Wall Street followed through on its Friday night surge, lifting again in the absence of good or bad news as sentiment improved across the risk complex. The USD again fell back against the majors with Euro briefly through the 1.09 handle while the Australian dollar finally punched back above the 70 cent level. US bond markets loosened up again with 10 year Treasury yields gaining a few basis points to finish above the 3.5% 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, starting the week around the $1930USD per ounce level.
Looking at share markets in Asia from yesterday’s session where mainland and offshore Chinese share markets are closed for Lunar New Year holidays this week. Japanese stock markets are lifting higher with the Nikkei 225 closing up 1.3% to 26904 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, with firm positive correlation with Wall Street’s performance now lifting the market and swinging daily momentum higher to make ready for a breakout above short term resistance:
Australian stocks were the ones to tread water however, despite a great start to the session, as the ASX200 finished dead flat 7457 points. SPI futures are picking up again, currently up 0.4% in response to the bounce on Wall Street overnight. The daily chart had been showing price action and daily momentum in a decline since the start of December but a new breakout building here above the 7300 point level still has lots of legs. Previous overhead ATR trailing resistance at the 7200 point level is firming as short term support with resistance at the November highs now cleared:
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