Asian stock markets pulled back sharply in reaction to the hawkish Fed Chair Powell testimony overnight that sent the USD and bond yields sky high but looks like closing bull traps with only Japanese stocks not feeling the heat. The Australian dollar continues to make new monthly lows to break below the 66 cent level while oil prices remain under pressure with Brent crude barely holding on above the $83USD per barrel as gold drops a few more dollars from its walloping overnight, now down to the recent weekly lows at the $1810USD per ounce level:
Mainland Chinese share markets are again dropping going into the close with the Shanghai Composite down 0.4% to cross well below the 3300 point barrier at 3271 points while the Hang Seng has been slammed more than 2.5% lower to cross below the 20000 points level. Japanese stock markets however remain on the go, extending last week’s surge with the Nikkei 225 up 0.5% to 28461 points while the USDJPY pair has extended its own overnight gains to almost reach the 138 handle:
Australian stocks didn’t escape the selling as expected, with the ASX200 closing 0.7% lower to almost cross below the 7300 point level at 7306 points. The Australian dollar can’t catch a break of course with its big slump overnight not yet abating as it pulls back to the November lows to cross below the 66 cent level:
Eurostoxx and US futures are holding on to their respective losses from last night, with the S&P500 four hourly chart showing price action probably wanting to extend those losses below the 4000 point level as this bull trap closes. The possibility of returning to the February bottom at 3940 points is quite high:
The economic calendar includes Euro wide GDP estimates, followed by more testimony from Fed Chair Powell.