Risk market volatility rebounded to the upside overnight with bounces on European shares and Wall Street in the wake of the US regional bank crisis and the latest US CPI data. The USD came back somewhat on that print which came in as expected but is still strong, with US Treasury yields rising slightly on the data with the 10 year yield almost back to the 3.6% level. Currency markets still want to be anti-USD but paused most of their advances with the Australian dollar up slightly above the mid 66 cent level while the commodity complex saw oil prices breakdown again desptie more OPEC production cuts with Brent crude finishing just above the $77USD per barrel level. Gold bugs are loving it however, keeping the shiny metal above the $1900USD per ounce level for a new monthly high.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets were down across the board with the Shanghai Composite off by nearly 0.8% to remain below the 3300 point barrier at 3245 points while the Hang Seng slumped again, down 2.3% to take back the previous gains at 19247 points. The daily chart was showing this rollover accelerating as price action retraced well below previous ATR support but could be coming back today if futures are a guide although momentum is still well deep into oversold territory. This correction won’t finish until we see at least one close above the high moving average:
Japanese stock markets remained caught up in the volatility with the Nikkei 225 down more than 2% to 27222 points. The previous bounceback looks like a bull trap, although futures are indicating a possible small bounce on the open due to the moves on Wall Street overnight. Daily momentum has crossed into oversold readings with support now coming up at the 27000 point area which had been previously defended, as the long tails of buying support despite the preponderance of red candles do indicate some deceleration:
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