Too positive economic data, more hawkish Fedspeak and a Congress in Chaos impacted US stocks overnight with the USD also surging across the board. European shares fell back slightly, but Wall Street can’t find any confidence as the new year rolls on. Yen weakened against USD again while the Australian dollar was unable to hold above the 68 handle. Bond markets had a milder reaction as 10 year Treasury yields eased off slightly to the 3.72% level while the commodity complex saw oil prices consolidate from their recent losses as Brent crude steadied at the $78USD per barrel level while gold fell back slightly to the $1830USD per ounce level.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets lifted strongly going into the close with the Shanghai Composite up more than 1% to remain above the 3100 point level, closing at 3155 points while the Hang Seng Index has continued its strong bounce, up 1.2% to be just above the 21000 point level. The daily chart continues to look quite boisterous here with a series of step ups since the nadir in October last year as daily momentum switches to extreme overbought mode. It looks like weekly support at the 19000 point level is quite firm as traders bet on a post zero-COVID economic liftoff:
Japanese stock markets are trying to regain lost confidence with the Nikkei 225 eventually finishing just 0.3% higher at 25806 points. Yen has fallen back sharply in recent days which has helped arrest the steep falls here into support as this market has been in decline since mid December, rolling over through to long term support at the 26000 point level. Daily momentum is still clearly oversold so while support has held, futures are indicating more downward pressure ahead:
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