A very solid move higher on Wall Street is likely going to translate into some better gains for Asian stock markets following the recent BOJ pivot shock as thin trading volumes into the end of year session are still pushing volatility up and down. Currency markets were relatively sanguine across the USD pairs, with Euro holding the line while Pound Sterling fell back as Yen tries to stabilise after its mammoth moves earlier in the week. US Treasury yields lifted again with the 10 year issue pushing above the 3.6% level while the commodity complex saw oil prices stabilise and gain across the board with Brent crude lifting back above the $82USD per barrel level as gold remained stubbornly above the $1800USD per ounce level.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets are holding slightly lower as we head into the close with the Shanghai Composite down nearly 0.3% to remain below the 3100 point level, closing at 3068 points while the Hang Seng Index is edged slightly higher at the 19160 point level. 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 however are still selling off in the post BOJ pivot phase with the Nikkei 225 closing 0.7% lower to 26387 points. Futures are indicating a moderate 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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