Risk market volatility remains high in the wake of the Credit Suisse drama that saw European shares lose 3-4% across the board while Wall Street almost got out of it unscathed. The USD came back against Euro in particular with a strong reversal, but all the action remains in the bond market, with 10 year US Treasury yields having one of their biggest drops in years, down over 20 points to the 3.43% level. Is financial contagion spreading? The commodity complex isn’t liking the volatility with oil prices breaking down again with Brent crude finishing just above the $74USD per barrel level while gold is holding on with the shiny metal spiking again to be above the $1920USD per ounce level for a new monthly high.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets gained into the close, with the Shanghai Composite up by nearly 0.6% but still closing below the 3300 point barrier at 3263 points while the Hang Seng has lifted just over 1.3%, trying to take back the previous gains, closing at 19538 points. The daily chart was showing this rollover accelerating as price action retraced well below previous ATR support but could be reversing yet again today if futures are a guide as 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 remain caught up in the volatility but the Nikkei 225 managed to close dead flat at 27229 points. The previous bounceback still looks like a bull trap, with futures indicating more downside on the open to the financial contagion spreading. Daily momentum has crossed into deep oversold readings with support under pressure at the 27000 point area which had been previously defended:
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