The BOJ shock yesterday looked set to rile up already volatile risk markets but overnight we saw stability across the complex, with Wall Street actually putting in a positive session while European shares put in scratch sessions. Currency markets were relatively sanguine across the USD pairs, while Yen remains volatile in the wake of the yield control curve changes that are effectively a rate hike. US Treasury yields and German Bunds eventually lifted higher with the 10 year issue remaining above the 3.5% level while the commodity complex saw oil prices stabilise with WTI slightly higher and Brent crude retracing back below the $80USD per barrel level as gold finally pushed through the $1800USD per ounce level, still moving higher at $1818 this morning.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets sold off sharply again with the Shanghai Composite down over 1% to cross below the 3100 point level, closing at 3073 points while the Hang Seng Index was down over 2% at one point, eventually finishing 1.3% lower at 19103 points. The daily chart is still showing the typical end to a breakout that has run out of steam with momentum and price action now retracing lower in recent sessions. Watch support which has to be strongly defended at the 17600 area as the low moving average is now coming under pressure next as overhead resistance is just too strong:
Japanese stock markets were slammed by the BOJ pivot with the Nikkei 225 closing nearly 2.5% lower to 26568 points. Futures are indicating a wobbly start today which could go anywhere so watch for a possible return to the September lows as this pre-Xmas shock is still reverberating in Japanese circles. The rollover down to short term ATR support at the 27500 point level had already converted into a proper breakdown with daily momentum now extremely oversold which could lead to some large short covering and a possible wild bounceback:
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