Macro Morning

The relief rally on Wall Street finished before it even started with a rout on Friday night almost sending US stocks back to their previous weekly lows, which will be a negative dampener on sentiment as Asian markets reopen this morning. In currency land, the USD continued to give back its recent gains with Euro and Pound Sterling firming back near their highs while the Australian dollar almost climbed back above the 68 cent level. US Treasury yields lifted slightly, arresting their weekly decline with the 10 year yield almost pushed back to the 3.6% level while the commodity complex saw oil prices pullback sharply again, with Brent crude below the $77USD per barrel level while gold is also clawing back its recent losses but is still shy of the $1800USD per ounce level.

Looking at share markets in Asia from Friday’s session where Chinese share markets meandered around post the inflation print but eventually finished in positive territory with the Shanghai Composite lifting 0.3% to close the week above the 3200 point level while the Hang Seng Index has lifted again following the news that the HK government may ease COVID restrictions, gaining more than 2.3% to 19900 points. The daily chart was showing a perfect breakout here with a big surge up towards the 19000 point level, with more potential upside here to start the new trading week on a positive note, ex external factors, with support still strongly defended at the 17600 area and daily momentum remaining nicely overbought:

Japanese stock markets played catchup finally, with the Nikkei 225 finishing more than 1% higher at 27901 points. The lack of a clear lead from Wall Street combined with heavy resistance at the 28400 point level had turned this pause into a rollover into short term support but the late week rally saw price bounce off that level but not yet above its own high moving average. The daily chart shows this pullback is possibly finished here if ATR support can be defended at the 27500 point level as we start the new trading week: