Wall Street surged on Friday night, capping off a solid trading week as European shares were dragged up alongside as Fedspeak moved confidence higher. Risk markets continue to price in the Fed taking the foot of the interest rate throttle, as inflation worries abate. The USD pulled back against some of the majors, with Euro remaining above the 1.08 level while the Australian dollar clawed its way back above the 69 cent level. US bond markets loosening up a tiny bit with 10 year Treasury yields gaining a few basis points to finish above the 3.4% level while the commodity complex saw oil prices move higher as Brent crude almost lifted through the $88USD per barrel level. Gold moderated after a solid previous session, finishing the week strongly above the $1925USD per ounce level.
Looking at share markets in Asia from Friday’s session where mainland Chinese share markets lifted strongly going into the close with the Shanghai Composite finishing 0.7% higher to remain above the 3200 point level at 3264 points while the Hang Seng Index is doing even better, closing nearly 2% higher to cross back above the 22000 point barrier. The daily chart was looking over extended but had a minor mid week slowdown before this end of week surge, with a series of step ups since the nadir in October last year not yet easing off. Daily momentum is getting back to overbought settings after a mild retracement, with this breakout spelling more likely upside from here:
Japanese stock markets were treading water before a late surge saw the Nikkei 225 closing 0.5% higher at 26553 points. The potential for a bottom to develop here at the 25000 point level is now quite firm after a lot of oscillation around the BOJ and bond market problems, but it seems correlation with Wall Street’s performance is overshadowing with daily momentum swinging higher and now quite positive ready to make a breakout:
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