The SVB bank collapse has overshadowed Friday night’s February US jobs report with machinations by the Fed and other officials this weekend likely to prove a volatile start to this trading week. Wall Street fell sharply on the news and possible contagion into the financial sector while the actual NFP was pretty good, interest rate expectations have dropped, sending USD down against most of the majors. Bond markets saw big drops in yields with 2 year Treasuries making their biggest drop since 2008 while 10 year yields fell back to the 3.7% level after almost breaking through the 4% level last week. Meanwhile the commodity complex saw oil prices stabilise on the lower USD as Brent crude lifted back through the $82USD per barrel level while gold soared higher on safe haven buying, up through the $1860 USD per ounce level for a new high.
Looking at share markets in Asia from Friday’s session where mainland Chinese share markets sold off from the get go and fell sharply into the close with the Shanghai Composite off by more than 1.4% to extend below the 3300 point barrier at 323 points while the Hang Seng lost significant ground, down exactly 3% to 19319 points. The daily chart is showing this rollover accelerating as price action retraces well below previous ATR support and momentum returning to oversold territory to the recent weekly lows. This could get ugly:
Japanese stock markets were finally playing catch up to the risk off mood with the Nikkei 225 taking back most of the week’s gains to close 1.7% lower at 28143 points. The previous bounceback looks like a bull trap, with futures indicating further losses on the open following Wall Street from Friday night. Daily momentum has crossed well below the overbought zone with support now coming up at the 27000 point area which had been preivously defended, but watch the low moving average for any crossover action:
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