last night risk markets hinged on the latest US inflation print, which came in as expected sending the USD lower but all the action was in bond markets which reacted harshly, sending 10 year Treasury yields sharply lower. Tonight’s NFP aka US unemployment print may put a further cat among the pigeons, with Wall Street unable to translate the previous stonking session into anything meaningful as traders await this very important release. The latest ISM manufacturing print was was slightly off but it shouldn’t have been enough to dampen risk taking this much. Is something afoot? Pound Sterling made a new six month high, dragging Euro to the 1.05 level for its own monthly high while the Australian dollar continued its breakout above the 68 cent level but stabilised this morning. The commodity complex saw oil prices continue to vacillate but eventuall Brent crude stabilised around the $87USD per barrel level while gold followed the undollars higher to zoom up to through the $1800USD per ounce level.
Looking at share markets in Asia from yesterday’s session where Chinese share markets gapped at the open and stayed there with the Shanghai Composite up more than 0.4% to the 3165 point level while the Hang Seng Index is still moving higher, finishing up 0.7% to 18736 points. The daily chart is showing a perfect breakout here with a big surge up towards the 19000 point the next stage to watch although futures are indicating a mild pullback as support is defended at the 17600 area:
Japanese stock markets finally played catchup with the Nikkei 225 closing 0.9% higher at 28226 points. Again the lack of a clear lead from Wall Street overnight is hampering a bullish finish to the week, with the NFP print not helping risk expectations either. The daily chart shows a pullback to the 28000 point area for the final trading session, with price action still not quite back above the trendline and again looking “toppy” here. Daily momentum remains positive but not yet overbought. Support at the 27500 point level has held so far:
